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If some miracle allows for the debt and loan to disappear, there's just the $323 a month for medical (which is probably not spread out over time, and she would

If some miracle allows for the debt and loan to disappear, there's just the $323 a month for medical (which is probably not spread out over time, and she would have no credit to buffer it, so she would need savings, which she doesn't have). In theory she could have $1093 to spend on rent, food, transportation and incidentals. But there are some requirements to file chapter 7: - First she needs to document all her financial records, which of course she has been doing in expectation of this point in her life - She needs to hire a bankruptcy lawyer, because otherwise she basically has to become her own lawyer and figure out her state/local bankruptcy laws and steps, which is very difficult for most people. - Non-exempt property, such as cash, a second car or car she doesn't use for work, is sold to pay the debt. Does an RV you live in count as a car you use for work? if not, there goes her home. - She has to get time off to go to the 341 meeting and do the mandatory credit counseling and debtor education classes and certification - Filing for bankruptcy costs between $1,400 and $4,000 on average in filing fees and other costs. - The whole process takes about six months on average, assuming everything works out. I would love to know how somebody who's living paycheck to paycheck and can barely afford milk and bread can accomplish this. Clearly there are obstacles that she may not be able to overcome. But I don't think anyone really cares about reality, looking at the way people in this thread are simply dismissing her using various theoretical devices to prove she simply isn't doing it right. If it were easy or simple to fix her life, she probably would have, because she is much more motivated to have a better life than random people on the internet. (Not that people not choosing to look at reality bothers me - it's people who do not fully understand the situation pretending that they know better that bothers me)

tptacek 9y ago
What "miracle"? Chapter 7 will eliminate her debt. That's the point of Chapter 7. She'll need a professional to file for her, that's true. So, she should do what most people who file Chapter 7 do: use the money (saved gradually) she'd pointlessly burn trying to service the debt to hire someone to file Chapter 7. In the meantime, she should immediately stop making debt service payments. It does not matter that the process will take 6 months, because her creditors have no practical recourse against her. Watch someone with a six figure income and significant luxury assets simply stop paying credit card bills that are integer multiples of this debt, and see what happens. Hint: the debt decreases as the credit card companies and their collectors realize you've stopped valuing your credit score. They're hoping beyond hope you'll spend some amount of money, any amount of money to avoid Chapter 7, and they will keep hoping for years. The majority of Chapter 7 bankruptcies are no-asset bankruptcies. People who own homes, cars, and retirement accounts keep them in Chapter 7. A 79 year old woman living in a trailer isn't going to sell anything to retire credit card debt in Chapter 7. It is not only wrong but borderline irresponsible to suggest that someone in this person's circumstances entertain the idea of sending another dollar to a credit card company. The credit card companies are victimizing her today, and she has a clear means of defending herself. She needs to be informed and counseled to make the decision to avail herself of that defense. As for "reality", I've managed this process for people. I'm confident what I'm saying is reality, just like I'm confident that you can find a place to live in a "non-crack-motel" for less than $290/mo.
- peterwwillis 9y ago
  I'm certainly not advocating paying the debt. I'm saying dodge it. But she still will have difficulty saving up for bankruptcy. With the little money she does get, she has to pay for transportation, food, communication, and health and auto insurance. Assuming she abandoned the RV she could maybe find one of these cheap Chicago sublets (which I assume are not in a food or transportation desert) and start saving money (assuming creditors can't garnish social security or pension). But she would still get hit with the occasional emergency bill, extending the time it takes to save. Once she finally saves enough she can go through bankruptcy and probably be successful. So then she could in theory just continue living in the sublet, or wherever in the country has the cheapest housing, until she dies. It's not a very promising life to look forward to, and I don't know how many people would really just stop what they're doing and go full-on monk to recover over this kind of long term process.
  - tptacek 9y ago
    At this point I think we've both disposed of the idea that the $50,000 in credit card debt is the burden it sounds like. I'm mostly writing because, again, I think a lot of people from that generation are loathe to defend themselves against credit card companies through bankruptcy law. Either way: if she's getting good counsel, she's not paying the credit card companies. They're not getting another dime from her.
- gsylvie 9y ago
  Hey, that's me! (Six figure income, stopped paying credit card bills.) Aside from the interest that continues to accumulate, you are absolutely correct: the debt does decrease: At the 7-month mark one of the credit card companies (I owed them $15,000 at 29.9% APR) sent a piece of registered mail: if you send us 3 post-dated cheques for the next 3 months for $1200 each (total $3600), we'll consider the debt paid off. I ignored them and did a Chapter 13 instead. (Well, the Canadian equivalent).

tptacek 9y ago

What "miracle"? Chapter 7 will eliminate her debt. That's the point of Chapter 7. She'll need a professional to file for her, that's true. So, she should do what most people who file Chapter 7 do: use the money (saved gradually) she'd pointlessly burn trying to service the debt to hire someone to file Chapter 7. In the meantime, she should immediately stop making debt service payments. It does not matter that the process will take 6 months, because her creditors have no practical recourse against her. Watch someone with a six figure income and significant luxury assets simply stop paying credit card bills that are integer multiples of this debt, and see what happens. Hint: the debt decreases as the credit card companies and their collectors realize you've stopped valuing your credit score. They're hoping beyond hope you'll spend some amount of money, any amount of money to avoid Chapter 7, and they will keep hoping for years. The majority of Chapter 7 bankruptcies are no-asset bankruptcies. People who own homes, cars, and retirement accounts keep them in Chapter 7. A 79 year old woman living in a trailer isn't going to sell anything to retire credit card debt in Chapter 7. It is not only wrong but borderline irresponsible to suggest that someone in this person's circumstances entertain the idea of sending another dollar to a credit card company. The credit card companies are victimizing her today, and she has a clear means of defending herself. She needs to be informed and counseled to make the decision to avail herself of that defense. As for "reality", I've managed this process for people. I'm confident what I'm saying is reality, just like I'm confident that you can find a place to live in a "non-crack-motel" for less than $290/mo.

peterwwillis 9y ago
I'm certainly not advocating paying the debt. I'm saying dodge it. But she still will have difficulty saving up for bankruptcy. With the little money she does get, she has to pay for transportation, food, communication, and health and auto insurance. Assuming she abandoned the RV she could maybe find one of these cheap Chicago sublets (which I assume are not in a food or transportation desert) and start saving money (assuming creditors can't garnish social security or pension). But she would still get hit with the occasional emergency bill, extending the time it takes to save. Once she finally saves enough she can go through bankruptcy and probably be successful. So then she could in theory just continue living in the sublet, or wherever in the country has the cheapest housing, until she dies. It's not a very promising life to look forward to, and I don't know how many people would really just stop what they're doing and go full-on monk to recover over this kind of long term process.
- tptacek 9y ago
  At this point I think we've both disposed of the idea that the $50,000 in credit card debt is the burden it sounds like. I'm mostly writing because, again, I think a lot of people from that generation are loathe to defend themselves against credit card companies through bankruptcy law. Either way: if she's getting good counsel, she's not paying the credit card companies. They're not getting another dime from her.
gsylvie 9y ago
Hey, that's me! (Six figure income, stopped paying credit card bills.) Aside from the interest that continues to accumulate, you are absolutely correct: the debt does decrease: At the 7-month mark one of the credit card companies (I owed them $15,000 at 29.9% APR) sent a piece of registered mail: if you send us 3 post-dated cheques for the next 3 months for $1200 each (total $3600), we'll consider the debt paid off. I ignored them and did a Chapter 13 instead. (Well, the Canadian equivalent).