Should bankruptcy be good?

Hi there,
I recently filed (and has since discharged) for chapter 7, and for my husband and I it has been a real life saver. Be very carefull of the method you use to re-establish your credit, ie getting back into debt to quick, or too deep. Many people advocate a secured credit card, then a non-secured card, but for now I'm avoiding credit like the black plague.

I have noticed that one excuse for getting credit cards is to build credit to be able to purchase cars and a home, but in two years with a good down payment most people can get a mortgage anyways, and as far as the car is concerned, we were getting offers (with the knowledge that we had bankrupted) for cars before the bankruptcy even discharged.

I will say before you pursue credit, do yourself a huge favor and start saving money after your bankruptcy. Also, If you plan on going bankrupt, find a lawyer and do it right away. The laws are changing, and may make it more difficult for many people to file.

 

You can start rebuilding right after discharge. I applied for two offers I received right after mine to rebuild history for an FHA home loan in the future (2 years post discharge).

The other member is right, filing will erase your debt, but it doesn't make right whatever happened to make you have to file. Saving money is key, having your money go in a positive direction is way better than owing money.

The good thing after bk is that our limits are so LOW that it's not that easy to get in too deep, at least in the beginning. But you still have to make wise choices, educate yourself on rebuilding, credit reports and the sub prime products out there that you may get approved for.

Starting over isn't very difficult, but really weigh if bk is right for you before you leap. And for sure get an attorney.

Newstdt

 

Hi - what are the assets and how much do you owe?
What kind of debt - all credit card woth large or maxed balances? Home? Car?

Its something you will get VERY TIRED of dealing with 6 yrs out....For 7 YEARS, it will be on your reports if you file Chap 13 - and complete it successfully. My payment plan was 5 years - @ $600 per month. It is not discharged until all payments are finished. The advantage is that in one more years, I will have perfect reports - and this will be behind me.

If you file Chap 7 - where you just don't pay, that might be the right option - BUT - it will report for 10 YEARS.

aarrff - Dogman

 

I was discharged 1/01 and have since removed all negative items except for the bankruptcy, and have received credit cards from 500 to 3000 cl. my score is around 700

 

You have done graet sndevil1 !
GREAT -
regards - Dogman

 

First off, make sure you have a good attorney. Contact your local bar association for a referral. Find a bankruptcy lawyer who's been around for awhile and has an established track record. Bankruptcy laws were changed rather dramatically a year ago, so you want to make sure you're in good hands.

I filed for chapter 7 protection in 1995. Six months after all my debts were discharged, I leased a new car and a few months after that, I got a secured credit card from Capital One. It's not as difficult as you might think to recover from bankruptcy, although buying a new home is usually out of the question until at least two years after filing (sometimes longer). Today, I'm leasing my own apartment, have a 6K Cap One MC and a 5K Citi card. EQ score is 673.

If I could do one thing differently, however, it would be to stay the heck away from credit cards after you file. Buy a new car or house, sure...but avoid credit cards like the plague. Maybe just get one for emergencies, but don't get into the habit of relying on them, because that's what I've done. I owe 5K on Cap One (12%) and 5K on Citi (0%)!! I've never been late on any payments since I filed in 1995, and I have 6,500 in savings, so it's not as bad as it sounds. But, if I could do it all over again, I would have just kept a 1K credit card and put more money into savings.

Bankruptcy is a serious thing. It took me over a year to come to the conclusion that it was what I needed to do. The best advice is often from an attorney. When I filed, my lawyer asked me if I could pay off all of my debts in 7-10 years. He said if the answer was "No", then filing is usually a good choice (I was looking at 12-14 yrs to pay everything off considering my balances, interest rates, and annual income).

Best of luck to you!

 

Hi outofdebt - the real issue was that I needed to do what had to be done at the time.

Outofdebt - you know how they have all these DEBT restructure companies now? Hell, as a try to pay, I called one of those agencies in 1996 - they said "Go file - we're not taking you!"

I hung up the phone and called a BK attorney!

Hope all is well - and yup you're doing great.

aarroo - dogman

 

Hey Dogman, how's it going? I'm doing great...still can't decide what to do with the $6,500 in savings (pay off debt, save, combination)...remember the "Pay Off Debt or Save" thread? Nice problem to have I guess!

Anyway, here's a link to the American Bankruptcy Institute...lots of good info here:

http://www.abiworld.org/

 

Wow, that's wild. I did the EXACT same thing! In 1995 I went to two credit counseling services and they wouldn't even talk to me. They said that I was so deeply in debt that the most they could do is maybe reduce my monthly payments by 5%-10%. They actually RECOMMENDED that I file for BK. I couldn't believe my ears!

Anyway, the rest is history....

 

Amazing - maybe we should go out LOL!
In 2002, we would have had firms begging for our business.


aarrrrfff - dogman

 

Facts please!

Which credit issuer's have you up to $3K?

and

How exactly did you get your negative items removed??? How did you dispute, how often, with CRA's or OC's? Any tips would be of help I'm sure to a lot of us.

I've tried on a few occasions and had NO luck at all. Everything always comes back verified. I'm not even trying to beat the rap, just get things fixed that don't seem to jive with the dates etc.

I have no negatives other than the bk accts and the bk itself. Negatives=6, Positives=28. As I said before, my scores are higher I believe since I had good credit before I filed, was that the case with you?

Newstdt