Newbie Interested in Opinions on Filing BK

Speaking as one who has filed bk, I can tell you that bk is not about morals or ethics but, just a business decision. At the end of the day, we're all good capitalists and will act in a manner we perceive to be in our best interest.
If you feel your best interest is to be unencumbered and have a fresh start, you'll file. If you feel you're better off spending decades paying back debts at high interest rates then, don't file.
There are 2 very good bk forums out there.
The one at www.creditboards.com and, www.bankruptcyforum.com are both active and have attorney's that post daily.

 

You should go with an attorney that makes you feel comfortable. Asfar as being ineligible for bankruptcy, it is possible that attorney did a detailed means test anaylsis for you in his office. Could also mean he just spent 10 seconds looking at check stubs and figured it out in his head. Only you know which attorney spent more time with you.

A good BK attorney will consider all options for you. Sometimes its not the best option, sometimes it is.

 

Before filing a petition consider applying for some new cards with low balance transfer rates. Even Bank of America's "clean sweep" would be an option if only to consolidate. Please bear in mind I don't know your FICO scores but this may or may not be an option.

Please also be advised that you typically cannot discharge your student loans unless they are determined to pose an extreme hardship.

If you cannot transfer any of these credit cards and your car loan isn't any longer feasible, then file. Your ultimate goal of home ownership will have to wait at least 2 years thereafter if you require 100% financing. Otherwise, there are lenders that will fund you 1 day after discharge with as little as 5% down. I see it everyday . . .

 

Bankruptcy seldom has a really good outcome. One reason is that it will be on your public record forever. So what that means is that if you apply for a loan and the application asks whether you have ever filed BK you will always have to admit that you did and when.

Another problem is that you will never be able to put the really prime credit cards in your wallet. The really highly rated credit cards won't take anyone who has ever filed BK. There aren't many of those kinds of CC companies but they are out there.

Yet another problem is that many lenders are very willing to lend money to those who have filed BK fairly soon after filing but as the filing ages and the time you can refile draws nearer and nearer lenders will be much more skittish about lending unless you have established a perfect payment history as well as a long employment history with good income.

The reason is that statistics prove that BK filers are somewhat like criminals in that the recidivism rate is very high. Statistics show that most of those who file BK once do it again every 7 to 13 or 14 years. Most file again as soon as they can. Like most ex convicts, they never seem to learn from their mistakes which is usually lack of sufficient income or simple mismanagement of their finances.

Whether people filing BK say they have learned their lesson and will never fall into the credit trap again or not, the fact remains that society almost demands we have and use credit and credit cards. Using that credit is extremely expensive. Even pawn shops charge less interest than many credit cards by the time you count all their fees on top of the interest.

If you can't qualify for Chapter 7 under the new rules you may end up paying most of the debts and maybe end up having less disposable income than you have now.

In my opinion filing BK is the worst mistake one could ever make even though it has seemingly worked out very well for millions of people, most of whom filed chapter 7 under the old rules.

 

The reason is that statistics prove that BK filers are somewhat like criminals in that the recidivism rate is very high. Statistics show that most of those who file BK once do it again every 7 to 13 or 14 years. Most file again as soon as they can. Like most ex convicts, they never seem to learn from their mistakes which is usually lack of sufficient income or simple mismanagement of their finances.

This just isn't correct. Congressional testimony from a bk reform advocate puts the serial filers at under 9%.

http://www.towson.edu/~jpomy/Testimony.html

Almost nine percent of filings are serial where the debtor has before tasted the forbidden fruit of the discharge and has come back for another bite.

 

I'll have to admit that I may have been working from information I can't verify which I saw quoted back in 2004 and can't find now.

Be that as it may, the source you quote isn't necessarily believeable either. The simple fact that someone said something in testimony before congress doesn't make it any more trustworthy than comments found on some blog or web site. Congress often accepts as gospel the mouthings of supposedly great people who are just as badly misinformed as anyone else.

It is the job of Congress to listen to testimony from a wide variety of sources including lobbyists whose sole purpose is to promote or defeat some legislation they are paid to promote or defeat and they do it regardless of personal feelings or convictions. Often only those who agree with the current objectives of congress are allowed to testify. Those who disagree with the current agenda are purposely kept out of the record.

The web site hosting that article is the web site of http://www.towson.edu and not an official congressional web site or web page.

The obvious question is where did the professor get his information? He doesn't tell anyone about that so we have no more basis upon which to accept his information any more than we do to accept what I said.

