[Lillygirl]

HI,

My husband and I are planning on adopting, we have the agency all picked out and actually have our application accepted. But, before we send in our first agency fee we have a question.

After 911 my husbands job went belly up for a while (it is a chemical plant, not so popular then) and we had just purchased our home. We had no money, no equity. so the bills just kept piling up. We paid the mortgage and car (late some) but the rest of the stuff we just couldnt pay. Well, 3 yrs later we are finally back to normal. BUT our credit is history! We have no choice but to file bankruptcy. There is no way we could EVER catch up after that long..

My question. I know they say they dont run credit checks, but do they ask about bankruptcy? Should we file bankruptcy before we start all the homestudy and all.. then wait a few months?? or should we do all the stuff then went its all over, file bankruptcy??

What do you think? Any opinions on what the agencies or homestudy folks will say??

Thanks,
Lilly

[crathke]

Speaking as someone who has worked in consumer credit for 21 years, I think you actually have two issues at play here.

Firstly, have you consulted a bankruptcy attorney about your situation? I got somewhat of a mixed message from your original post. If, after three years, "everything is back to normal", then personally I advise against filing backruptcy. Are you still trying to pay on those accounts? Receiving collections calls and letters? Or have the accounts been charged off by the original creditors and what is remaining is the adverse record on your credit history?

If it is the former, and you are still being contacted by your creditors, and if you cannot work out a repayment plan with each one individually (many will forgive late fees and even interest..and in some cases will report you as "current" to the credit bureaus if you honor any payment arrangements you make)..and if a Consumer Credit Counseling Service (an organization who makes those arrangements for you; you pay the CCCS and they disburse payments to each creditor on your behalf) , then bankruptcy is a consideration. However, I would stringly urge you to consider the other two options I have presented first.

If it is the latter--the accounts have been charged off by the creditors and you are not receiving calls or letters...then bankruptcy will not help....not for the purpose you are considering.

Personally, and based on my experience in the lending field, bankruptcy nearly never "helps"--it only makes things worse. If you were to go with one of the first two options--working things out with each creditor individually or working with a service--eventually the credit history will turn itself around on its own and within 3-5 years you'll be back where you "should" be. A bankruptcy will remain on your credit file for 7 years and on court filings for up to 10. The presence of the filing on your credit history will depress your credit score and make it difficult for you to qualify for "prime" rates until such a time as it "falls off" the record.

Now--as to how that impacts an adoption? Well, one of the things some agencies look for is the ability to financially care for a child. At the time of our adoption, my company was in shutdown mode and I wasn't certain if/where/when I would be working by the time our process was complete. In our case, my husband earned enough to satisfy the financial requirements. I don't believe our agency even asked about bankruptcy--we brought up to them the fact that my employer was dissolving our division.

However, I would strongly suggest that you be completely honest with both your agency and your social worker regardless of the decision you make regarding your finances. Hiding any detail could raise other red flags about you that don't need to be raised.

[orphanagemom]

Hi,
We have a wonderful friend who owns a law office that helps people clear up their credit, expecially when something like that happens. He is a lawyer, and is in Salt Lake City, Utah. You can pm me if you'd like the name and number of his business. I'm sure they can tell you exactly what to do.

[Lillygirl]

well..
Most of the stuff has been charged off. Some have not, some call. I at first tried to work with them, They were not at all helpful. So, we did what I suppose we shouldnt have.. gave up. Then it just snowballed.

I guess my problem is if I did sit down to repay all the debts, It would take years?

our credit score is about about 500. Not so good. With the addition of a child (we have 2 bio kids) we will be needing a larger car, which we wont be able to get financed. So that is a major concern. We have been trying to save up the money for the adoption, because there is no way we will get loans to pay for it. SO we are in between a rock and a hard place.

YEAH I suppose we should give up the idea of adoption and use the money we are trying to save up to pay off those creditors. But, honestly I cant imagine us ever saving or being able to pay that much.



I had looked into credit repair.. We cannot afford to have an attorney do it for us. I know they say you can do it yourself?

We are torn on that issue?? I say its the same as filing bankruptcy, my husband says its illegal?

We just dont know which way to turn..

Its made us so mad since all the intrest rates have been so low, and if we could have refincanced our home, we could have had plenty of extra money to pay off the bills.. Its one of those ironic things.. If we had good credit, we could lower our payment, but since we do not, we cannot lower our payments so we can afford those bills???

Just totally confused on which way to go.

Lilly

[sak9645]

... that advertise "credit repair" are, themselves, out to get your money. Stay away from them. There really is no way to repair your credit, except for paying off your debts and staying free of further financial problems for a few years. Filing for bankruptcy protection does NOT help most overextended people, and should be considered only as a last resort.

