[LuvNH]

I never thought I would be doing this, but my attorney wants $600 per hour and $200 for phone call, so I am hoping someone can answer my query.

I have a granddaughter who is old enough to know better; however, she messed up big time. She has allowed herself and a boy friend to run up $20K in credit card debt on her cards. He has taken off and she cannot pay it off. She is talking bankruptcy.

Does anyone know what bankruptcy does to your life. Can you ever get a credit card again. Does it go on your employment info. Does it dog you forever.

I would prefer to do this through a pm rather than putting her private information on a chat line. Any information would be gratefully appreciated.

[retiredguy123]

A $20K credit card debt is nowhere near enough to be worth filing for bankruptcy. She should make a deal with the credit card companies in which her debt can be reduced and she can make lower payments over time. Good luck.

[Toymeister]

PM sent. Sorry to hear about this.

[rjm1cc]

Best to contact cc companies and see what she can work out. Probably stop or cancel all interest and pay principal is the best she can do. Second choice would be a credit repair company but I would worry about being taken advantage off by one so make sure you research the co if you go this route.
$600 an hours would tell me I need a new attorney.

[Keefelane66]

Filing Without an Attorney | United States Courts

[LuvNH]

Thank you to all who answered my question. I had been researching one of the companies who works with the credit card companies to work out a payment plan, but she is frantic and has been told she needs to do a bankruptcy. Unfortunately, there is a lot more to this story; i.e. professional white collar criminal preying on stupid young girls who think they know it all! He gets to walk away and find another victim and she is left to pick up the pieces.

[Keefelane66]

A Chapter 7 bankruptcy may stay on credit reports for 10 years from the filing date, while a Chapter 13 bankruptcy generally remains for seven years from the filing date.

If she does but I doubt. She could borrow from her 401k and pay herself back over 5 years interest is paid back at prime rate + 1%.into her account.Credit card interest is around 28% on my last disclosure and my rating is “840”

[Boomer]

Originally Posted by LuvNH

I never thought I would be doing this, but my attorney wants $600 per hour and $200 for phone call, so I am hoping someone can answer my query.

I have a granddaughter who is old enough to know better; however, she messed up big time. She has allowed herself and a boy friend to run up $20K in credit card debt on her cards. He has taken off and she cannot pay it off. She is talking bankruptcy.

Does anyone know what bankruptcy does to your life. Can you ever get a credit card again. Does it go on your employment info. Does it dog you forever.

I would prefer to do this through a pm rather than putting her private information on a chat line. Any information would be gratefully appreciated.

Noooooooo! Please rethink the idea of bankruptcy. $20,000 looks like a fortune to her now, and she is no doubt under stress and probably embarrassed. . .

But this stuff happens all the time and usually to the nicest, kindest of women. She can handle it -- and then chalk it up to the cost of an education. She'll be OK, and she will never again fall for that type.

Right now, she is in the moment and thinking bankruptcy could be a quick fix that would give her an immediate clean slate. I don't know how long filing bankruptcy would follow her, but I think it could be longer and more costly than trying to clean up the mess herself -- as unwieldy as that idea probably sounds to her while she is in the throes of the emotional component of this.

Buying into "credit repair" can open another can of worms. I recently read an article titled "The High Cost of Bad Credit" in the New York Times Magazine, dated June 7, 2023. (I pick up a Sunday NYT from time to time because I like to read a hardcopy paper once in a while. I read this article a few weeks ago. You can find it online with a Google of the title and paper, but it is behind a paywall. You should be able to read the whole thing though if you grab it on the first try.)

There are a lot of people in the "business" of credit repair who are scamming others who are in vulnerable situations. There are some who really do try to help, but they mostly charge, too, and finding one of those would not be easy........

I read the whole article (a long one) about what they do and it seemed to boil down to writing letters to the credit card companies. The letters they provided were basically boiler plate and she could do that herself. She should be able to find some info on how to give it a try. Seems like asking for a significant interest reduction might be the way to go. Worth trying, anyway.

My next thought is a long shot because I don't know if there are still such things as zero percent interest credit cards where she could transfer at least some of the debt. (Years ago, I advised someone to do this. They had been living high on the hog and were in excess of $50,000 in debt. They were able to transfer balances because they had been making their payments and had good credit scores. That is another weird thing about credit scores. If you don't borrow money, your score might not be as high as those who do and just make the payments.) If these cards still exist, she might be able to transfer. The zero percent was always for a very limited time, but it could help to make a dent in the dollars owed. She should see if this is a possibility. If she has been making payments, she might be able to do this -- if there is still such a thing as zero percent.

Something else that crossed my mind is that she should keep a very close eye on her credit because he no doubt has enough information to keep on using it.

This will not be easy, but she will feel better as she works her way through it.

(Now I will address the big elephant in the room: I know that interest-free or low-interest loans can sometimes be available from close relatives, but those can get messy, especially if there are other offspring. With such family loans, the lenders need to have signed paperwork (fwiw) and must never loan money they do not have or cannot afford to lose and certainly must never co-sign a loan. If a private loan is even on the radar (please do not comment) I think I would start with just a part and see how it goes, not loan the whole amount.

Well, I don't know if anything I have typed here can help. But please tell her not to be hard on herself. She is not the Lone Ranger in this one. Happens all the time. She will be fine and far more aware and can go around warning others.

(I wish there were a way that these good women could sue the puny b@llz off those losers who take advantage of them. . .Now that could be worth the cost of a lawyer. . . Damn, I shoulda gone to law school when I retired, relatively young. By now I could have been Pro-Bono Boomer with an airbrushed ad on the side of city busses.)

