[LightsChromeHorsepower]

I would suggest obtaining the following professional counsel;

1. A good accountant who can help you properly analyze your financial position.

2. An attorney who can provide the assistance needed for a bankruptcy IF that turns out to be what you need to do.

3. A credit counsellor who can help negotiate with the people you owe money to, if the lawyer cannot do so.

4. A real estate agent who can give you an idea of where you stand with your home's value versus what you owe on it and what your options are.

My best advice is to be proactive. You might be able to help yourself a bunch by negotiating with your mortgage lender to allow you make a short sale on the house. I think most creditors would rather work out some sort of arrangement, you may just have to pester them a bit.

I wish you the best. It's a really tough time that we are all in right now, lot's of people are in your shoes and lots more will be before it ends.

[tracer]

Originally Posted by Tatertot

Maybe someone here has been through this. Worth asking I suppose.

Bankruptsy is not worth it. You'll be blacklisted for 7 or 10 years, depending on your state/province. It's much better to use a lawyer to negotiate some kind of deal with this people where they agree not to hassle you if you pay the agreed amount on time. Eg: you take 20% of your income and divide it between all the companies you're indebted to (in proportion). And naturally you stop borrowing and live on cash...

If you do decide to go with bankruptsy, one way to reestablish credit is to get a secured credit card like a MasterCard from Capital One. You give them 500 or 1000 dollars and your credit line is equal to the amount of the deposit. If you pay on time, in 1-2 years your credit score will improve to the point where you'll be able to get a real non-secured card.

I wrote a electronic booklet about how to improve your credit. It was intended for Canadians and but I think it'll be of use to U.S. residents as well. If you wish, I can send you a free copy, as one trucker to another. I wrote it based on my own experience.

[Tatertot]

I'll elaborate more on why I'm considering bankruptcy.

Was a company driver for 5 years, bought my own truck in 2000. Built up a good size buffer rather quickly, around $40,000 in 4 months. Saved up a bit more, bought a house for my family in 2001.

Fast forward to 2006. I'm starting to get water in my oil shortly after each oil delivery, and the oil company has to come out and prime the system with each delivery. Underground oil tank, anyone who has/had one can relate. We got a test for it before I bought the house, was fine. I decide to have it taken out, and get an above ground tank. Well, they discover the tank had some small holes in it, water was getting in, and oil leaked into the ground. About a $25,000 cost to dig, clean up, refill with dirt, EPA considerations, etc. Company that did initial tank testing was out of business for a few years at that point.

Wife went to the hospital over 1 weekend with chest pains. They kept her 3 days, did a cardiocath, found nothing, but billed me $40k. Was on OOIDA's insurance at the time for $400/mo, and they told me it had to be pre-existing(??) and refused to pay.

Around this time, or shortly before, fuel is fluctuating between $2.50-$3 per gallon. Re-fi'd the house a couple of times to help out. Credit cards were getting maxed out over time. Not from extravagant living, just trying to keep up. We live pretty simple lives, don't spend much. Price of everything associated with the job has increased. Labor rates went from $60 to $100 an hour over here, fuel prices are up 3-fold, and freight was really slow this winter. I could go on and on, but you get the picture. I did what I could to stay afloat to this point.

All said and done, I have about $60k in credit card debt(all have charged off now), $225k mortgage, $5k in miscellaneous debts, and about $35-40k due in taxes coming up which I won't be able to pay.

Appreciate the advice here very much. Will talk to the lawyer next week and see what he says. I know he'll want $1500-2000 to file, but not much I can do about that. Credit is already toast, it'll take me many years to repay everything even if they fore go interest.

I might just take you up on that offer tracer, let me see how this goes first, thx.

[no_worries]

I doubt you need to resort to BK. The credit cards can be worked with, especially if they're already in a charge-off situation. Given the current climate, I imagine they'll be happy to get anything they can from you. Unless there's a huge discrepancy between the value of your house and the mortgage balance, you'll be out from under the bulk of that when you're out of the house, however that may occur. I assume that tax bill includes significant back taxes? You would have had to earn a good amount to incur that amount of tax in one year. Regardless, the IRS is easy to work with setting up a plan and even making an offer-in-compromise. Talk to the pros, but I doubt they'll recommend BK based on those numbers. Unless it's a bankruptcy attorney...you might want to start with a CPA.

