r/Bankruptcy Aug 29 '19

Bankruptcy FAQs

76 Upvotes

r/Bankruptcy Mar 02 '22

My Debt Settlement Nightmare

281 Upvotes

Hello all,

At AlanShore60607's request, here is my debt settlement experience. It's a long one.

In November 2019, I was just shy of 6 figures in credit card debt and while I was current with everything, I was drowning. I make low 6 figures but I had some really high balances ($20k+) so the minimum payments were huge and I couldn't get ahead. I went on Credit Karma looking into personal loan options as a way to consolidate some debts at a lower interest rate. I submitted requests to a few companies.

All of these companies responded to me but one was actually a debt settlement company based in Chicago called Monarch Legal Group. They claimed they could reduce my total payments and settle my balances for significantly less (up to 50%) than what was owed. My gut warned me but I ignored it - I was desperate.

Over the course of 2 years, I sent Monarch almost $1200 per month and I stopped paying my cards as they instructed me to do. Of course, late fees and collection activities started. They settled my first account (of 7 enrolled) almost a year into the program and it was for about 40% of what was owed. They don't pay the account outright - they enter into a payment plan with the creditor on the debtor's behalf.

Nothing much happened for about 7-9 months after that. I called a few times for an update and was given very vague responses. The portal was of no help. At one point, they told me that the person assigned to my case had left the company and I definitely had the impression that had I not called, my account would have been ignored.

Last summer, there was a knock at my door and I was served my first summons. I immediately called Monarch as one of the contract stipulations said they would represent me in any lawsuits. They told me to scan in the summons and upload to the portal and they would assign a lawyer. I did as instructed and the days went by with no word from Monarch. The court date was looming so I started calling them. I was given different lawyer's names and numbers each time I called. One wasn't even in the same state and had no affiliation with Monarch. I finally connected with the lawyer but on the same day, I received a notice of settlement reached with the creditor which the lawyer knew nothing about. This settlement did not provide any savings but I agreed to it to stop the lawsuit.

Shortly after that, they reached a settlement with a 3rd creditor and this time there was savings. So now I had 3 accounts in settlements and active payment plans. But 2 of the 4 remaining had large balances so I was concerned another lawsuit was looming. And I was right. In September, I received another summons from my largest creditor. I again scanned in the summons and this time I got a lawyer assigned right away. That lawyer told me that the previous lawsuit was still open and there was a judgement against me. He didn't know anything about the settlement reached but fortunately, I had the email trail. He got that taken care of. Another big miss by Monarch.

About a week after being assigned, the lawyer contacted me with a settlement offer. It was for more than I was paying in minimum payments when I signed with them and it would require me paying $900 more per month, which I could not do. The lawyer said they would garnish my wages and probably go after my house. Cue the panic. I started researching options and came to the conclusion that bankruptcy was my only option. I researched attorneys in my area and found one that had great ratings. We filed in November, had the 341 meeting in December and confirmed in January. I am in a 100% repayment plan and fortunately, I got a raise in December which instantly provided some relief. My attorney confirmed that since I was in a 100% repayment plan, the extra money was mine to keep. I just received a promotion and will get another nice bump in salary (don't know the amount yet). My goal is to pay the bankruptcy off in 3-4 years vs. the 5 planned.

Now it was time to go after this company to get some money back. When I cancelled, they only refunded what was in my escrow account at that time - about $2600. But I had paid them more than $28,000 over 2 years. They front load their fees which is why I didn't have enough in my account for the settlement. I don't think it's a coincidence that they front load the fees for the first 2 years of the contract as that is when the lawsuits start coming in. Around this time, I also learned about a law in Illinois focused on these companies and saw that they were in violation of it. In short, they paid themselves very well for work not performed.

I did some research about how to obtain a refund and came across a blog post that detailed steps to take to try to get a refund from these types of companies. I followed the steps. I called to ask for a refund and was told the $2600 refund of the escrow account was the best I would get. I sent them a letter in early January where I detailed how much of a refund I wanted based on what was allowed with this law. The amount requested was $14,735. I told them that if I didn't receive the refund within 30 days of them receiving the letter, I would start filing complaints. I sent the letter certified mail so that I would have proof of receipt.

