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Veteran Contributor

Bankruptcy at 26

If you were a girl, 26 years old, 3 yr old child, deadbeat boyfriend (extremely deadbeat - back child support on 3 kids, won't work) who is the father of your child, are $12,000 in debt and the only collateral you have is a vehicle with 187,000 miles on it, needs $2000 worth of work on it and valued at about $3000 - would you file for bankruptcy?

 

The girl works for me part-time and that was their only income.  The boyfriend has now worked for 2 weeks, but I don't expect that to last.  He has had 3 jobs since August 1 and worked a total of probably 2 weeks amongst the 3.  He has 4 kids by 4 women including her.  They just moved back in with her parents who don't really get along with the boyfriend, but it was about the only alternative.  Her parents are also filing bankruptcy due to medical bills from a heart attack. I have told her to her face to give the guy an ultimatum to get a job and hold it or get the heck out.  She knows I am right, but, I think, has decided she would rather live in poverty than face raising her kid on her own.  I told her that the dad is setting a poor example for the child and you don't want the kid to think it is ok for Dad to sit around all the time while mom works her butt off.  I don't think she thinks there are any better fish in the sea.

 

I told her that I would hate to file on $12,000 and have no back-up plan other than living with my parents.  They are typical of the generation that can't pay their bills other than their cell phone which is $180 per month.  I didn't know really what to respond.  I would like to see her go to school, but will the bankruptcy on her record affect any financial aid possibilities. And, if she can't be responsible with her paycheck, how will she/they ever be responsible with grant money?   If the boyfriend would just keep working, and they would face reality, $12000 isn't that much money.  It could be done and in a short amount of time in my opinion.

 

Would you advise filing on that amount of money?  I would hate to see my kid do it, because I know the root of the bankruptcy would be lazy and poor money management. 

 

 

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9 Replies
Senior Advisor

Re: Bankruptcy at 26

I would give her a raise if she really is working her butt off.

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Senior Contributor

Re: Bankruptcy at 26

I agree, the first thing she needs to do is get rid of the loser....and learn about protection.  I would not advise on filing bankruptcy over $12000.  Is she working at the farm or in town with you?  If she's in town then sell the car and use that money to pay down some debt. 

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Honored Advisor

Re: Bankruptcy at 26

Bad situation, and probably not going to get any better if she keeps that guy and/or keeps having kids.  That said, she is in the spot she is in right now, and there are issues with BK that she needs to discuss with someone who knows the laws on it in your state. 

 

First, I do not give financial advice to my employees, unless they happen to be my children and ask for it. 

 

When I hear too much about someone else and their money, it is usually more or less an indirect appeal for a "loan."  If you are foolish enough to lend to her in her situation, which just subsidizes the bum she's attached herself to, consider it money gone. 

 

 If she has asked you for advice, I think she needs to consult a credit counseling service, and there are some legitimate ones that may help her.  Do some research, and see what you can find out about such services in your area, and recommend them to her to consider. 

 

If you want to help her in a substantial way, call your own attorney and describe the situation, and your desire to get good advice for her as a valued employee.  If you are advised to do so, offer to have the attorney sit down and explain options to her, and pay him for his time, which ought not to be more than an hour.  Discuss with him or her up front what the costs will be to you for this consultation. 

 

Yes, a bankruptcy can affect your opportunities in some respects...some landlords won't rent to you, some employers may not hire you, some professions may be difficult to get licensing for in the state...but, that is advice that the legal professional can give her.  

 

Twelve thousand dollars is not a lot of debt, unless you have no way in Hades to earn that and support yourself and your children, too.  All things, including debt, are relative. 

 

Of course, if the guy would work, they could be out of debt in a matter of no time, if they applied his income to the balances owed, especially with housesharing now.    And, pigs may someday fly. 

 

Also, the mothers of his other three children are due support payments for those kids, so this girl and her baby stand way back in that line. 