A reputable financial counselor, on the other hand, can work with creditors to come up with a "doable" payment plan -- and can help you set up a monthly budget, which will help you meet those payments, pay ongoing living expenses, and plan for the future. Unfortunately, he/she will probably tell you that it may be very difficult for you to add the cost of a bigger car -- or an adoption -- at this time. You simply cannot afford them for a while. You may also have to cut back on some of the things you currently think you can't live without, like cable TV.

It is often easy to focus only on the costs of the adoption process. But, as you have already learned, I'm sure, it is not cheap to raise children, once you have them. They seem to grow out of shoes and clothes as soon as you buy them, they need braces or break their arm or get diagnosed with a learning disability at the most inopportune time, and they can't participate in sports or other after-school activities without all kinds of expensive gear. And children seem to be awfully good at manipulating their parents into buying them lots of "things" for birthdays, Christmas/Chanukah, or no special occasion at all. After all, you're just not chic if you don't have a karaoke machine or the latest Nintendo device. Right?

I know this sounds harsh. But do understand that the adoption clock does not work like the biological one. You didn't state your age, but people who wouldn't consider trying to conceive a child at 40 are considered "young" by the standards of international adoption. Many families adopt infants well into their late 40s and young toddlers or preschoolers well into their 50s. I'm 58 and single, and I have an 8 year old daughter. I was 51, and she was 18.5 months old, when I adopted her from China. We're doing great, and I feel far younger than my years. The child of your dreams could very well be waiting for you a few years down the road, when you are operating on a sound financial footing.

I want to reiterate that, if you do set up a payment plan with creditors, you will need to have and live within a very strict budget, so you don't wind up incurring more credit card debt and such, while you struggle to pay your bills and become creditworthy. The first thing you will need to do is to throw away your credit cards, if they haven't already been closed, and operate exclusively on a cash basis. (You may want to keep one in a drawer somewhere, just for emergencies -- defined as ONLY things like an unexpected dental or medical expense). It will be hard. Our society makes it so easy to get credit cards and to rack up debts, without thinking of things like the fact that people no longer keep their jobs for their entire working life, and may well find themselves unemployed for six months or more.

You will find that, having gotten your financial house in order, you will be attractive to good agencies that might now turn you down. You will also find that you, yourself, will feel more confident as you pursue the adoption of a third child.

Best wishes to you.

Sharon

[crathke]

The thing about organizations which promote "credit repair" or show you how to "do it yourself" is that they aren't very successful. In a nutshell, what they do is take advantage of a loophole in the Fair Credit Reporting Act which allows consumers to "dispute" the information being reported; once you pay these folks their "fee", they basically dispute *everything* on your report. The theory is that they bombard the creditors with disputes that the creditors cannot possibly investigate and respond to within the 30-day time frame alloted them in the FCRA. If the creditor doesn't respond, the credit bureau has to assume that the dispute was valid and remove any derogatory information.

The trouble with that is that it's basically a fraudulent action. In addition, most creditors are on to these organizations and will respond to *any* mail received by them with a "verified as reported" response--which means the organization will come back to you, the consumer, and say "well, we need to refile, and that's going to be another..." $25, 50, 100, whatever. So they make tons of money, the creditors are all (even more) annoyed and you get nowhere.

Additionally, working with an accredited credit counseling service does *not* impact your credit score (it used to, but that has changed in the last year or so)--in fact, if you hook up with a good one and maintain your payment plan, you can be reported as "paid as agreed" on your credit report, and every month that goes by with that standing will positively impact your credit score. Will it take years? Probably. However, as I mentioned before, many creditors will "forgive" (cancel out) late fees, overlimit fees, and/or interest charges in an effort to recoup the principal amount of the debt owed. When you're paying 10, 15, 20% (or more) on a credit card, having the interest forgiven can shave *years* off that repayment plan. And, living within the plan will also give you the opportunity to start rebuilding your savings--which will in turn (as Sharon mentioned) make you more attractive to an agency.

FWIW, my husband and I completed our adoption a year ago in January. I am 41 and he is 43. So, again, Sharon has a *very* valid point in that adoption makes it much easier for "older" parents to fulfill their dreams of adding to their family. Best of luck to you!

[orphanagemom]

Wow! Let me rephrase my post a bit. The law firm I'm talking about does't do "credit repair", but they go in and get credit agencies to realize when they have misrepresented someone's finances. There is a certain amount of work that agencies are supposed to do - to make sure they have the right info, and it takes time, and they simply don't want to do it, or pay to have it done, so they just go after the wrong person, or submit the wrong info. on a persons credit report. Or, if it is just a case of being on the edge of bankruptcy they have counselors and finance experts to help figure out budgets. Yes, you can do this on your own, but in many cases it is extremely difficult! A great many people in this world could use the advice of a good budget. Have a good one!
Jen

[Lillygirl]

Well, I do agree with getting thigsn in order. and I am in no RUSH to adopt in that respect. Although I am no spring chicken here. Im 42.

I will figure out what to do and get my life in order. Im sure we can dig out of this mess somehow.

Thanks,
Lilly