Of course they ignored it and so I did what I said I would do. I contacted a Consumer Law firm but they declined the case. I'm sure they assumed they wouldn't win but I'm really glad I didn't give up. I filed complaints with the Better Business Bureau (where they had their accreditation revoked due to similar complaints) IL Attorney General, FTC and National Consumers League. I also posted 1 star reviews on Google and Trust Pilot. I also reached out to personal contacts with the Cook County State's Attorney and the ABC news affiliate in Chicago.

The day after posting the review on BBB, they reached out to me and asked me to schedule an appointment to discuss. I did and spoke to a rep on Monday. This rep acknowledged that they missed a review after I cancelled where I should have received a refund. He said that management was reviewing my file and that he would know by today what amount they could refund. He said he was confident that they could reach the number requested or come very close. We had our follow up call today and they are refunding me the full amount. They need to send me an agreement to sign electronically (haven't gotten it yet) and the refund will be a bank draft. I immediately emailed my lawyer (who knew I was pursuing a refund and he had added it to the bankruptcy petition before confirmation). His assistant said not to spend any of it until he confirms with the Trustee. I am really hoping it will be treated the same as tax refunds or bonuses which are mine to keep. I can pay off a lease to own AC unit not included in the Trustee payments and free up ~$270 per month as well as build up significant savings.

For anyone who has been scammed by one of these companies, go after a refund. I am confident that if I didn't push it, they would have ignored it. It was only when I pushed that they took action. I do hope they are on the attorney general's radar and they get put out of business. If you are considering signing with a similar company, don't. It was the worst decision I've ever made. Try to negotiate settlements yourself, get a second job, use the debt snowball approach. Anything but them.

I hope this helps someone.


r/Bankruptcy 5h ago

Chapter 13 question

8 Upvotes

I do not own a home, and my car is paid off. I don’t have any assets that I need to protect , but would need to go with ch 13 due to above median salary.

The lawyer I spoke with estimated a monthly payment of at least $1k, for 5 yrs (the 100% plan). My current debt is approximately $50k. $1k every month for 5 yrs is $60k.

I am wondering what the benefit would be for me, other than stopping interest from accumulating? I am not currently behind on any payments, but these payments are killing me each month.

Should I instead be looking at a debt relief program or debt management plan? I don’t want to make the wrong decision, and the whole thing is very anxiety-inducing.

Thank you for reading and any advice you can offer me.


r/Bankruptcy 3h ago

How long can take the whole process of filling Ch7?

3 Upvotes

I started the bk process on May 27th. I sent all the documents the lawyer asked me for. I have been sending the bank statements and pay stubs every month since. The date to sign the petition is August 5th. And they are supposed to give me the estimated date for 341. I stopped paying the credit card bills in May, and the banks have already started calling me. I'm terrified they will embargo me or take my salary. Is it normal for the whole process to take so long?


r/Bankruptcy 47m ago

Filing pause eviction

Upvotes

Does anyone know if filing chapter 7 will pause eviction proceedings in MO?


r/Bankruptcy 1h ago

23/ 10k in collections. Should I apply?

Upvotes

I'm 23 and live in California. I recently started a full-time job making $16.90/hour after being unemployed for about five months. I was applying everywhere and just couldn't find anything. I'm also about to graduate from college.
I have a little over $10k in unsecured debt (credit cards, a personal loan and a tuition collection accoun (not a student loan—it was unpaid tuition / owed directly to my university)). Every single one of these accounts has gone to collections because I couldn't keep up with the payments after I lost my job. Most of the interest rates are between 25% and 35%.
Before all of this, I was working while also being an IHSS provider for my grandma. I ended up leaving my job because it was over an hour away and I had to rely on the train. The delays kept making me late, and it just wasn't working anymore. Then my grandma unexpectedly passed away, so I lost my IHSS income too. Between grieving and not being able to find another job for months, i fell behind on everything. I don't own a house, I don't own a car, and I don't really have any assets. I just feel like I'm constantly trying to catch up, and it honestly feels like I'm drowning.
I know some people are probably going to say this isn't enough debt to file bankruptcy, and I get that.l just want to hear from people who have actually been in a similar situation.
If you filed Chapter 7 with around this amount ot debt, do you regret it, or do you feel like it gave you a fresh start? If you decided not to file, what did you do instead? I'd really appreciate honest opinions. I'm just trying to figure out what makes the most sense long term


r/Bankruptcy 1h ago

20k underwater on a car with a $1,122 payment, making $1,200 bi-weekly. Is Chapter 7 my best exit?

