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cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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I went to see a bankruptcy attorney today as Im considering

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I went to see a bankruptcy attorney today as I'm considering filing for Chapter 7. I'm 26 years old with no property, no car worth above 3000, and about 35,000 worth of debt. The majority of it is medical as I recently had a stay in the hospital without insurance. I have been unemployed for 3 months and currently collect unemployment. I'm just trying to get a second opinion of whether or not this is a good idea? My credit is absolute junk. Will I be a better credit risk after a CH 7? How long before I can rent an apartment or get a school loan? Just trying to figure it out.
Basically the only downside to filing bankruptcy for someone who is "judgment -proof" (with little assets and on unemployment), is that one has to wait 8 years before doing it again. This means that person has to be very careful going forward to not incur any debts that cannot be paid, because not being able to file leaves one vulnerable to judgments that cannot be discharged.
The other factor to consider is how much you are likely to earn when you do return to work, because if it is over a certain amount (41724.00 for single person in Ohio), you may not be able to do so.
So, one who is judgment-proof has to balance the fact that bankruptcy is not necessary at this point with the fact that bankruptcy might not be available later.
Bankruptcy causes the credit score to nosedive (unless the score is already low because of delinquent debts) and remains on one's credit report for 10 years after filing. However, one's credit score tends to start to improve within one year after filing if no further negative input.
Since bankruptcy stays on the credit report for 10 years, that is how long it can affect apartment hunting and student loan applications. However, there are many landlords who do not check credit reports.
Customer: replied 7 years ago.
I do not expect to be making over 40,000 once I return to work. I also don't plan on piling up more debt once I file if I choose to do so. Right now my main concerns are being able to get back to school and being able to move out of my mother's house. My current situation has put me in a bind and I am just looking for the wisest way to handle it. My credit score is awful due to more than 7 delinquent accounts. I believe it's around 500 the last time I checked. My thought process is that it may take a couple years to rebuild my credit after filing bankruptcy, but it's going to take years as is paying back everything I owe with these new medical bills that the hospital isn't allowing a payment plan on (even through a third party.) I'm trying to turn my life in general around. I know this seems like a last ditch effort or as if I'm trying not to take responsibility, I'm just not sure what else I can do. Also, when I spoke with the attorney today...he said something about getting my mother to toss my name on one of her credit cards and piggy back on her credit score? Is that legal?
Additionally, there is a very good possibility that with added fees, and increases in interest, you will be paying these bills for the rest of your life. I am not saying filing a bankruptcy now is a bad idea - I am just trying to give you the downside to doing so, even though the downside seems highly unlikely. I can only provide information, to help you make your decision. However, I am a great fan of bankruptcy, as I see how struggling with debt can be devastating, and unnecessary.
It is not necessary to put your name on one of your mother's credit cards, as within a year, you will be offered your own by credit card companies, who know that you cannot file again for 8 years. At first, you will receive offers for cards with annual fees. If you turn these down, you will soon after receive offers for cards with no annual fees.
The bankruptcy should not have a substantial affect on an application for a student loan, because student loan companies know that this type of debt is not dischargeable in a bankruptcy, so would ultimately not affected by one.

Edited by Christina Fortunato, Esq. on 6/8/2010 at 5:39 AM EST
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