 

In your gaining of a picture of the debt, is it mostly on credit cards or other unsecured debt?  If so, there is a statute of limitations, also specific to your state, after which the unsecured debt is erased, if she stops charging to the accounts and making payments.  Her FICO score will  be shot, but it is shot anyway, most likely. 

 

A cell phone does not need to cost $180 a month, so there is something screwy there.    In many states, if you receive food stamps or other public benefits, there are free cell phones that provide several hundred minutes a month...here in NC, I think it is 250 minutes each month, at no charge whatsoever. 

 

Just taking that $180, or even half that, and applying it to the debt you know about, would erase it in full and leave her in good standing.

 

Frankly, I think you are hearing a lot about her situation because she is hoping you will help her "solve" it.  While I have helped people in the past, and will probably do so again, I know now that it mostly just postpones the inevitable. 

 

Unless she learns some money management skills, she will be bankrupt eventually anyway.  What she does need to know is what that action will cause in the way of consequences, and  that this is a get out of jail free card that she won't be able to use again for a very long time...she may want to save it for a bigger problem down the road.   

 

Honestly, I think her hard road is of her own making, and will get much harder.  She may work hard , and that is great...people with three kids have to work hard...I know we did.  Going to school may be a great thing for her, but you are right about the grants evaporating, and then she will hav estudent loan debt, too. 

 

I will say one more thing: bankruptcies are NOT free.  The lawyers who file them get paid, plenty and first.  I have heard attorneys say that a given person had no means to declare...meaning they had no way to pay for the legal bills associated with the proceeding.  It is not free, it isn't even cheap...but, your counsel could tell her that, too.   

 

Money management is her highest learning priority...then, she can make an informed decision.   

 

 

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Senior Contributor

Re: Bankruptcy at 26

JMHO.....

 

1.  The  boyfriend is not going to stay working because child support for three kids is being deducted and so he would rather quit than "work for nothing"...he does not see those kids as his financial obligation...I hear it all the time..

 

2.  She is not going to leave him....he will probably leave her....look at his track record....

 

3.  If she only has one child and is living with mom and dad she could probably get assistance IF he was not in the household...they may be eligible for foodstamps and some PRC

 

4.  She could probably get more assistance IF she got her own place....even if she worked part time she could probably get some cash assistance, rent subsidy, and child care assistance....

 

5.  Her assistance would not stop if she was in school.....don't know if she can get financial aid if she has a bankruptcy but I doubt it...

 

6.  If you can get her to agree, and you need the additional help and can afford it, give her more hours and/or a raise.....BUT on the condition that she agree to a voluntary payroll deduction each pay period (MAKE SURE YOU PUT IT IN WRITING AND SHE SIGNS THE AGREEMENT) that goes directly to her creditors......you track the money and send the payments for her....she has to work out a budget with you to determine how much to send...most creditors will work with her if she is making progress.....

 

7.  Don't give her a raise or more hours and expect her to manage that income any better than she has in the past....hence, the payroll deduction option above....

 

8.  Think about it...she has no assets to speak of.....and her credit is probably already bad.... so...filing bankruptsy is probably not going to help or harm her much....the bigger lesson for her is that she has a financial obligation that she can fulfill if she really wants to....

 

9.  NIce of you to want to help but don't get sucked into her problems....if you want to help her, then help her to identify the problem, get her to develop alternative solutions and choose a course of action...small steps to help her confidence grow....make it all her doing....just guide the process.

 

10.  Don't take it personally, and don't be surprised, if she chooses to do nothing....she has no motivation to do anything.....really.

Veteran Contributor

Re: Bankruptcy at 26

Several points have been made.  The girl has worked for me since the middle of August.  She milks cows with me, so I spend several hours a day working with her.  Giving a raise at this point and in this situation, isn't going to happen.  I don't see it as a long term job.  I think as soon as the snow flies, she will quit if not before.  I don't think it would matter how much she made per hour, it would be gone thanks to the boyfriend.  She is a good employee, but not one of those "exceptional" ones that you would do anything to keep. 

