When you file for Bankruptcy what happens to you credit and what happens to your living expense?

Answer 1

Your credit rating/score is VERY low, so you usually pay higher interest on credit; however, I was also told that more creditors are willing to give you credit because you can not apply for bankruptcy again for another seven years - so not only are they guaranteed to get their money back, they get more in interest, too!

A close friend went through bankruptcy a few years back and has since bought a new car for the first time in her life; as well obtaining a mortgage for the first time in her life. She did say that the interest rate is very high though.

I went through bankruptcy last year, because my debts had racked up during a two-year period of unemployment. I have not applied for any credit since, but I get bunches of credit offer in my mailbox (which I promptly tear up).

I am saving up for a car, because mine has 157,000 miles on it and could require expensive repairs at any moment. So I'm waiting as long as I can so I'll have a bigger down-payment, which should help me get financing. Because I have fewer bills, I'm actually able to see my savings grow, instead of my debt growing because I can't make minimum payments.

Answer 2

Bankruptcy leaves a bad mark on your credit report for 7-10 years. Some creditors will accept you if you are in a current bankruptcy because your obligated expenses will be lower, thus, having the ability to pay the new debt.

Answer 3

Chapt7 is now very difficult to obtain, but if you do, the Trustee takes your liquid assets and divvys it up between the creditors.

Chapt13 is a repayment plan with a budget to include living expenses and you have to be on it for 5 years.

If you are considering BK, go ahead and sign up for Credit Counseling (not debt consolidation). You have to complete a course specific to BK filers before you can file. So do the first step - you don't have to file if you sign up for the required counseling.

Then you have to complete another course at the end of the bankruptcy. Discharge is good - Dismiss is bad. You are shooting for a Discharge.

Answer 4

You have NO credit for a minimum of 7, maximum of 10 years. Your living expenses are dependent on you, not on filing bankruptcy or not - if you don't change them, they remain the same. Bankruptcy only impacts your current debts, not new ones, and not ongoing expenses like rent, electricity, water, etc.

Answer 5

It depends on what type of Bankruptcy you file, but typically it will mess up your credit for 10 years or longer and most individuals living expenses temporarily decrease, but rise back to the pre-bankruptcy living expense or higher!

"Bankruptcy in the United States is a matter placed under Federal jurisdiction by the United States Constitution (in Article 1, Section 8), which allows Congress to enact "uniform laws on the subject of Bankruptcy throughout the United States." Its implementation, however, is found in statute law. The relevant statutes are incorporated within the Bankruptcy Code, located at Title 11 of the United States Code, and amplified by state law in the many places where Federal law either fails to speak or defers expressly to state law.

While bankruptcy cases are always filed in United States Bankruptcy Court (an adjunct to the U.S. District Courts), bankruptcy cases, particularly with respect to the validity of claims and exemptions, are often highly dependent upon State law. State law therefore plays a major role in many bankruptcy cases, and it is often quite unwise to generalize bankruptcy issues across state lines.

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Bankruptcy chapters
There are six types of bankruptcy under the Bankruptcy Code, located at Title 11 of the United States Code:

Chapter 7 (a liquidation-style case for individuals or businesses),
Chapter 9 (Municipal bankruptcy)
Chapter 11 (a more complex rehabilitation-style case used primarily by business debtors, but sometimes by individuals with substantial debts and assets)
Chapter 12 (a payment plan or rehabilitation-style case for family farmers and fishermen)
Chapter 13 (a payment plan or rehabilitation-style case for individuals with a regular source of income)
Chapter 15 (ancillary and other cross-border cases)
The most common types of personal bankruptcy for individuals are Chapter 7 and Chapter 13."

Answer 6

Someone told me that when you go bankrupt, you can borrow money more easily, because the borrower knows you won't be able to declare bankruptcy again for something like 7 years.

Answer 7

Your credit is screwed for 7 years!

Answer 8

You are basically screwed. It will actually create various of problems. So be responsible with your credit. Because that is the window of opportunity.

Answer 9

well u still have to pay your living expenses they do not change - you credit goes down the toilet