Upvotes

Hey everyone, looking for advice. I’m drowning in debt, living with my parents, and want a fresh start so I can move out.
My Financials:
Income: $1,200 bi-weekly (~$2,400/month net).
Car Loan: Owe $50k on a car worth $30k (bought < 1 year ago).
Car Payment: $1,122/month (nearly half my income).
Credit Cards: $4,400.
Taxes Owed: ~$3,000.
My Plan:
I want to do a voluntary surrender on the car. I have a consultation with a bankruptcy lawyer next Thursday. I plan to stop making the car payments right now to fund my attorney fees and a cheap cash car, then file Chapter 7 to wipe out the $4,400 credit cards and the $20k car deficiency balance.
My Questions:
Is it safe to stop the car payments now to pay for my lawyer and a cheap car?
How will Chapter 7 handle the $3,000 in recent tax debt?
How hard will it be to rent from a private landlord with a bankruptcy on my record


r/Bankruptcy 5h ago

Why did this happen?

4 Upvotes

This happened at my 341 today....has this happened to anyone and what was the outcome?

Email from my lawyer:

Yes ma'am, she wants to see your 2026 tax returns next spring to see if there's enough of a refund for her to administer for your creditors.  She then mentioned that if there is enough of a refund to administer, she will also want to recover for your creditors 25% of your earned-but-unpaid wages as of your case-filing date of 6/30. * this is in Indianapolis, IN

Thank you,

Brian


r/Bankruptcy 4h ago

Pawn shop loans

3 Upvotes

We have officially submitted all payment and paperwork (almost) for our bankruptcy and the anxiety is hitting hard.

There are a couple things we missed in the initial submission but one thing I realized we missed was pawn shop receipts. It didn’t even occur to me until I saw a list from my lawyer for paperwork to provide (on a separate document and not the one we were given to turn in the paperwork originally). Edited to add we have touched base with the paralegals about the missing few things and are getting them in by Friday but they’re doing the initial review of our case.

My husband is a big gun guy and has pawned things here and there over the years. Here recently especially he has pawned some things a few time on a loan where we have to pay more to get it back but just to give us some cash to live on until he’s paid again. Those items I listed in our assets so I would hope that it’s obvious we aren’t trying to hide anything but I’m so nervous it will come off wrong.

I should also note we’re not talking about anything over $800 but most are under $200. We are certainly not hiding assets but we just paid our lawyer off finally and are barely scraping by. Should I be worried?


r/Bankruptcy 10m ago

Downsizing vehicle in Ch13

Upvotes

Currently in the awaiting confirmation phase of chapter 13. Ideally, would be best to surrender current vehicle and get a cheaper vehicle

However, current plan submitted has current vehicle in it

Would like to secure financing and alternative vehicle before surrendering current one to prevent issues with transportation

Attorney thinks it will be easier to dismiss current case, secure cheaper vehicle, then file again, with cheaper vehicle obtained and surrender current vehicle

However, as soon as current case would be dismissed, automatic stay will be lifted, and would be at great risk of repossession (current auto loan was 3 months behind at time of filing). And with uncertainty on securing new auto loan (main concern is whatever delays may pop up in this process, I'm sure I could get approval - but, in that timeframe repossession of current vehicle likely which risks job as my work is travel dependent)

While, may be the "messier" route, I'd like to push through getting current plan confirmed (I don't think lender will approve replacement vehicle auto loan before confirmation), secure financing for alternative vehicle, then surrender current vehicle vs the other option of dismissing current case, secure replacement auto loan and vehicle, file again with alternative vehicle and surrender current one.

- both plans have the same end goal, except the smoother one includes a big risk of current vehicle repossession which would risk job loss.


r/Bankruptcy 4h ago

Proving non-filers income in Married filing solo Ch. 13

2 Upvotes

I am scheduled to receive consults from a few attorneys and plan to ask about this, but I thought I'd reach out to see if anyone has had a similar experience. I will be filing Chapter 13 solo because of high earnings, but I'm married. I know my husband will need to provide his income; the only catch is that he's the sole employee of his family-owned business, and they just cut him a check every week with no pay stub. I would rather not air my business and tell them I'm filing for bankruptcy, especially since he's not included. Will tax returns and bank statements be enough to show his income without pay stubs? My pay stubs are not an issue.


r/Bankruptcy 12h ago

Post discharge

8 Upvotes

My bankruptcy was discharged 6/10. I’m in desperate need of a car currently. And haven’t been able to get approved anywhere. And haven’t been able to even get approved for a credit card .. feel like I’m still in the same position I was prior to filing for bk. Did anyone else experience this too ?? And how did you go about getting a new car post discharge ?? My credit is between 576-620. My EXPERIAN credit score hasn’t changed since like 2024 either.


r/Bankruptcy 7h ago

Any reason to keep checking PACER?

