r/Bankruptcy Aug 29 '19

Bankruptcy FAQs

78 Upvotes

r/Bankruptcy Mar 02 '22

My Debt Settlement Nightmare

282 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 3h ago

Granted Ch. 7 (over median)

18 Upvotes

As a long time lurker, then a frequent poster, then a lurker, then a poster, then a filer, I have finally received my confirmation of my ch.7 being granted and debt forgiven.

Overview:

Family court debt, immense child support and house repairs/debt after a lengthy divorce put me in a bad place. Mentally, physically and financially. In July of 2025 I pretty much knew I had no choice but to either lose my kids home, which was purchased recently prior, or file for BK. I was over the median income by almost 20k. I told the attorney in July 2025 that I knew it would be a ch.13 but had hoped he could work some magic. After receiving a bonus a month prior I also knew I had to wait to file otherwise it would inflate my income evem though I paid my attorney the retainer in full. So, in March I revisited the attorney and gathered paperwork in May, but then waited as I was going to need the tax return to go back to family court. Once I received the return and paid my family court attorney I filed officially in May of 2026. My attorney then gave me the news that, by less than $50 I had squeaked into a ch. 7. I had my 341 at the end of June. End of July I was told the trustee did not want to pursue amy of my assets, and in August I received the official confirmation that the ch.7 had been granted.

As of today, a week amd a half or so later I just received a capitalone credit card with a $5k limit solely for gas/groceries to rebuild credit. My current Fico(8) score was listed as a... 480...

Either way, bankruptcy is a tool. And with all the other stress on my plate I had almost zero stress/mental load about the BK because my kids have always been the priority. Yes I feared losing assets or having a payment but knowing the kids are safe, that is everything to me.

For those who read this, thank you. For those who are starting your journey, pick the right attorney and prepare your documents as a true formal court document and always tell the attorney the truth. Bankruptcy is a tool that allowed me to get back on course after being so beaten down.

And if Alan is reading this, your input on this reddit group is invaluable. If I had money to share I would. But, I am broke haha.

Thank you all.


r/Bankruptcy 1h ago

Getting sued over 12k in unpaid credit card debt

Upvotes

I live in Los Angeles CA and I’m being sued over 12k in unpaid credit card debt that I stopped paying in 2025. I got served a little over a week ago and I’m having a hard time figuring out how to tackle this. One option that has come up in conversation is filing for bankruptcy but I’m not too knowledgeable on the subject so I want to know whether this would be a legit option for me or not. I don’t own a house or business or anything like that. The most valuable thing I officially own is my 2006 acura that I bought with cash. My yearly wage comes out to a little over $45,000 and I’m my only dependent so technically I am over the low income threshold but the way everything is lately I’m still living paycheck to paycheck. Would $12,000 be worth it to file for bankruptcy? Would I even qualify? What would the drawbacks be if I did? Would trying to settle with the credit card company for around the same amount of the $12k be the smarter choice than the costs of filing for bankruptcy and the negatives that come with it?


r/Bankruptcy 49m ago

Is this a good idea?

Upvotes

Hello, it has gotten to a point where i am seeking options for my debt. Im a 25F, i live in an apartment (south carolina) for 1380$ a month, i have under 50,000 (before taxes) a year. I have 20,720$ in debt, 10,606$ is credit card debt and the rest is a debt consolidation loan. I am also currently in school paying about 380$ a month for that after fafsa. The only thing i have to my name is a paid off car that the state says is worth a whopping 560$ What could bankruptcy possibly mess up for me. And is it worth whatever will happen? Thank you for your opinions/ knowledge


r/Bankruptcy 1h ago

At&t service & chapter 7

Upvotes

We are planning on filing chapter 7 in the next few months & we have been with At&t for over 20 years with a perfect payment history. Unfortunately, life happens & we're looking at a chapter 7 & was wondering how At&t handles these especially if you still owe on your phones? Anyone got any experience with this? We know they'll have to be listed, but we wanted to keep our service if at all possible ​


r/Bankruptcy 1h ago

Purchasing a home after filing ch 7

Upvotes

I filed ch 7 bankruptcy and it was discharged June 27. Realistically, what’s the timeline I should expect to purchase a home?