[Darin Younce]

Tatertot. If I were you I would contact the different places you owe and try to work out a plan. I was raised in the finance business and worked over 20 years in the business. We delt with bankruptcy quite a bit. We would take just about anything as payment to keep a customer from filing . Most of the time the customers paid as they promised and would later thank us for talking them out of filing. I have not kept up with the current credit reporting but the 10 year record sounds about right on paper, but let me tell you, you still have a record even beyond 10 years , believe me ,credit companies will know , plus the actual companies you filed on will always have your record and can hold off for a long time before thay actually report it . Anyway try to work it out with each company and you might just find that it is actually cheaper to do so .

[Twilight Flyer]

you still have a record even beyond 10 years , believe me ,credit companies will know

Actually, there are laws against that. Anything over 10 years cannot legally show up on a credit report and must be removed if it does. Companies can be, and many times have been, successfully sued for messing with someone's credit rating illegally.

Now, if you're talking about zombie debt, that's a different thing. What happens with these companies that charge off your debts, they sell your debt to collection agencies.

For example, let's say you charged $1500 with a furniture company in 1986 and through whatever means, it did not get paid off. Legally, that debt must come off your credit report by 1996, but the company will probably go sell your debt to a collection agency for maybe $50. The agency then can then attempt to collect and they make a lot of money doing it with people that don't know their rights.

Additionally, because they have your information, they will usually monitor your credit. So, 20 years later let's say you take out a loan to get a car. The collection agency sees new action on your credit report and think, "hey, he's got money, let's hit him up for $4000 or so, to cover 20 years interest."

Bottom line, it's a scam and happens quite frequently. Regardless of what the agency says, they cannot ding your credit rating. It's considered harrassment and phone calls from them fall under the No Call List rules. So it's a double whammy to them and most judges will gleefully plaster these assholes with huge fines if someone pursues them for their illegal tactics.

[Darin Younce]

Ok, let me clarify this. The major credit reporting agencies are held to a min of 10 years reporting of your bankruptcy, some go 7 years . What I am talking about is the indivual campanies will still have a record . They can keep that record for ever and ever . Lets say Joe smith went to ABC loan company in 1995 and borrowed $500.00 , shortly after he files bankruptcy, flash foward 2008, he goes back to ABC loan co to get some cash , they pull up ( their ) own record and see his bankruptcy which was some 13 years ago . They are not going to turn him down based on his bankruptcy but they will find another way to turn him down. This scenario is probably rare but still it happens , also this info is passed thru the grapevine among local finance companies which report directly to each other rather than use a credit reporting agency . I was in the finance business from 08/15/1979 to 11/30/2003 , with a small gap in there in the early 90,s . My Dad was senior vice president of Security Finance Corp up until 1996 ,in which he left them and formed his own company Delta Mgmt . In 1999 he sold out . He had 82 branches thru out
SC, TN, TX. Anyway I say all of this just to let you know I have some experience in the real world of Finance.

[Bigmon]

Originally Posted by Darin Younce

Ok, let me clarify this. The major credit reporting agencies are held to a min of 10 years reporting of your bankruptcy, some go 7 years . .

It's a maximum of 10 years for BK and maximum of 7 years for bad credit. However, lots of times they come off sooner. Especially, if you know how to dispute credit reports. BTW, some people in Congress are thinking of making it shorter.

With banks and loan companies merging, old records often end up in storage somewhere. With all the forclosures having a BK is not as bad as it used to be. Over 40 Congressman have filed BK.

[GMAN]

It is my understanding that a straight bankruptcy (chapter 7) stays on your credit for 10 years. A chapter 13 or similar work out plan that you pay a portion or all of your debt over a time period stays on your credit for 7 years. Your best bet is to contact a lawyer and ask him.