So I’m considering filing for bankruptcy?
So I’m considering filing for bankruptcy. Currently about 40K in debt, not including a house I purchased for a close family member but I don’t stay in. Tried to keep keep head above water but string after string of bad breaks has left me thinking there is no alternative. What could I expect if I do declare? would I qualify for bankruptcy? Would my financial situation be destroyed by doing this?
Posted December 4th, 2009 in Bankruptcy Q and A. Tagged: bad breaks, family member, filing for bankruptcy, financial situation, head above water.
Your credit will be shot but its not the end of the world. There are 2 ways to file for bankruptcy chapter 11 and chapter 13 , one way is wiping out your debt completly and the other is basically paying a small percentage of your debt back and having it all wiped out. I hope that you realize that if you do apply for loans or credit cards in the future you will be charged the highest possible interest rates or you will have to have secured credit cards where you will have to pay up front and establish credit all over again. My husband and I filed in 2004 and in 2005 we purchased a brand new Kia Sedona so life after bankruptcy is possilbe. However you will be treated differently by banks and creditors and insurance companies as a bad borrower. So even if you have the best driving record they go according to your credit score. I wish you the best of luck its a hard decision to make. Its not something we are proud of but we were able to keep our home until we sold it we were in over our heads as well.
December 4th, 2009 at 11:48 pmTry it, it maybe cool for you.
December 4th, 2009 at 11:48 pmYou won’t be able to buy a house until it clears your record, 7 years I think. You couldn’t get any emergency loans. But all your debt would be gone you have to weigh it out, Your credit is probably already bad, if it isn’t credit would get the lowest. It takes a while for them to take a house back, they would take it back though. If you have a loan on a car they would take the car back. You would need to call a lawyer or someone that understands the small writing.
December 4th, 2009 at 11:48 pmA good attorney can manage to keep the home and the cars in your possession. It will hurt your credit for about 7 to 10 years. If you keep you history spotless after the bankruptcy you can rebuild your credit.
You will go to court and anyone who you owe money to may send a representative to negotiate payments or pay-off settlements. Many times, however, nobody shows up and you just sign the papers. The cost will depend on how much your attorney has to do to reach our creditors and negotiate. It can be anywhere from $2000 to $7500 or more if you have a lot of assets and business matters.
December 4th, 2009 at 11:48 pm40 is pretty deep, it sounds like it might be an option for you. it really isn’t so bad, when i got married my husband had alot of debt and we decied to file. then right after 2 years we were able to buy our home and a car. it is the 2 years of building up your credit that kinda sucks. but it does feel good when the 40k isn’t hanging over your head anymore.
December 4th, 2009 at 11:48 pmI just got out of bankrupcty. The only way you will know if you qualify is to find a professional, knowledgeable attorney for a consultation.
December 4th, 2009 at 11:48 pmWhen I filed, I was in debt about $12,000 and because my name was listed on a deed, I had to get my name off the deed and wait for a year before I could file.
When I did file, I was not able to wipe out my debt completely. I had to make a $350 a month payment, which has been garnished from my paychecks.
To say that my financial situation was destroyed, well, not completely, but bankrupcty certainly has put a crimp in things. I’ve applied for jobs over the past 3 years and I know that employers can run credit checks, so I can’t help thinking that bankruptcy has hurt me in job hunting.
Also, when I applied for credit to get a new couch, I couldn’t get the special deal the furniture store was offering. Just recently someone got a hold of my debit card info. and I checked my credit score and it wasn’t the worst score, but it wasn’t really high either. My score is 662 ~ (850 is the highest and 350 is the lowest)
My best advice is to seek out a lawyer that you trust and talk to that attorney about your situation.
I do remember that not long after I filed for bankruptcy, the federal goverment changed the laws regarding filing for bankruptcy and made it tougher for people to file.
So, I don’t know if I’ve completely answered your questions, but my best advice – talk to a lawyer. And good luck to you. It’s a tough choice to make and the day I filed, I cried. Tomorrow is my first paycheck with no garnishments, so I’ll be doing the dance of joy tomorrow! lol
I would talk to a loan consolidator first. I’m sorry you had a string of bad luck but it’s also not fair to the people you owe money to to just file bankruptcy. 7 to 10 years is a LONG time to rebuild credit. In that time will you have kids needing to go to college, etc? If so, think about what this will do for their chances of getting college loans, etc. There’s a show called Maxed Out where someone comes in a shadows someone to see how they are spending their money and how they reached their debt level. There are always ways for their to consolidate and cut their expenses (or in some cases make more money) in lieu of filing for bankruptcy. Some of the strategies they come up with are very ingenious and save the person in the end.
December 4th, 2009 at 11:48 pmThere are other options out there. Bankruptcy will follow you forever. When you apply for any future loans/mortgages there is a check box that you must check if you have *ever* filed bankruptcy, even if it is off your credit report. If you do not check the box and you are guilty of fraud which is a felony offense.
In October 2006, I was $46k in debt, not including mortgage, and no money in the bank. I was living from paycheck to paycheck. I read Dave Ramsey’s books, Financial Peace and The Total Money Makeover, then enrolled in Financial Peace University. Today I have a $1,000 emergency fund and only $35k in debt. Not only do I see the light at the end of the tunnel, but I am no longer stressed out by my finances.
Call Dave Ramsey’s office and see what other options you have. 615-371-8881
December 4th, 2009 at 11:48 pm