Before May of 2009 I NEVER had anything late, no credit cards, no car payment no utilities late! But on May 2, 2009 my son was a passenger in a horrible car accident where I had to stay in the hospital with my son for over 53 days and EVERYTHING fell behind in July, 2009 since then, it seems like I CAN’T catch anything up and now I have 60 days behind on my car twice. And we have over $300,000.00 in medical debt that I CANNOT pay. I was layed off my job from August, 2009 until September of 2010, and was paying COBRA health insurance for my son until August of this year, when I moved to another state to get a job. I have a bankruptcy chapter 7 on me from 2004.
My question is can I even file bankruptcy, and if I can which one would it be chapter 7 or 13 since my discharge was 2005? And I am filing for divorce shortly and my income is going to considerably drob even more then. I am just at a loss. We have NO health insurance, we have NO savings, we went through all of that. I just don’t know what to do…. And I cashed out my 401K to put down some money on a home to purchase in a land contract that I have to buy myself in 7 years so I need cleaned up credit by then…. HELP?????!!!!!!!!
Chris
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Steve
Hi chris – first of all, I want to say that I am very sorry to hear about your son’s injury in an auto accident that obviously left you and your family shattered and in horrible debt. the key here is the fact that sometime in early 2005, your debts were dishcharged in a chapter 7 bankruptcy and whether it was your fault or not, you have amassed new debt. You are not alone in this – many people have this same problem, including myself. the real problem here, is that you are no longer under the protection of the bankruptcy court because you cannot file again for almost 2 years from now. You can, however, look into filing a chapter 13 bankruptcy, but you may not be allowed to do it. not that legally you cannot do it, because you can, but chapter 13 is a repayment plan. in chapter 13 debt is usually reduced to 20% of what you owe and all interest is taken away and you must pay it back for 3 or 5 years. HOWEVER, in order to be approved for a chapter 13 bankruptcy, you have to have sufficiant income to not only live, but to cover repayment of your debt for up to 5 years. Your debt is quite huge, and being that I do not know what your level of income is, you would deifnately have to do what Steve always reccomends: you must sit down face to face with a bankruptcy attorney (or two or three) to find out what exactly you can do, short of going to a museum and asking them if they have any spare roman armor suits with shields, because you might have to fight creditors off for a long time to come. I fyou don’t have sufficiant income to satisfy paying back that huge debt and to live at the same time, your chapter 13 will be denied. You must also understand that is is VERY expensive to hire a lwayer for a chapter 13 and, as you already know, anything can happen in that five year period of being on a tight budget – a car accident, the roof caving in, the furnace/airconditioning breaking – anything. If you don’t have sufficiant income to file a chapter 13 then you are unfortunatley going to be in for a very long and bumpy ride for the next couple of years until you can once again legally file a chapter 7. Your hospital debt will no doubt eventually be written off by the hospital and sold to a collection agency which will most likely be a law firm and you can best believe that they will hound you for it and eventually sue. not to mention other creditors that will sue and will obtain judgements against you. you might not at this point have any other options but to accept what will happen to you and then wait out the two years, re-file for chapter 7 and have all judgements and possibly garnishments reversed. if you do follow this advice and seek the advice of a bankruptcy attorney, you must ask not only what can be the consequenses of getting sued in your particular state, but also what legal measures you can take now, before you get sued to hide or transfer assets. You can best be assured that if creditors do get a judgement against you, they will seize and freeze your bank accounts. But the very first step you must take with this tremendous amount of debet, which is not going to go away, is you must seek the advice of a good attorney about what you can and can’t legally do and what you can expect to happen and if you indeed can file a chapter 13 or not. As Steve would say, i wish you the best of luck in this coming 2 years and hopefully you can find a solution to get through this very horrible time in your life.
Hi chris – first of all, I want to say that I am very sorry to hear about your son’s injury in an auto accident that obviously left you and your family shattered and in horrible debt. the key here is the fact that sometime in early 2005, your debts were dishcharged in a chapter 7 bankruptcy and whether it was your fault or not, you have amassed new debt. You are not alone in this – many people have this same problem, including myself. the real problem here, is that you are no longer under the protection of the bankruptcy court because you cannot file again for almost 2 years from now. You can, however, look into filing a chapter 13 bankruptcy, but you may not be allowed to do it. not that legally you cannot do it, because you can, but chapter 13 is a repayment plan. in chapter 13 debt is usually reduced to 20% of what you owe and all interest is taken away and you must pay it back for 3 or 5 years. HOWEVER, in order to be approved for a chapter 13 bankruptcy, you have to have sufficiant income to not only live, but to cover repayment of your debt for up to 5 years. Your debt is quite huge, and being that I do not know what your level of income is, you would deifnately have to do what Steve always reccomends: you must sit down face to face with a bankruptcy attorney (or two or three) to find out what exactly you can do, short of going to a museum and asking them if they have any spare roman armor suits with shields, because you might have to fight creditors off for a long time to come. I fyou don’t have sufficiant income to satisfy paying back that huge debt and to live at the same time, your chapter 13 will be denied. You must also understand that is is VERY expensive to hire a lwayer for a chapter 13 and, as you already know, anything can happen in that five year period of being on a tight budget – a car accident, the roof caving in, the furnace/airconditioning breaking – anything. If you don’t have sufficiant income to file a chapter 13 then you are unfortunatley going to be in for a very long and bumpy ride for the next couple of years until you can once again legally file a chapter 7. Your hospital debt will no doubt eventually be written off by the hospital and sold to a collection agency which will most likely be a law firm and you can best believe that they will hound you for it and eventually sue. not to mention other creditors that will sue and will obtain judgements against you. you might not at this point have any other options but to accept what will happen to you and then wait out the two years, re-file for chapter 7 and have all judgements and possibly garnishments reversed. if you do follow this advice and seek the advice of a bankruptcy attorney, you must ask not only what can be the consequenses of getting sued in your particular state, but also what legal measures you can take now, before you get sued to hide or transfer assets. You can best be assured that if creditors do get a judgement against you, they will seize and freeze your bank accounts. But the very first step you must take with this tremendous amount of debet, which is not going to go away, is you must seek the advice of a good attorney about what you can and can’t legally do and what you can expect to happen and if you indeed can file a chapter 13 or not. As Steve would say, i wish you the best of luck in this coming 2 years and hopefully you can find a solution to get through this very horrible time in your life.
Chris,
I am sorry for what you have had to go through as a parent, I cannot even imagine that type of struggle.
As to a bankruptcy, you can file a chapter 7 only every 8 years – from filing date of the old case to filing date of a new case. So it appears you will be eligible sometime in 2012.
But if you need bankruptcy protection now, you can file a chapter 13 and propose a low monthly payment. Then when 8 years has passed from the old chapter 7 case, you dismiss your chapter 13 case and file a new chapter 7.
It is important that you don’t try to convert your 13 to 7, this will not work. You need to file a new chapter 7 case in 2012.
I hope this helps.
Chris,
I am sorry for what you have had to go through as a parent, I cannot even imagine that type of struggle.
As to a bankruptcy, you can file a chapter 7 only every 8 years – from filing date of the old case to filing date of a new case. So it appears you will be eligible sometime in 2012.
But if you need bankruptcy protection now, you can file a chapter 13 and propose a low monthly payment. Then when 8 years has passed from the old chapter 7 case, you dismiss your chapter 13 case and file a new chapter 7.
It is important that you don’t try to convert your 13 to 7, this will not work. You need to file a new chapter 7 case in 2012.
I hope this helps.