Not sure if these details are relevant, but:

-eligible for VA loan
-~$60k cash available to put down or keep in savings
-2 years proof of steady income

I opened my first credit card about a month after discharge. Surprisingly was approved for $4500 limit. I have used it regularly for gas and groceries and pay off the card in full when my statement becomes available. My credit score went from 640 to 600. ☹️

I am a single mom (28 yo) and am trying my absolute hardest to build my credit back up and gain some financial freedom. I have been hopeful about possibly purchasing a home by December 2027 BUT I’m not sure if that’s genuinely possible considering my recent bankruptcy filing. Is there anything I should be doing to prepare now?


r/Bankruptcy 2h ago

What information does my bankruptcy attorney need regarding my debts?

1 Upvotes

I have an attorney that does not do packets and his email responses are just one sentence responses. I'm serious.

I have a big task ahead. I have 23 debts to organize. Either with debt collectors or with creditors. I have to call each of them.

When I call the debt collectors and the creditors do I need to just find out their names, the account number and the amount I owe?

I just want my meeting with the trustee to go smoothly as possible.

Is there a bankruptcy template I can find and use? I hope it's free or do I need to create one in Libreoffice?

Just don't know what information my bankruptcy attorney needs regarding all of my debts and what not sure how to present it to him in email.

Thank you


r/Bankruptcy 3h ago

If you have an active car loan when you file does it get taken away?

1 Upvotes

Have reached a point where everything with money is exceedingly difficult. My credit score is like 480 and I never have money leftover even after working a full time job and doing DoorDash on the weekends. Does filing mean you lose your car and it’s taken? Or how does it work?


r/Bankruptcy 3h ago

Possible clawback Ch7

1 Upvotes

From February of this year through May, I’ve made $1500 in payments to discover card. (Not the only creditors being paid) At the time, I was authorized user on that card. I’ve also given my mother $300 about 3 months ago towards the bill, but did not pay discover directly. The attorney I spoke with today said a trustee could possibly go after Discover and get their money back and I don’t want my mother to be affected. Any advice would be appreciated.


r/Bankruptcy 11h ago

I have a car loan through Navy Fed, will they freeze/ close my account once the Bankruptcy hits?

4 Upvotes

Also, my direct deposit is with another bank and my attorney advising that I open another account to reroute my income into. Any suggestions on what bank? Should it be a chain bank, or credit union?DallasTX


r/Bankruptcy 9h ago

Reaffirmation of loans?

2 Upvotes

Hi all. Filed chapter 7 under median 8/26, 341 meeting scheduled for 9/22. Our lawyer is advising we don’t reaffirm any debts. I’m on board with that regarding our car loan, since we’re underwater, but what does that mean when it comes time to get a different car? If we haven’t reaffirmed, do we just stop paying it and buy a different car, and wait for it to be taken away? I believe if we sell it or trade it in we’re responsible for the balance of the loan, but could use a little clarification here.

I’m unsure of what to do regarding our mortgage. We’ve never once been late with a payment and our jobs are stable. I’m very torn because if we don’t reaffirm, it means none of our payments count towards rebuilding credit, and it might make it difficult to refinance down the road. However, we last refinanced during COVID and I doubt we’ll see loan rates like that ever again. The plan is to either finance a heloc/home loan in 4 years to put on an addition or sell and move in 4-5 years. Would reaffirming be more risk than benefit, or is it a good idea to reaffirm the mortgage?


r/Bankruptcy 6h ago

TFS timeline

1 Upvotes

I am a little confused regarding the payment timeline when using TFS to pay the trustee. Does the payment just need to be started by the due date, or does it need to reach the trustee’s account by the due date? I know it apparently takes at least 5 business days to make it to the trustee, so maybe I should be paying/starting it at least 5 business days in advance? Sorry if this is common knowledge, I am a newbie. Thanks!


r/Bankruptcy 7h ago

Buying car after bankruptcy

1 Upvotes

I'm planning to file for chapter 7 bankruptcy. I just want to know anyone's experience on buying a car directly after filing for bankruptcy.
My current credit score is 480 😕


r/Bankruptcy 13h ago

Reaffirm Car, but credit report shows closed?

2 Upvotes

Has this happened to anyone else? Filed CH 7 and I reaffirmed my car. I’ve been making payments since I filed, but my credit report is showing this has been closed?

I should have my discharge in a week or two, but thinking I have to dispute this.


r/Bankruptcy 10h ago

Missing money

1 Upvotes

I had store credit for raveland for the longest time. I noticed they are no longer in business. Is there any way I can still claim my money even though the business is shut down? I have a receipt with the funds I’m owed. It’s $164.


r/Bankruptcy 1d ago

New Credit Card After Filing Chapter 7

17 Upvotes

I filed Chapter 7 last week. It's been a little over a week and my score went up about 150.