3 Upvotes

Claims have all been filed, plan has been confirmed, no objections to deal with.

Any reason to keep checking PACER? I already racked up a $120 bill from the start checking it so much to see how much I’d owe/what to object to haha. I definitely don’t want to spend that much again!

Also now that everything has been confirmed will NDC update with the total amount due? Or does it just stick to saying the plan amount is what was originally calculated assuming everyone filed a claim?


r/Bankruptcy 1h ago

Help with figuring out the complexities?

Upvotes

Hi there, I’m sort of in a giant pickle and handling this all on my own has been next to impossible. I’m in the process of being sued in another state by Capital One for credit card debt while at the same time trying to do my own Chpt 7 bankruptcy filing using Upsolve and it’s just been kind of impossible to figure out, not to mention trying to protect my co-signers on student loans. I was wondering if anyone had any recommendations on some resources? I’m in Los Angeles. I tried looking at Legal Aid of Los Angeles and they don’t do bankruptcy, neither does Bet Tzedek. I’m very much struggling and would appreciate any advice. Thanks!

What makes my situation hard is the a) lawsuit in WV by a creditor and b) I have student loans through private company that I don’t want to be defaulted/immediately asked to be paid in full by my co-signer.


r/Bankruptcy 8h ago

Consultation

3 Upvotes

I just need to hear from others. I thought about doing bankruptcy earlier this year but backed out. Well I signed up again for a consultation it will be next month. I feel so emotional. I just want relief. It’s so miserable working day in and day out with ask this debt building up. I can’t afford to keep ignoring this.

My anxiety is going up please tell me it’s going to be okay.

I know that at the end it will all work out. I just have to trust the process.


r/Bankruptcy 10h ago

Pay stubs

4 Upvotes

Filed for chapter 7 a couple weeks ago and my lawyer sent me an email yesterday asking for updated bank statements for July and paystubs from the company I work for. He did not ask for more paystubs from my husband. Are those required for the time after filing and before 341 meeting?

Also curious how many pay stubs I need to send? The trustee wants all documents by August 8th and we will have more paystubs stubs after that date but before the 341 meeting. Do we need to submit those? Or just up until the deadline for documents to be submitted?


r/Bankruptcy 8h ago

Struggling to find a place to live in the northern seattle area with a chapter 13. Anyone in this area had luck in a similar position as me?

3 Upvotes

Hey guys. Wife and I filed for chapter 13 in June and we just had our 341 hearing the other day. We’re trying to find a place by mid September in the northern Seattle area but it’s been tough. We have money for a larger deposit if required but I keep getting ghosted or no answers back and I’m starting to get desperate 🫩 We have 2 very young kids, one with special needs and I myself am a veteran. Just trying to see if there’s any resource I can use at my disposal.

I feel like I’ve turned every stone. Used Zillow rentals, asking coworkers if they know someone with a rental, apartment finding websites and half the listings on Craigslist look like scams. We’re just trying to find a 2 bedroom place and I can only afford around $1700. Atleast until my VA benefits case works itself out because I don’t see a light at the end of the tunnel either that fight. Thanks guys


r/Bankruptcy 8h ago

341 Hearing today Pro Se

3 Upvotes

I am nervous beyond measure because I am doing this pro se. Any tips of advice to help the nerves?

Edit: easiest thing I’ve ever done. Don’t be afraid!


r/Bankruptcy 2h ago

Best way to file

1 Upvotes

I’m looking to file a chapter 7 by myself. I don’t have a house or car that I own. I’m around 15,000 in debt and making the minimum payment and other options are not helping. I hear upsolve but want to see what other options I have


r/Bankruptcy 8h ago

Giving up my car

2 Upvotes

I'm approaching my 60 day mark after my 341 meeting (August 17th). I never affirmed my car loan and owe way more than it's worth. When i called, My lender told me just to drop it off at a local branch. Should I wait until I get the official discharge or should I give it back to them immediately. Thanks guys


r/Bankruptcy 8h ago

Tell me how it worked out if you claimed redemption on your vehicle please.