Boomer

PS: LuvNH, no need to respond to this with comments in another post. This is a very private matter for you and for her, and I respect that. Hug her and guide her. When she works through this, maybe with a combination of things suggested by others, and gets it all truly behind her, she will be tougher for it -- and she will recognize that type of guy immediately -- and will accept the fact that $20,000 was not too bad for the cost of an education these days.

[OrangeBlossomBaby]

There are lots of "introductory specials" for new credit cards. Chase, Discover, and others all offer them. It's not likely that she'll get one with a $20k credit limit though, if she doesn't have the kind of job where she can pay that $20k off within the first year (and not add new debt to the mix). What she might try to do - is get two brand new cards with the 0-percent intro rate, with a 1-year minimum window for that special. Transfer $500 less than the max on each card, whatever that max is. So if the credit limit on card #1 is $8000, then transfer $7500 to that card. If the limit is $3000 on card #2 then transfer $2500 to that card.

Then call the current card's bank, tell them you want to put a hold on the card so NO new purchases can be made on it, and ask them if they'd work out a no-interest deal to pay off the balance.

Then pay THAT card off ASAP, whatever the balance is after you transfer to the other new 0-interest cards. Meanwhile, pay the minimum on each other other two new cards.

Use only one of the new cards for new purchases - groceries, gas, and that's it. Don't even think about buying new underwear until the original credit card is paid off in full AND completely closed.

Once that original card is paid off, double, triple, or even quadruple the minimum payments on each of the new cards for a couple of months. If the minimum is $50, then pay $200 on each if you can. This should allow you to start saving a little - so that in a couple of months, you can start paying down MORE every month. And every few months - pay more, and more, per month - to hopefully get the full amount of the original debt paid off in full.

[BrianL99]

Originally Posted by LuvNH

I never thought I would be doing this, but my attorney wants $600 per hour and $200 for phone call, so I am hoping someone can answer my query.

I have a granddaughter who is old enough to know better; however, she messed up big time. She has allowed herself and a boy friend to run up $20K in credit card debt on her cards. He has taken off and she cannot pay it off. She is talking bankruptcy.

Does anyone know what bankruptcy does to your life. Can you ever get a credit card again. Does it go on your employment info. Does it dog you forever.

I would prefer to do this through a pm rather than putting her private information on a chat line. Any information would be gratefully appreciated.

If your Granddaughter were to listen to most of the advice you've been given so far, she'll end up in more trouble than she's in now.

Bankruptcy is not the end of the world. In some case, a credit score will go up when someone files BK. Re-building credit after a BK, is no where near as hard as it use to be. There are a zillion companies out there, who will give her a "secured credit card" and then transition that card into a straight credit card, within 6-12 months. That way, she can re-build her credit.

There are other ways out of her situation, but I'll get pummeled if I laid them out, publicly. Most lawyers with any familiarity with credit card debt, will be able to explain the reality of their debt collection practices and explain what motivates CC companies to make deals. Trust me, they don't make deals on current debt. They only negotiate, once they become convinced it's cheaper to settle, than trying to collect.

You don't need a super star lawyer to file a simple, small BK like $20,000. She should be able to find someone that will handle her case for $2000-$2500. In every city and town, there are lawyers who specialize in credit card and other debts. You can get their names, if you show up to "Motion Session" and look at the docket. 1 or 2 lawyers will probably be handling 20-25 clients, all of whom are owed money. That's the kind of lawyer it's worth speaking to, as long as they don't have a conflict. Usually, if you ask in the Clerk's office of the local courthouse, you'll likely be pointed in the right direction.

[shaw8700@outlook.com]

She could a get second job to pay off her credit cards. That way you know she will never do the same thing again.

[manaboutown]

Bankruptcy will haunt her for a very long time. Renting an apartment, gaining employment and in many other ways. To go bankrupt over $20,000 is just not worth what it will cost her in many ways long term.

[Blackbird45]

I had a work mate friend years ago who found himself in credit card trouble.
He did not use a lawyer, but he did have a good accountant, who dealt the credit card companies on his behalf.
If I remember correctly, I think they settled for 1/2 of what he owed.
What I found funny was no sooner did he pay them off when they started sending him new credit cards.
He was totally irresponsible when it came to money, I would not be surprised if got into trouble again.

[LuvNH]

Originally Posted by shaw8700@outlook.com

She could a get second job to pay off her credit cards. That way you know she will never do the same thing again.

You could have phrased it a little better, but Ill reply to you. My Granddaughter is working two jobs. She starts at 8 am and gets home at 8:30pm, I believe that is about 13 hrs. She is paying for her stupidity, while he is already shacked up with a 19 yr old.

She has a supportive family around her. All I wanted to know was what a bankruptcy does to a life, and to the people who answered that for me, THANK YOU.

[maggie1]

Originally Posted by LuvNH

I never thought I would be doing this, but my attorney wants $600 per hour and $200 for phone call, so I am hoping someone can answer my query.

I have a granddaughter who is old enough to know better; however, she messed up big time. She has allowed herself and a boy friend to run up $20K in credit card debt on her cards. He has taken off and she cannot pay it off. She is talking bankruptcy.

Does anyone know what bankruptcy does to your life. Can you ever get a credit card again. Does it go on your employment info. Does it dog you forever.

I would prefer to do this through a pm rather than putting her private information on a chat line. Any information would be gratefully appreciated.

Check this link on the cons of filing bankruptcy and the alternatives that are available. Until she gets this behind her, the best advice I could offer would be to pay cash for those incidentals she would normally have used a credit card. Then I'd tell her to lock her credit so the POS she was living with can't apply for a new card in her name. My final suggestion would be to develop the mindset "If I can't afford it, then I won't buy it."

Pros And Cons Of Filing Bankruptcy — Forbes Advisor – Forbes Advisor