What is better for your credit file

[karlmich]

Just wondering what is best for your credit file. Not paying on your unsecured cards or filing chapter 13 and paying back everything. I am just wondering because I am not sure if fileing chapter 13 is beneficial. as it can stay on your report for 10 years and the former will only stay on for seven years. I can always try and file if they come back and sue me. One last thing, can they get a garnishment for an Unsecured Credit card? Not sure in Michigan if they could or not. It is actually Unsecured.isn't it????
thanks for your comments.

Karl

[Trish]

Well......that is a tough one.
I see your point on COs reporting time vs. a BK.
I think the main reason (and this is just my opinion) a lot people file BK is when there is no other alternative.........for a clean slate......and for peace of mind.

I really do not have much experience with BK........maybe chane or jj can give you some advice in that area.

As far as garnishment......here is what I found out:

Since Michigan does not have its own State Laws regarding wage garnishment, they follow Federal Law:

Federal Garnishment Exemption

Federal Law exempts from garnishment 75% of disposable earnings per week, or an amount to 30 x federal minimum hourly wage, whichever is greater.

So it looks as though they can.

[jjgross]

Originally Posted by karlmich

Just wondering what is best for your credit file. Not paying on your unsecured cards or filing chapter 13 and paying back everything. I am just wondering because I am not sure if fileing chapter 13 is beneficial. as it can stay on your report for 10 years and the former will only stay on for seven years. I can always try and file if they come back and sue me. One last thing, can they get a garnishment for an Unsecured Credit card? Not sure in Michigan if they could or not. It is actually Unsecured.isn't it????
thanks for your comments.

Karl

If you don't pay and they sue and you don't pay they will keep a public record on for much longer up to 20 yrs.As for bk13 all it does is work out a payment plan bk 7 will be on for 10 yrs,creditors for 7.so it;s your choice

[Trish]

Originally Posted by jjgross

If you don't pay and they sue and you don't pay they will keep a public record on for much longer up to 20 yrs.As for bk13 all it does is work out a payment plan bk 7 will be on for 10 yrs,creditors for 7.so it;s your choice

You're talking about if he gets sued and they get a judgment against him? Yeah.....that's true. Didn't think of that because judgments are renewable.

But what if (and I'm just curious here) you have a CO......and while you are in the process of being sued, you file for BK and put that CO in the BK?

Is that possible? Any idea if that would stop the lawsuit?

[jjgross]

Originally Posted by Trish

You're talking about if he gets sued and they get a judgment against him? Yeah.....that's true. Didn't think of that because judgments are renewable.

But what if (and I'm just curious here) you have a CO......and while you are in the process of being sued, you file for BK and put that CO in the BK?

Is that possible? Any idea if that would stop the lawsuit?

In a bk any debt before you file even if not listed is deemed under the bk after you file any debt can be added.
Trish for some reason i'm able to post a little it takes 20 minutes to get one post.

[Trish]

Wow you're still having that much difficulty?
That really sux. Sorry.

[karlmich]

Originally Posted by Trish

Well......that is a tough one.
I see your point on COs reporting time vs. a BK.
I think the main reason (and this is just my opinion) a lot people file BK is when there is no other alternative.........for a clean slate......and for peace of mind.

I really do not have much experience with BK........maybe chane or jj can give you some advice in that area.

As far as garnishment......here is what I found out:

Since Michigan does not have its own State Laws regarding wage garnishment, they follow Federal Law:

Federal Garnishment Exemption

Federal Law exempts from garnishment 75% of disposable earnings per week, or an amount to 30 x federal minimum hourly wage, whichever is greater.

So it looks as though they can.

So lets look at this; If you are saying 75% of Disposable Earnings per week, what are we talking about here? they can take 25% of my take home right off the top? So $435 a week will go to them or do they take out 25% After they see what my current bills are? That is a big difference. We are talking $1740 per month going to a judgement or are we talking about about 300 per month which would represent the portion of 25% OF DISPOSABLE. If they were to do the first scenerio that they would force me to not pay on my other obligations. Either way some one else will be harmed directly(myself) or indirectly other creditors. So what does the court do for judgements?

Now, as for the BK13. I make enough money to pay all my bills in less than three years. According to his plan. The attorney was telling me that my credit standing will be better even by the end of this year, but the issue is that I have to get another car becuase my lease will be up(which I will remain paying on up till i turn it in. Then I will need to get another WHo is going to give me a loan to get another car or purchase? this BK complicates my life in such a bad way, but so does Discover card trying to sue me. If credit cards are Unsecured How can they rightfully sue you for Money if it is the risk that they are taking by giving you an unsecured account. They should take their lumps as I have had too. But i know it does not work like that.

[Trish]

Yes, that's why I say it's a tough decision.
Judgments are NOT fun (that I do have experience with unfortunately)......

I fought tooth and nail on an old repo lawsuit that should have been considered out of SOL. Judge didn't care.....and I (being very ignorant to the court system) did not follow protocol correctly......so basically we lost on technicalities. It was an 8K debt and we now have to pay $450/mo to them.

That's a lot.
So yes, that is what you would look forward to if you were to get sued and lose.

A BK can make it very difficult to get any loans, lines of credit or credit cards.
Not sure for how long........but I know it will make like tough for a while.
Have you, by any chance, looked through the BK forum at CB? I hate to refer you to another site but they do have a lot of good info on BK over there. I do know (by reading) that some people have had to wait 2-3 years before they are able to apply for a mortgage loan. For an auto loan, there are companies out there that will take you with a BK on your record.......but your interest rates will be higher.

[patricewhall]

What is suspect you are asking is - what is viewed more favorably in a credit file. The answer is secured debt that is paid on time. Secured debt is debt or a loan secured by a house or car. However, any favorable (timely payments) credit entries make some type of positive impact to your credit. K. Patrice Williams JD

[creditcrunch]

It's best you pay your debts while you can than to have the authorities run after you. When they do, the consequences on you record will be awful. Try to go for the road that allows you the cleanest or at least the very least damage on your record.

Credit records, sadly mean everything to a good number and it can very well kill your chances of work or leisure.

Eitherway, you get 'screwed'. So I'd say the first option is better.

I'd have to agree though. It's a tough call.