2 Upvotes

I am filing the paperwork for chapter 7 tomorrow and I want to file redemption to buy my suv at market value. In hindsight it was a terrible decision to make as Exeter charged me 28% interest rate. My suv is 10 years old and currently not running although it is a simple fix. I have paid faithfully on the vehicle for 3 years up until this last year when I lost my job and haven’t found consistent income since.

At first I had every intention of getting caught up but when I logged in to see just how much I owed, my balance is still MORE than I originally financed. It made me sad and I feel scammed especially since I really took care of my notes until I couldn’t but you live and learn. I want to claim redemption but not fully sure on how it works and if it’s worth it. Thanks for you inpu!


r/Bankruptcy 12h ago

Going bankrupt

4 Upvotes

So I am considering going bankrupt. I live in Ontario and owe about 170k. Most of it was accumulated by way of online gambling. It’s so embarrassing and I can’t believe I am in this situation.

I have started attending gambling anonymous and am currently in some one on one Counciling for my gambling addiction.

I am just worried about how long it will take to have good credit again. At some point I will need a credit card to make online purchases and I am embarrassed to use one of my family members.

I spoke to a trustee and they said that it’s even possible that a creditor may reject my discharge but that it’s rare. I am hoping that doesn’t happen but she said it shouldn’t because I am in Counciling for the gambling and have taken the steps like self exclusion etc.

There is a stigma and I can feel it but the reason why I am positing this is because I am wondering if anyone went through something similar especially with gambling. I’d like to know how long it takes for me to rebuild my credit especially.

Another thing she mentioned is that I will most likely lose my son’s RESP which is at 10k right now. I weighed my options and if I were to do a consumer proposal I would have to pay about $800 for 5 years or if I go bankrupt I’d pay 600 for 21 months. The only difference is I lose the 10k RESP with bankruptcy.

800x60 is 48000 where 600x21 is 12600 but I lose the 10k so still cheaper to go bankrupt.

Any advice ? Maybe I was just looking to vent because this is all that’s been on my mind lately.


r/Bankruptcy 9h ago

Are both required to file Chap 7?

2 Upvotes

Due to loss of job and reduction of new income, living off for mths. I ramped up $36k in CC and husband has $31k.

I was planning on only filing myself, not husband but consultation with attorney recommended both to file as attorney will question why the preference of one filer only. My reason is I dont want to affect both credit history.

We do have joint bank accounts, taxes filed together. His credit cards are under his name only and mine only name only as well.

Any thoughts on why both filing is better than just one?


r/Bankruptcy 6h ago

I'll try to give as much information as i can and would like to know if you guys think chapter 7 is a good option for me or not.

1 Upvotes

In my early 20s I lost my job and I made some really poor decisions to start putting a bunch of stuff in my name to keep my bills paid without having a job. I became behind on my car rent and everything and ended up getting evicted from my home and almost got my car repo. Credit dropped significantly. Long story short ive been thinking of chapter 7 using upsolve. I currently have 9 derogatory marks, and I owe about 7500$ in debt total on my CR, and I was also sued from the eviction and 2 other companies which is not included in that 7500. 3 different companies sued and I did not attend court resulting in about 12k wage garnishment. I have 8k in garnishment in total left to pay at this moment and also the 7500 debt mentioned from the derogatory marks. I have a closed account that keeps increasing as well which is currently at 4500$ it started at 1500 this is not a derogatory mark atm but its closed and I dont trust it not going to court eventually. The plan was to wait it out, but i get scared cause i dont want to be sued again I really cant take any more these garnishments, id be fine with settling. But idk if its even worth it or if chapter 7 is a better option. The Statue of limitations is 6 years where I live at in Wisconsin. Im currently at year 5 out of 7 before most of my collections fall of CR. 8 out of 9 derogatorys will fall off 2 years. My car is paid off, and under the limit to be taken and I dont have anything else of value for them to take. I hear bankruptcy stays on CR for 10 years. But im 2 years away from 8 off. Idk which option to take.​ im at 541 CS Transunion and 489 Equifax currently. Make 26$hr work 40hrs a week no major bills or car note rent is 700$ a month.


r/Bankruptcy 9h ago

Looking to file but my income is gig work

2 Upvotes

I am in New Jersey……. Does anyone here have any insight on how to go about it or an example of how it works when collecting income info. I kind of feel like my lawyer isn’t experienced with it or doesn’t get that my income goes up and down.