Author Topic: Should I pay off a maxed out accounts or go bankrupt?  (Read 1501 times)

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BrokeBob

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Re: Should I pay off a maxed out accounts or go bankrupt?
« Reply #15 on: February 27, 2017 09:55:31 PM »
At this point your situation probably goes beyond the abilities of the people on this forum to help you.

I spent some time in banking, less than a year, and I know that they went over my credit with a fine-tooth comb.  I had to show dismissed court cases, letters from banks and attorneys stating I didn't owe any money, 1099C forms forgiving the debt, etc.  Interestingly, the bank that hired me as a consultant was one to whom I had previously allegedly owed about $65k, and I noticed they ran my credit right before I was fired.  So I understand where you are coming from.

The main reason why certain professions require good credit has to do with whether the potential employee will have nasty creditors coming after them.  When the professional deals with money, you don't want the temptations of taking the money to pay off a debt, for example.

Interestingly, a bankruptcy could actually be a good situation.  The reason is, once you have declared bankruptcy, esp. Ch 7, there are a certain number of years before you can declare again.  So people with bankruptcy in their credit history can get credit faster than those of us who defaulted by never went the BK route.  I know one of my city's top car salesmen went the BK route, and his credit was great shortly afterwards.


Here is the big, huge, enormous problem.

We don't know her field. 
If any of us knew her field, few if any of us could tell you what sort of credit she would need to get a job in that field. 

I know, this is a huge Catch-22.  If she had a job, her credit would be better, but she can't get the job to improve her credit because her credit is bad. 

Here is what you need.

You need to have a discussion with someone who really understand what she needs to get a job in her field.  I mean, someone who really knows the nuts and bolts of it. 

We can give some generic advice for a generic person in a similar situation, but it would take someone who really knows what is what to give you the advice you need. 

CleaningUp

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Re: Should I pay off a maxed out accounts or go bankrupt?
« Reply #16 on: February 27, 2017 11:50:01 PM »
I would suggest that this merry-go-round will repeat itself, either with her or with you.

Blaming it all on the lending industry brainwashing GF is not addressing the root of the problem...living a life-style on credit and credit cards that your income can never support.

It's only a matter of time before GF and you start circling the financial drain unless you learn how to live within your means.

Most of us who have been around this site for some time have learned that lesson, and we try to teach it to newbies like you and your GF.  Playing credit roulette is about as smart as playing the Russian variety just for sport.


myachips

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Re: Should I pay off a maxed out accounts or go bankrupt?
« Reply #17 on: February 28, 2017 03:15:07 AM »
I would suggest that this merry-go-round will repeat itself, either with her or with you.

Blaming it all on the lending industry brainwashing GF is not addressing the root of the problem...living a life-style on credit and credit cards that your income can never support.

It's only a matter of time before GF and you start circling the financial drain unless you learn how to live within your means.

Most of us who have been around this site for some time have learned that lesson, and we try to teach it to newbies like you and your GF.  Playing credit roulette is about as smart as playing the Russian variety just for sport.
+1

yep you need a reality check with you and her and accept that you must now live within your means

see an attorney asap about asset and bk and then go and open a roth ira, and a traditional ira fund them both...where will you be in 30 years man...still playing the same musical chairs...you don't want to reach retirement and be homeless...just an opinion

I read about this legal stuff while staying at a Holiday Inn

Bruno the JDB Killer

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Re: Should I pay off a maxed out accounts or go bankrupt?
« Reply #18 on: February 28, 2017 01:44:27 PM »
There's kind of more to it Bruno. At this point she has two 20k cars and 30k in the bank so I don't know what to do with those assets if she declares BK. I have CA's after me and am in the credit repair process so I don't feel comfortable with holding assets.

In the past she saved my credit in a similar way so I trust her and owe her as well.


If she files BK her 70K in assets will most likely be sold off by the trustee. If she tries to hide the cash or anything else, she'll be in big  trouble. I guess you guys can do what you want, we are not psychologists.
I am not an attorney. Any information I post is strictly my opinion and should be treated as such.

RobinMontrose

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Re: Should I pay off a maxed out accounts or go bankrupt?
« Reply #19 on: March 04, 2017 11:26:11 AM »
Since your credit is trashed and hers is pristine, but except for taking your entire nest egg and paying off her debt so the two of you can repeat the cycle of living on credit instead of earnings, I see the following alternatives (in no particular order)

1: Use the $220K to pay off her debt. When that is done she has no debt but the two of you are once again broke with no source of income, so the credit cards will quickly be used again. The only difference is that this time, you have no more resources to bail yourselves out. Problem with this: You can use your funds to bail HER out, she can turn around and say "Sayonara, Sugar Daddy" and there is nothing you can do about it. In that case you will have no assets, no income and no credit, so she is free and clear and free to abandon you in a heartbeat, and you are stuck.

2: You don't mention anything about what is happening with your creditors? Are you about to get sued? Are there any judgments against you? How much and what type of debt do you owe and how close to SOL is it? If you own the land, you could use the cash to settle your debts and leave hers alone. That way at least you get SOME benefit out of the deal and if she says "Sayonara" she takes her debts with her.

3: You could both live off the $220K and not incur any additional debt and let nature take its course. If she gets sued, she gets sued - you can't (or maybe Shouldn't is a better word) stop it. After all, suing her is like suing the sunshine. You can see it, feel it, touch it and enjoy its effects but other than warmth you won't get anything out of it.

4: She can file BK, you can't.

You have a good point on #4. She can file BK. But she works in the banking industry so that's not good. Right?

After a year in default only one 4k debtor has sued me. I've procrastinated and just started credit repair a couple of months ago. Three out of 15 negative accounts have been deleted so far.