 

I agree with Kay about not giving financial advice.  In no way am I telling her what to do.  She talked to me about it and has talked a lot about her situation.  Maybe it can get construed as financial advice, but my intention is ot get her to think about the long term afftect of filing.  Bankruptcy is a short term fix, but long term baggage.  I don't give loans, and rarely advances.  I will suggest where to get help, but will not  pull my pocketbook out for an employee.  I differ from you on this Kay.  I won't contact my lawyer and spend money that I can't recoop if they are gone tomorrow.  I don't want to be that involved in the situation.  I have done all that I am willing to do by suggesting agencies to contact for help before giving in to bankruptcy. 

 

I was just wondering how others looked at filing bankruptcy on a small amount of money.  I am sure it looks like a mountain to her, but I would trade my debt for hers anyday.

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Senior Contributor

Re: Bankruptcy at 26

Maybe she doesn't know all of the agencies that are available to a person like her? Telling her that there are other avenues than bankruptcy is great of you. Most employers or managers will not. They don't get involved in their employers lives at all.

There will be a lot of paperwork for you if the collection agency garnishes her wages. Do you have the time for that?

Have to agree that the boyfriends antics of "love them and leave them" are a bad influence on her life. Many times a person has to walk that life to realize its consequences. They are gullible until a light bulb goes on.

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Highlighted
Veteran Contributor

Re: Bankruptcy at 26

Your first clue is that her parents are also in financial difficulties. She has learned at the knee of experts. I'm betting the heart attack was just the final straw for' them, not a singular event. The old adage, "you can't get blood out of a turnip" is appropriate here. She doesn't have to declare banko, no one will get more than 25% of her paycheck at a time and she SHOULD pay her debts. The blood sucking boyfriend needs to be kicked to the curb, as there is no motivation to go get a job when he is being taken care of. You can get a decent job without going to school, if she was that organized, she wouldn't be out of highschool for 8 years and not have made a  move in that direction already. She doesn't need more debt right now. Online courses at night can show her how much work it would be in addition to a fulltime job or two. In 6 weeks she can be a CNA, they pay at least $12/hr, so in 1,000 hours she wouldu be debt free theoretically.  It can be done. Her parents can help with childcare and insist the boyfriend hits the bricks. He no doubt has parents too, that can take him in.

But, I don't think any of this will happen. I go after people like this all the time. It doesn't matter if the economy is in good shape or not, there are deadbeats everywhere all the time due to poor decision making and lack of good upbringing. Financial responsibility is a  learned skill, and this girl obviously was not taught that your word is your bond, and you can't have everything. . A judgment is good for 20 years, she will be dealing with this for a long long time. She better get started.  The cellphone bill says it all. Her priorities are all messed up.

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Honored Advisor

Re: Bankruptcy at 26

Okay, I didn't k ow she was such a short term employee...I was talking more about someone who you have known as a good worker for quite some time. I think this one is talking her problems to you because she thinks she can reach I to your pocket to try and solve them.

I have taken a couple of people to my attorneys in the past, and it was worth what little I spent. One didn't even charge me for the time or documents he drafted for the person I was trying to help, the widower of a very desr friend. He had been truly victimized by his own son and a spendthrift woman wh had suckered him.

This girl has been watching her parents, as Rusty says, and learning bytheir example. I think you have her pegged, better tpicture emerges of that this post. Keeps your hands- and hers- out of your pocketbook. She didn't get into this mess since August, and so all you are morally required to do is pay her for the time she works, and remind her that bankruptcy isn't all it's cracked up to be.
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Honored Advisor

Re: Bankruptcy at 26

After reading the second post about thie brevity of the work relationship, I have altered my idea about consulting an attorney...I woild save that for someone I had known longer and better. I would bet a dollar - if I better money, which I do not - I would bet you can find a website that explains bankruptcy and judgments in your state.

Bankruptcy has significant costs associated with it, for the lawyer who files. This girl probably doesn't have access to enough money to get it done...and, they won't file unless they are paid. She will also be stuck with that as her " spent" trump card for seven years, at a minimum.

I wouldn't lose any sleep over it. She made this bed, so ought to lie in it.
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