Being a university professor does not make him any more reliable as a source of information than anyone else. What is acceptable is actual government statistics which I have not found today when searching on Google.

In any case we are talking about recidivism under the old bankruptcy law. The new law hasn't had enough time to develop any statistics yet so we really have no clear idea what the rates are now.

 

Oh please! Dr. Pomoykala has been a huge proponent of bk reform. He's written numerous articles detailing the scourge of bk and he can only find a 9% rate for serial filers. I'll point out again that his testimony was in support of bk reform.

Often only those who agree with the current objectives of congress are allowed to testify. Those who disagree with the current agenda are purposely kept out of the record.

 

Having read his testimony I am familiar that he is a huge proponent of BK reform.
Be that as it may, one of the stated purposes (among many) was to make it more difficult to file BK which Congress thought would also address the problem of recidivism.

Another problem with what has been stated is that Dr. Pomoykala used the term "serial filings" rather than "recidivism" and that lead me to another google search using the term "serial filings" and I come up with a much different outlook on what Dr. Pomoykala may well have been talking about in his testimony.

There are several web sites that discuss that issue, one of them is to be found at http://www.bankruptcy-lawyers-chicago.com/serial_filings_and_the-Automatic_stay.php

If we are to give full credibility to Dr. Pomoykala then the above web site as well as others make the statement by Pomoykala much more credible because it puts context to his words. Other web pages to be found by using the same phrase he did (serial filings) either clarify what he said or explicitly back him up.

On the other hand that does not prove that what I have said is correct either and I won't claim that it does. What I have said about recidivism should be considered as rumor until proven otherwise.

 

CttnCndy -- Setting aside all other chatter here =), I want to let you know YOU ARE NOT ALONE!!!! My husband and I are in the process of filing a BK13. Now, we saw one lawyer and when he looked at how much we made, he told us we were not eligible for chapter 7, but a 13. He put us to a lawyer that deals in numerous 13's a month whereas he had only done a handful. We were grateful to him for that. Find the right lawyer for you. The first initial consultation is free. Just go in prepared. We even did a general expense as to where our money was going. Do what you can to walk in prepared. There are more hoops to jump through in filing. My husband and I just did the on line course through the CCC Service. Now we wait for our phone conference. Once that certificate is filed, it will go to the lawyer so he can file for our 13. We TRIED for the past year to pay our bills. With cutting out numerous things, we just were not cutting it, which is what brought us to the lawyer.

I know of TWO people who have bounced back nicely from a BK. My best friend (never knew any of this until recently) -- her husband filed a 7 in 2001. Last spring, they moved into their brand new built home in PA. He got a 6% construction loan NO PROBLEM. THey also have 2 credit cards but rarely use them; they pay cash. She is not on the loan as she still owes student loans (which is exempt from going into a BK) and their tax refund gets garnished. He got that construction loan as he worked for the same company for 12 years with a great salary. The bank didn't even blink at the BK.

It may not be the best thing, but it's not the WORST thing. A 13 is much better than a 7. DO NOT beat yourself up about it....because let me tell you, my anxiety attacks have stopped and I'm sleeping a bit better. We will pay back whatever we can pay over the next 5 years and my husband and I will come out of this.

HANG IN THERE...do what you feel is best for YOU!!!! Just find the right lawyer! Good luck!

 

I concur with the above. There are a few creditors which will shun applicants with a BK, no matter how far out from a discharge. However, this is becoming an increasingly small number of companies.

Generally, the rule of thumb is that in five years out and with respectable scores, one can obtain "prime" credit cards and in some cases, sooner. Also, please bear in mind the term "prime" is a subjective perception; i.e., some creditors such as Juniper, HSBC, Merrick, and dare I say it . . . Capital One, offer some fairly decent products if one actually searches for them. Now, it is likely that the creditors which you include may "blacklist" you (Citi, AMEX, Discover, etc.) but that is a small price to pay and even then, others won't (HSBC, Juniper, so on and so forth).

In terms of mortgages, even 1 day out will afford decent rates with only 5% down. Again, one has to pro-actively look but, they're out there to be found.

 

I don't doubt what you have said here but where does a bankrupt come up with $5,000 to put down on even something so cheap as a $100,000 house one day out from having the bankruptcy finalized, discharged or somehow discharged?

If he had that kind of money cash he probably wouldn't have had to file BK in the first place. In fact, he would have to have more than 5K in most places because houses that only cost $100K are almost universally small and mostly trashy.

 

I was using the "one day out" scenario in theory. However, I've seen come up with down payment pretty close thereafter because they aren't burdened with credit card payments any longer.