BTW, thank you for the level headed response. So many here seem to be projecting their distrust of their spouses on my question. If it was MY credit and I sold off an asset, even if it is my final asset, I think most people would advise that I pay of my debts.

Bruno the JDB Killer

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Re: Should I pay off a maxed out accounts or go bankrupt?
« Reply #20 on: March 04, 2017 01:58:08 PM »
I doubt BK will affect her job any more than owing 220K. In fact, owing is worse, because she might be more tempted to make an "unauthorized withdrawal" in their eyes.

The "distrust" in most cases is based on experience. In this case, YOU are the gift that keeps on giving. Tell her to fix her own problems, see what her reaction is.
I am not an attorney. Any information I post is strictly my opinion and should be treated as such.

Clydesmom66

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Re: Should I pay off a maxed out accounts or go bankrupt?
« Reply #21 on: March 04, 2017 09:09:20 PM »
I doubt BK will affect her job any more than owing 220K. In fact, owing is worse, because she might be more tempted to make an "unauthorized withdrawal" in their eyes.

You are dead wrong on this one.  There are a few jobs in the financial sector where bankruptcy is equally as bad as a lot of debt.  Not only can a BK cost employment but in some jobs a security clearance. 
Be VERY careful following advice from the internet! What worked for someone with thousands of posts on a message board may not work for YOU in your state.  Consult a lawyer when ever possible.

CleaningUp

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Re: Should I pay off a maxed out accounts or go bankrupt?
« Reply #22 on: March 04, 2017 11:29:04 PM »
I know of no banks where a security clearance is a requirement for employment.

Just sayin' to keep the least sophisticated consumer from getting the wrong idea from your post, Clydesdale.


Clydesmom66

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Re: Should I pay off a maxed out accounts or go bankrupt?
« Reply #23 on: March 05, 2017 12:04:10 AM »
I know of no banks where a security clearance is a requirement for employment.

Just sayin' to keep the least sophisticated consumer from getting the wrong idea from your post, Clydesdale.

You are an idiot.  NO WHERE did I say a BANK job required a security clearance.  I said a BK could cost SOME jobs a security clearance.  Two different sentences.  Two different jobs that can easily be affected by too much debt and/or BK. 
Be VERY careful following advice from the internet! What worked for someone with thousands of posts on a message board may not work for YOU in your state.  Consult a lawyer when ever possible.

11181986

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Re: Should I pay off a maxed out accounts or go bankrupt?
« Reply #24 on: March 05, 2017 12:42:12 AM »
I don't normally get to say this to someone, but you will likely be making the biggest mistake of your life if you take all of your cash and pay off 220k in unsecured debt that does not belong to you.

Get a consult with an estate planning/wealth management attorney.

If this were me or a close family member in your girlfriends shoes, I would gift the 30k to someone to a person I could trust this upcoming December 31 2017 and January 1 2018. Two years thereafter, and MUST make sure two years elapses, file a BK.

If BK is not an option due to employment concerns, change the lifestyle up, and pay back the debt as quickly as possible.  You can help her, but there is no way you should blow the nest egg in one fell swoop and just be in the same spot you are in now in 5 years.

CleaningUp

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Re: Should I pay off a maxed out accounts or go bankrupt?
« Reply #25 on: March 05, 2017 01:27:49 AM »

NO WHERE did I say a BANK job required a security clearance.  I said a BK could cost SOME jobs a security clearance.


Two different sentences in the same paragraph. 

When you learn how to write without ambiguity, I might just consider what you have to say as something more than random neighing in the barnyard.


Clydesmom66

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Re: Should I pay off a maxed out accounts or go bankrupt?
« Reply #26 on: March 05, 2017 01:30:35 AM »
Two different sentences in the same paragraph. 

When you learn how to write without ambiguity, I might just consider what you have to say as something more than random neighing in the barnyard.

Not my fault you don't even have the intelligence of the LSC. 
Be VERY careful following advice from the internet! What worked for someone with thousands of posts on a message board may not work for YOU in your state.  Consult a lawyer when ever possible.

CleaningUp

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Re: Should I pay off a maxed out accounts or go bankrupt?
« Reply #27 on: March 05, 2017 01:37:43 AM »
Oh, my...I got your goat on that one....but you're supposed to be a Clydesdale....

As for your writing, I merely looked carefully at what you said and noticed that you were far from specific in limiting your sweeping statement. 

But hey,  I guess that's a function of your receipt of an education at the barn door.  :D


Bruno the JDB Killer

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Re: Should I pay off a maxed out accounts or go bankrupt?
« Reply #28 on: March 05, 2017 12:31:34 PM »
You are dead wrong on this one.  There are a few jobs in the financial sector where bankruptcy is equally as bad as a lot of debt.  Not only can a BK cost employment but in some jobs a security clearance.


I realize that, but if I was doing the hiring and had to choose between somebody who had filed BK and owed nothing and somebody on the hook for 220K, I'd lean towards the debt free person. One reason would be to avoid having to process endless garnishments, the other is the risk factor.

Surely a bank has to have some interest in their employee's financial status. Don't they ask about this on the application? It would behoove them to do so. Unbridled hiring practices can be bad for the bottom line.
I am not an attorney. Any information I post is strictly my opinion and should be treated as such.

CleaningUp

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Re: Should I pay off a maxed out accounts or go bankrupt?
« Reply #29 on: March 05, 2017 06:27:28 PM »

I realize that, but if I was doing the hiring and had to choose between somebody who had filed BK and owed nothing and somebody on the hook for 220K, I'd lean towards the debt free person. One reason would be to avoid having to process endless garnishments, the other is the risk factor.



There would always be the option of continuing to look for someone to fill the position and send the BOTH of them out the door.