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Contributor

Filing Bankruptcy Help. I've been struggling financially since discharged in 2011. Finally started seeing sunshine after VA Compensation. Then Military Star Card garneshed federal income tax and couldn't afford to pay off small debts to build up to pay off the star card, 2014 was able to start gathering a potential payment option for star card and they are now going to garnish my pay check which would make my pay below levels, that I couldn't even pay my other creditors. I talked to them and they said that once garnishments start they won't be taken off until paid in full. I will be struggling for a long time at this rate. Should I file Bankruptcy?

5 REPLIES

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Laws for bankruptcy are different in every state so it will depend on what state you are living in now.

 

There are different types of bankruptcy and without knowing the full specifics of your situation you may be a good candidate for a full bankruptcy discharge but I highly recommend you talk to a professional. Check with your states Attorney General website to see if they have any links to a good service that can take a look and point you in the right direction.

 

After bankruptcy you want to manage your money wisely which sounds like you are working on it.

 

The garnishments already being in place may hold the bankruptcy though. Which is why I recommend you talk to someone for legal advice concerning filing. It will cost you money, even if you do a kind of do it yourself bankruptcy because there is court fees and other documents you will need to send that cost money if you do the bankruptcy yourself using legalzoom.com.

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Reading your story, it sounds like the exact situation I experienced. I struggled financially, truck got repossessed, and star garnished my income taxes last year. I filed chapter 7 bankruptcy in May and it was discharged in October 2014. This year I received all of my income taxes. Star card is not considered a government debt in bankruptcy, it is considered a unsecured debt and will be discharged. Without filing chapter 7 star card and continue to garnish your taxes and pay. I am living proof!
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Hi Allen,j,

I encourage you to contact our team of Financial Advisors here at USAA who can give you advice based on your specific situation and needs. They can be reached at 800-771-9960. Good luck!

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I will pray for you bankruptcy was very difficult in 95 and has been a big mistake in my past. Was advised I should have just divided what I had kept consistently paying all I could with smaller payments and contacting all for help. Gradually debts would be forgiven or repaid.
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Bankruptcy is a tough decision that will carry financial consequences for at least 10 years.  It should be the nuclear option when all else has failed.  I would first recommend contacting a local American Consumer Credit Counseling Service who can provide advise on your specific financial status.