I currently owe 35k on a Bank of America Credit Card and 20 on an American Express account. These cards and balances were the result of me using the cards to run a branch location i had for a mortgage company and then the company would pay me off. Unfortunately, the company in Sept of 2009 filed Chapter 7 Bankruptcy and today I have to still pay on this debt and I was never reimbursed. Also, unfortunate is the fact I am the only one on the cards. So for 2 yrs almost I have paid a ton of money, I previously owed 51k and 25k on these cards and today the balances are what I stated above. So I have paid a ton, my job today just pays much less and I am not able to keep it up at the payments they need and these balances are just not going away.
Based on the information above, what are my options and what should I do? Do I file Bankruptcy and just ruin my credit for good? How do I approach them if not? My issue is if I file bankruptcy in todays market, I will not be able to most likely get a job in the financial industry again. That is what I have done for 17 yrs. Please help?
I am assuming you were listed as an unsecured creditor in the company bankruptcy.
The problem is that even if you incur debt on behalf of another, if you do it in your name, it is your personal debt.
If you approach these creditors, which you certainly can do, they may offer you a settlement. That settlement will result in bad credit that will be reported on your credit report for 7.5 years from the date first delinquent. It may also result in a large tax liability of the forgiven debt leaves you solvent. You would have to pay the IRS income tax on the forgiven debt. If you fail to meet the settlement payments you should prepare to be sued, especially by American Express.
So you’d have to weigh those consequences against the benefits of bankruptcy. Most people are eligible to file Chapter 7 bankruptcy and discharge all of their debt in months for about $1,500. Bankruptcy leaves you with no tax liability and you can’t be sued over the debt.
You made a couple of statements which seemed assumptions. First, you said that bankruptcy would ruin your credit for good. That’s just not true. It is relatively easy to rehabilitate credit following bankruptcy and while it is true that process might take a couple of years, the credit can be rebuilt. Second, you said that bankruptcy would prevent you from a job in the financial industry. That’s not accurate either. There are actually few positions that are prevented solely based on bankruptcy.
For example, to become a Certified Financial Planner the board says “A single personal bankruptcy (non-business) should have no bearing on consideration for Certification, as there are far too many diverse sets of circumstances that can cause this to occur which have no relationship to the professional conduct or capability of the applicant.” – Source. The Nationwide Mortgage Licensing System makes no mention of an application being banned from obtaining a mortgage license because of a past bankruptcy.
I think before you make assumptions that can drastically alter your life you need to investigate those assumptions further. The best step would be to click here to find a local bankruptcy lawyer and go talk to them to get the facts.
While you might not want to consider bankruptcy you need to play the cards you were dealt. The mortgage company that employed you managed to convince you to put loads of company debt on your personal credit cards and went out of business. It is now your responsibility to deal with it. Bottom line, you need to deal with this situation right now before you pay one more penny towards this debt. If you decide to go the debt settlement route or bankruptcy path all of the money you have paid up till this date will have been wasted and not help minimize the resulting impact of either option. I wish you found me a year ago.
Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.