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Va Pay And Bankruptcy -- Negotiating With Creditors And Exemption

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I've fallen on hard times and am unf. considering bankruptcy. I'm trying to negotiate with my credit card companies but they're....ugh. If I do have to file for bankruptcy, can they take away any of my VA pay? All or some from my monthly deposit? Or any future retro VA pay? I'm total and permanent at 100% and require no more exams. If my VA pay is exempt, I'd like to use that as a way to negotiate better terms so I can pay my debts and not file. I don't own anything or have any savings..it's just the VA monthly pay..I'm trying to see if that puts me a better position to negotiate the terms.

Any advice or stories would be greatly appreciated. Thanks!

Semper Fi

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You won't lose VA benefits and if you want to pay them back then file Chapter 13 Bankruptcy and that way you can pay your debts back over time and your creditors will no longer bother you.

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No one can attach your VA Compensation. Not even the IRS even though in recent years they have tried. They lost every time in court. I know a man who the IRS seized his bank account.

The judge made the IRS return the money as his VA compensation check was deposited and comingled with his money. The IRS was pissed!

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In your situation, ulnless you owe a few thousand, it would be better to go Ch-7 and get it out of the way......no one can touch your VA unless you have child support, but you will get dinged on your credit report trying to go this route about as much as just throwing in the towel and starting fresh.

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Yah, JR is right. Your late payments on your credit cards will still show up for 7 years. And even after you negotiate with them, they will list it as a "charge off", which ruins your credit and stays for 7 years.

In most cases, it is best to file chapter 7 bankruptcy and get everything discharged completely. Within 2 years after the bankruptcy, you can have A rated credit again. Just get a secured card or one card and use it to buy gas every month, and pay it off in full every month. Capital One has a secured card available. Setup auto pay so you don't have to even think about it.

A good rule of thumb is if all your credit card debts equal your annual income then you should file Ch. 7

Save your money for a bankruptcy lawyer. They charge 1,000 to 2,000.

Edited by NavyWife
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A friend of mine filed bankruptcy. He said if he had to do it over again he would not. It did not help all that much.

Instead either YOU or a Credit counseling service can negotiate down principal and interest. Go with a service such as the Catholic or Lutheran, not one of those guys on the phone or online..which are often scams. GO to their office, dont fill out junk online giving out private information to people you dont know. BOth of these churches used to have credit counseling services. A quick google search shows both of these services still operating in my city, dont know about yours. You could at least talk to them before filing bankruptcy, as, of course, I dont know how bad it is for you.

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