NYC filing for bankruptcy. What would happen to me.
Credit Card Debt: $123,000.
Minimum monthly payment about $2,800
Annual Salary: $90,000 (8% pretax goes to 401K)
After tax, 401K, and medical, I get about $4,200 a month.
Major Monthly Expanses:
Rent: $960
Parking Garage: $300
Personal Asset:
Car: 1990 Nissan Maxima (worth $3,000?)
Home appliance and computer equipment about $3,000
Mutual fund about $3000
Also have a home based propietoryship company doing Internet Programming:
Monthly Income: $1950
Monthly Expenses: $1500
Other personal loans from friends about $10,000.
I have the credit card debt for years and the amount keep increasing. I'm
having a very tough time to keep up with my monthly payment. I just got to a
point that I don't care about my credit and I don't think I'll ever get a
loan or a house, so I'm not worry about my credit will be bad forever. I'm
strongly considering filing a bankruptcy and get a fresh start. I'm thinking
of selling my car and my propietoryship business to first pay-off some of my
personal loan from friends but I still have a big debt on credit cards.
What are my options? What would I end up with?
- I think you should pay off your debts rather than paying into
your retirement @ 7200/year.
If you don't pay into your 401k and count the 450 per month from your
home business, you're taking home about 5100/month.
You may wish to consider talking with the non-profit Consumer Credit
Counseling, which can often reduce your monthly payments, and possibly
even negotiate a waiver of continuing interest.
Start paying off the highest-interest debt as soon as possible with extra
payments, and work your way on down. Resolve to live on a CASH basis and not
incur further charges. Bankruptcy won't help you if the underlying reason
that got you into bankruptcy continues.
And DO see an attorney before selling off assets and paying off your
friends first; that could come back to bite you later.
The above is not legal advice; see an attorney for legal advice.
-Question: Credit Card Debt: $123,000.
Minimum monthly payment about $2,800
Annual Salary: $90,000 (8% pretax goes to 401K)
After tax, 401K, and medical, I get about $4,200 a month.
Answer: Since you're sharing everything about yourself, what do you have in your 401K
plan? I assume this is also relevant to bankruptcy. That is, you may be
required by the bankruptcy court to cash out your 401K, pay the income taxes
plus penalties, the remainder used to pay off some or all of your debt. Or
are 401K and similar retirement plans exempt, or partly exempt, from this?
Question: I have the credit card debt for years and the amount keep increasing. I'm
having a very tough time to keep up with my monthly payment. I just got to a
point that I don't care about my credit and I don't think I'll ever get a
loan or a house, so I'm not worry about my credit will be bad forever. I'm
strongly considering filing a bankruptcy and get a fresh start. I'm thinking
of selling my car and my propietoryship business to first pay-off some of my
personal loan from friends but I still have a big debt on credit cards.
Answer: Your "bad" credit will follow you for seven years after filing bankruptcy.
After that, you truly can start again with a clean slate, credit-wise, so I've
been led to believe. If you are still young, it's not a big deal.
However, it's your 401K plan that is the troubling part if you file for
bankruptcy. I don't know if there's a difference between Chapters 7 and 13
in regards to retirement plans. Hopefully one of the net.attornies familiar
with bankruptcy matters will clarify some of my comments.