You have a considerable amount of time before there is any risk to you being sued for the credit card debts you are not paying. Creditors like Discover and Capital One will not place accounts with an attorney debt collectors (who they authorize to sue), until roughly 6 months of missed payments. Sometimes accounts are never placed with attorney debt collectors. Filing bankruptcy will stop any lawsuit form progressing to a level where you have to be concerned with aggressive collection action like threatening your home or possessions.
I know you are stressed about the situation, but you have to time to gather up the information you need about bankruptcy. You even have time to save up to hire a bankruptcy attorney.
Your next step should be to connect with a bankruptcy attorney for a free consultation. During the consult with the attorney you can ask about keeping more than one car, and staying in your home. The answers to these two questions are specific to your state. The less equity you have in your home, the more likely you will be able to keep it through a chapter 7 bankruptcy.
The chapter 7 will discharge your credit card bills and other unsecured debts.
Use this calculator to determine how you can qualify for chapter 7 in your state. If you then want to connect with an attorney for a free consult, click through the additional screens in the tool and complete them in order to connect with an attorney in your general area.
If you learn something about bankruptcy from the attorney that gives you pause about following through with it, post additional questions or concerns in the comment section below and lets take it from there.
Readers with similar concerns are welcome to post below for feedback.
2 comment(s) for this post:
- Lindsay:
28 Nov 2012 Hi my husband is being sued by Midland credit(original creditor Chase) for $5600. We responded to the summons with a verify/validation letter which we just received the response to this week which surprisingly all seems to check out. We stopped paying this card a little over a year ago so they are within the SOL. My husbad was recently unemployed and I currently work on the side for my family so there is no proof of income. Midland spoke to us today and told us we can pay 100$ monthly and drop the lawsuit but said if we missed a payment would be automatic judgement. This is one of 9 debts totaling $26000 which Midland has bought most of. We feel like this is prob the first of many suits to follow so we now feel like bankruptsy may be our best option. Problem is we dont have the upfront money to hire a bankruptsy lawyer until we receive our expected tax return in Feb/March. My question is would it be better to settle this out of court and pay the 100$(lent to us by family)monthly until we can file bankruptsy or go to court and let a judgement be put against my husband. Is it possible for them to take our income tax refund? We have no money in a bank account in his name we do own a home and have 2 vehicles financed one of them being for sale. We live in Texas and I know they have some pretty good exemption laws. Any advice would be greatly appreciated. Thanks, Lindsay - Michael Bovee:
28 Nov 2012 Lindsay - I would recommend pursuing bankruptcy as a fresh start given the information you provided. If I were in your shoes, I would see if the family member, who would have loaned you 100 a month for payments, instead front you the down payment a bankruptcy attorney will often take to start working your case. The attorney will probably not file the chapter 7 petition with the court until you fully pay, but they will be retained. This could mean that you can refer any collection calls and letter to the attorney. The attorney, once retained, will contact all creditors, including Midland and the attorney they hired to sue you. That would pretty much put them on notice any lawsuits are a waste of time and money. All communications from Midland Funding, and other collectors would be routed to your attorney. In other words, you can get a head start on your fresh start using bankruptcy for debt relief. Texas does have some of the best exemption laws of any state. If you are forced to wait until you get your tax return to file the bankruptcy petition, and you end up with a judgment before that, the only real risk I see, from what you shared, is the bank account he has (with no money in it). No, Midland Funding cannot intercept your tax refund as a result of the judgment.