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About Regan Shinski
Expertise
I can answer questions on collections, repossessions, bankruptcy, credit repair, credit counseling, FICO scores, credit planning, and the cause and effect of credit related decisions. I can also answer questions on collection settlements and preparing to sue your creditors for false debts and credit credit reporting.

Experience
Fifteen years ago I was financially devasted due to severe health issues. I filed bankruptcy, had a foreclosure, car repossession, tax lien, and ruined credit. I immersed myself in credit law. I settled dozens of accounts and had them removed to improve my credit. I personally sued four creditors and collection agencies and won cash settlements for their false reporting on my credit reports. Since then, I have completely recovered and have nearly $100,000 in revolving credit lines and perfect credit. I have owned a credit repair company for the past five years and have an additional three years of specific work in the collections and debt management industry. I am fully versed in the Fair Debt Collection Practices Acts (FDCPA), Fair Credit Reporting Act (FCRA), and have used them successfully in collection settlements and lawsuits for myself and others. I am also familiar with and abide by the Credit Repair Organizations Act (CROA). I have deleted or helped delete literally hundreds and hundreds of derogatory items from consumers' credit reports and helped negotiate many settlements with collection agencies and creditors. I have also advised people on bankruptcy at any stage. In the current credit market, I have successfully advised numerous people on how to obtain credit and how to negotiate for better terms.

Education/Credentials
BA University of Minnesota

You are here: Experts > Business > Corporate Law > Collections Law > Life after Judgement

Collections Law - Life after Judgement

Expert: Regan Shinski - 10/25/2009

Question
a few years ago, my wife had a Banks of America credit card of which I was an authorize user of, that had a balance of $6.6k on it. Around that time we entered a debt consolidation program that helped us to make deals with all of our creditors. All of the creditors have been settled with....except Banks of America. They didn't want to accept a staggering(to us) monthly payment plan of nearly $300 per month, and instead wished to proceed with the filing for judgment.

My wife was then, and is currently a homemaker, and our lawyer advised us to simply let the case go to judgment since my wife had neither any property, nor reportable wages. He also left us with the distinct impression that after approx. 8 years or so, we wouldn't have to worry about the credit card company collecting on the judgment. So we took his advise, and now have the judgment over our heads.

After doing a bit of searching, it seems that we both may have the judgment removed from our credit history after 7 years have passed, but it appears that our lawyer may have been completely wrong about the period of time that an entity has to collect on a judgment in Ohio. It seems more likely that the company has 21 yrs(RENEWABLE!) to collect. Well, that's definitely a problem. My wife wishes to re-enter the workforce within a few years or so, and from a few other things that I've read, they may be able to snatch up assets in my name, not because I was an authorized user, but because I'm her husband(not 100% sure on that one since they haven't come after me yet).

I understand from previous posts that you are strongly opposed to filing for bankruptcy, but might this be a good option before my wife re-enters the workforce, and/or she decides to open up her own bank account? Of course if we receive an inheritance, an unusually large tax return, or win the lottery, we will more than likely just pay the balance, but these things are all unlikely. We simply can't afford to offer anything over the original monthly offer as even that was, and still is stretching it for us. What are your recommendations?

Thanks in advance for your reply,

A Concerned Debtor

Answer
Daniel:

I am not dead set against bankruptcy but it has to be in the right situations. Too often it is used too quickly. Let's look at some options for you.

The average attorney fees are about $1500 plus another $300 - $500 in filing fees and required credit counseling. It is possible you may find an attorney for less in certain parts of the country but it also could be significantly more. It just depends on location and your case. So off the top you are out of pocket at least 30% of this debt.

You likely will have an increase in various insurance rates for the next ten years your bankruptcy is on your credit reports. Increased auto, home, health, and life insurance payments add up.

Forget getting anything close to prime credit while the bankruptcy in on your reports. Not only will you will pay higher interest rates for any new credit you MAY be able to get a few years post-bankruptcy but existing credit you keep through bk will either be closed or have their terms adversely affected. Increased interest alone can account for more than your debt over the course of your bankruptcy.

Buying a house is out of the question for at least two years, likely longer. In this market, rent is generally more than owning. In general, you cannot keep your existing house in a chapter seven bankruptcy. Would you have moving costs?

You may not be able to get a job in certain fields because of the bankruptcy. People have lost promotions or transfers to management positions because of bankruptcies. Loss or decreased income is a distinct possibility in some cases.

You can see with the combination of all these factors, you may easily end up paying more than what your actual debt is right now. More importantly and bankruptcy stays on credit reports for ten years but is public record forever so the negative ramifications can go on a LONG time.

Really, I am not 100% against bankruptcy. People just really need to know the ramifications. It may still be right for you. Remember you still have a means test to qualify for a chapter 7 as well. Good luck in whatever path you choose. I hope this information helps you make the educated choice either way :)

Regan
mbscompany@aim.com

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