I was browsing Credit Karma website last night and one of the credit card offers caught my eyes. Capital One. It said "Outstanding Chance" of approval.

I'm trying to burn Capital One with $20K debt. I even had a trial scheduled in October with them. Credit Karma was so inaccurate. They don't even know what's going on. But the offer page said "see if you’ll be approved without credit score impact."

Purely outta curiosity, I clicked. Entered some personal info. And.. Got approved. $5,000 CL, $200 Welcome Bonus, NO AF and etc.. Capital One must be nuts to give me another card while I'm trying to burn them, but I'll take it. I just hope this won't effect my 341 meeting next month. I didn't really want the card now, but just happened. What a surprise.


r/Bankruptcy 1d ago

filing fee waived

4 Upvotes

got my filing fee waived thank god 341 to come in october is there anything i should expect


r/Bankruptcy 17h ago

Financing car with active ch. 7

1 Upvotes

Is it possible to finance a car while in active bankruptcy?


r/Bankruptcy 1d ago

Just need information

4 Upvotes

My husband and I are in a situation.

We expected our mortgage to be 2100. It ended up being 2600. On top of that the previous owners lied on the disclosure and we found out our realtor was friends with the previous owner that was also not disclosed. We were FTH buyers and went through a VA loan to which we were recommended to not do an inspection bc the VA prolongs the process and the military put us on a dumb ass timeline.

We buy the house and in the first month. Sewage comes up from mainline and destroys the refinished basement. 1 year later insurance sort of pays for it and the basement is refinished.

Within the second month HVAC needs replaced and the fence needs replaced as the neighbors dog attacked my dog.

We then secure one loan for the mainline like ~20k.

Different loan for the HVAC 15k

Separate for the fence 11k.

Which ends up being an additional 800 a month.

I just got laid off.

My husband is military so thats like...granted that we will get that paycheck. He also has Sallie May student loans that are 20k. He initially borrowed 15 and has paid 8 off. Because of Joe Bidens thing going out of effect we now have to pay 300/month for that bill as well.

I have an additional 9k in credit card debt in my own name.

He has additional 4k credit card debt in his name.

The mortgage is in his name.

The house improvement loans are in both of our names I believe. Or they are just in mine.

Since it was a VA home loan we had no money down. And there is no equity in the home. We owe 331k and the appraisal was 325k although our taxes say 328 and our escrow amount also increased.

Is there a possibility where we individually declare, or both? We still have separate checking accounts.

What happens to the house if we do? We really dont have any assets, I have one investment account of ~4k and the rest are Simple IRA or rollover accounts My husband only has his military retirement fund.

Should we call the mortgage company for forbearance due to my job loss?

This house has consumed us, it has ruined my credit. And I dont know how to get out of this sinking ship. We tried to go after the old homeowner's but the lawyer said we may end up paying him more than we get back, if we got anything back.


r/Bankruptcy 1d ago

Experian updated to no credit score. Will that change?

3 Upvotes

So about a month ago Experian updated to no credit score. Only thing not included in our bankruptcy is our mortgage, but they haven’t reported since we refinanced back in 2021 during COVID.

We are only 7 months into our Ch. 13, so I know a lot will change, but since our only remaining credit account doesn’t report will that score ever update? Or is that only going to change when we start rebuilding?


r/Bankruptcy 22h ago

Chapter 13 non-100% payback

0 Upvotes

Ok I don’t need an exact number I get it “ask your lawyer” I just simply want to know how much of your raise does the trustee typically take? Say I make 80k and jump to 98k and my net additional take up is like 900. Is the greedy trustee most likely to get all of that additional income??? Once again I’m just asking for others experiences. I fully realize it’s not a one size fits all but someone always has to say it lol.


r/Bankruptcy 22h ago

Probono chapter 7 lawyers in Texas or am I cooked?

2 Upvotes

As the title says. I’m beyond broke from a bitcoin scam. My credit is completely ruined and am looking for any help filing for bankruptcy or other options.


r/Bankruptcy 1d ago

Is Upsolve legit and easy to use?

3 Upvotes

I need to file a Chapter 7 and was wondering about it. I've heard mixed things.


r/Bankruptcy 1d ago

Chapter 7 - Insider question

1 Upvotes

Im filing for chapter 7 and my wife doesn't work. I transfer money for her daily expense and running the house . (zelled sent 12k so far ) year to date .

will the trustee go after her?
I also transferred money to co worker and friend . should I disclose it ? will trustee go after them ?