Bankruptcy Law/Bankruptcy


Hello and than you for your time. I currently live in Mississippi but have lived in Alabama until October 2015. It was recommended to me that I should declare bankruptcy but not by anyone that I really know, so I came to you. Currently I have ~$70,000 in student loans from SallieMae and a couple of credit cards that I'm having to figure out due to an ex getting my information and failing to pay. My interest rates are 9-12% on the loans. I have a job and a car (fully paid off) neither of which can I afford to lose since one is reliant on the other. I'm getting a little desperate here and any student loan consolidation places I've found will only do it if you've graduated. I have actually had to put a hold on school because I can't pay out of pocket not can I afford anymore debt. I'm not sure if there's any other information you need, but again, thank you for your time.

Short version:  don't file bankruptcy.  You cannot discharge student loans unless you're almost dead and unable to work at anything, like holding up a cardboard sign on the corner begging for money for example.  For a couple of credit cards, I'm assuming they aren't very much.  Even if they are I wouldn't file.

Instead, I would suggest something that will ruin your credit for a spell and that is stop paying on the credit cards.  The reason:  they will NOT negotiate balances, rates or anything else with someone who is up to date but sees trouble ahead.  Makes no sense but that's how it works.  You might succeed in getting the balances reduced 50 to 75% with this process and/or the interest rates dropped substantially.  I've heard clients say "I just can't pay/new job/cut hours " etc when they call (and they will) and ask why; then keep not paying until you get the deal you want.  Will they sue?  Doubtful but possible although it is not something we see a lot of these days.  Worst case, if there is a suit all they can get is 25% of your net pay per pay period; but you might want to do two things -- stop paying and buy some money orders for the money you've not given them -- money orders aren't payable to anyone -- and hold on to them so the money doesn't get spent.  Note well:  they cannot, absolutely, attach your pay without first getting a judgment -- collectors threaten this all the time though - if you don't pay right now we're going to attach your pay this next payday.  Can't happen but most folks don't know that and pay.  This is more of a collection agency tactic.

In any event, after not paying for a spell, when you can make a good enough deal, you have $$ to pay off a substantially smaller balance.

After that's done, I recommend getting a secured master card or visa from Wells Fargo Bank as they have a great deal going right now -- $35/yr fee, no set up charges;  and you make a deposit into a blocked savings account that is collateral for your credit line -- so your actual credit doesn't matter AND this shows up on the credit report as a credit card.  Prepaid debit cards do not help your credit.  Hope that helps.

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Consumer bankruptcy questions invited. I've been filing Chapter 7, 11 and 13 cases since 1985 in Calif and Arizona. I do NOT do homework questions. Let me know what state you're located in when you write. My bankruptcy practice is limited to California and Arizona but inquiries from other states are welcome. Your local jurisdiction determines exemptions. Find more background information at our website, Individual Chapter 11 and small business chapter 11 questions invited. We can also advise on the creditor's side if for example you have a fraud case, money judgment etc against someone who has filed (or is threatening) bankruptcy. We have filed and defended numerous adversary complaints in bankruptcy court and opposed trustees' demands for turnover of assets from time to time.


My partners and I have filed over 5000 consumer and small business cases to date in California and Arizona.

I've been a member of the California bar since 1984 and Arizona since 2004; also a member of the National Association of Consumer Bankruptcy Attorneys, Bankruptcy section of the Arizona State Bar, Tucson Association of Consumer Bankruptcy Attorneys, Arizona Consumer Bankruptcy Counsel and American Hellenic Educational and Progressive Association (AHEPA).

I've written a booklet on land trusts for real estate owners, players and dealers, and co-authored a special edition of "Stop Sitting on Your Assets". I was a writer of a monthly law review article relating to California real estate issues and pending and recently enacted legislation.

Attorney at law, experienced in trial procedures, adversary complaints filed and defended and numerous claims objection proceedings as well as filing cases for consumer and small business debtors.

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