Is filing bankruptcy really all that bad??

Question

My husband has been in the hospital 5 times since February. We do not have medical Insurance because of many reasons. When he was in the hospital the only way the family could survive without his income was to put everything from groceries to CIPS on the credit cards because we had no income coming in. Now that he is back to good health and we are both working we still don't make enough to pay off all these bills. We tried filing for state aid to help with the medical but we were denied. The medical bills alone are over 40 thousand and the credit cards are probably around another 10 thousand. What should we do? If we file will we loose our house and car too? I would like to just erase the medical and credit card debt but keep some other small loans that we have. Is this possible?

and if we do file, what will that do to our credit? Will be not be able to get a loan for a long time?

Answer 1

To address the last part of your statement- your credit will be pretty bad for a while. The bankruptcy stays on your credit report for 10 years and it can be hard to get a loan with it on there.

However, I'm the person least likely to say someone should file bankrupcty but even I think you should. Bankruptcy was created to be a measure of last resort and though it's been very abused lately, it was made for situations such as this. And you're not alone. The last statstic I heard was that 80% of bankrucpties were because of unexpected medical bills (and with the bankruptcy laws having changed, it's probably even higher now)

Bankruptcy is bad, but it's not the end of the world.

Answer 2

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RE Is filing bankruptcy really all that bad??

My husband has been in the hospital 5 times since February. We do not have medical Insurance because of many reasons. When he was in the hospital the only way the family could survive without his income was to put everything from groceries to CIPS on the credit cards because we had no income coming in. Now that he is back to good health and we are both working we still don't make enough to pay off all these bills. We tried filing for state aid to help with the medical but we were denied. The medical bills alone are over 40 thousand and the credit cards are probably around another 10 thousand. What should we do? If we file will we loose our house and car too? I would like to just erase the medical and credit card debt but keep some other small loans that we have. Is this possible?

Answer 3

Chapter 13 Bankruptcy may protect your home and your automobiles dependent upon the value of your vehicles and the amount of equity in your home. Since your financial issue is based upon medical issues (some research indicates that over 50% of Bankruptcies are medicaly related); then, you shouldn't feel bad about having to go bankrupt. Bankruptcy is not the stigma that it was a generation ago. Millions go bankrupt each year with over 2 million declaring bankruptcy last fall due to the changes in Bankruptcy law passed by the Republican congress - meaning that there were few consumer protection changes in the law and everything for the finance industry. Anyway, since you didn't start Bankruptcy by last Ocotober, you'll probably end up in a 5 year bankruptcy plan. As long as you can make the payments to the plan, your attorney should be able to protect your equity in your home and keep your vehicles. Once you are discharged from the plan, you'll have some difficulty in obtaining loans; however, you 'll probably still get loans but at a higher interest rate. Best solution to the loan issue, save, save, save. However, do not save in a savings or checking account as all of your discretionary income is subject to the court during the period that the court mandates that you'll have to make payments. Get a visa/mastecard debit card from your bank or credit union. This will still be using the cash in your account so you have to be aware of your current balance constantly. However, this enables you to use your Visa/Mastercard Debit Card for making reservations, internet credit card transactions ect. These debit cards can process similar to credit cards, but impact your accounts almost immediately. I'm in Chapter 13 right now and it's difficult; but going to an all cash basis with no credit card debt and rebuilding, while saving our home and vehicles is the only recourse we have when we lose our jobs or have medically related issues since our Republican government cares little about those whom fall into difficult times.

Answer 4

I'm sorry that you've run into some hard times.

All you can do is try your best. Just make sure that you are trying your best. Consider increasing your income and/or decreasing your expenses (sounds simple, but that system really does work).

Try to work on a manageable payment plan. Go talk with the healthcare folks. I'm sure they'd rather have low and slow payments rather than no payments (they can't stay in business too long if folks don't pay their bills).

I do believe that you can select which debts you file bankruptcy for. Just remember, all they'll do is set up a repayment plan for you which is something you can do on your own behalf without the bankruptcy.

Answer 5

See a lawyer and file for chapter 7 or Chapter 13.

You have a $15,000 exemption in your homeowner equity, and $2,000 in your auto equity. You can only lose them, if you do not reaffirm those debts. If you keep paying on your mortgage and car loan, you will keep them

Chapter 7 primarily discharges Unsecured debt.

There is very little "stigma".

Chapter 13 is a payment plan that sends wages and salaries to the Ch. 13 trustee, to pay your creditors. AND, interest is FROZEN, so you don't keep falling farther behind, each month..


I filed twice in my life.
You can, too.

Your credit will be GREAT, because they know you cannot file again, for seven years.
Sometimes, it's hard to get a new credit card--or auto loan-- but these days, all that happens is that you might pay a higher interest rate than others.

Answer 6

Bankruptcy law has recently changed, and it is more difficult today to file than 2 years ago. You do need an attorney. Certain states, like Florida and Texas, shield your home from being sold to pay your debts.
Your credit will be affected for 7 years after filing.
You can not keep certain unsecured loans, and apply others. Simply because that wouldnt be fair to the lenders that are being discharged.

Answer 7

When you are that much in debt, filing for bankruptcy is not the end of the world, probably the best thing to do. There are laws that will protect a house/car, etc. Search around for a reputable attorney that doesn't charge over $1000 and you will probably get the fresh start you need.

Answer 8

i recently filed a chapter 7 on just credit cards...i didn't loose anything cause fortunately nothing i have is of value. you can file bankruptcy on what ever bills you want to file on...you don't have to file on everything...before filing i would recommend a consultation with a lawyer and a debt consolidator so you can weigh out your options..remember bankruptcy stays on your record from 7 to 10 years and is hard to credit re-established...what ever you choose to do good luck and sorry for your mishap

Answer 9

well... depending on your situation you may need to get a lawyer, if he was out of work for medical porpuses then you may have been able to get a medical card. and the state shouldn't have denied you for aid. bankruptcy is bad, think of it this way, if you were asked to finance say a car for $15,000 and the people you were financing for filed bankruptcy, thus meaning they can not handle paying all of their bills, would you finace them? But if i were you i would definatly check into a lawyer.

Answer 10

it's not all that bad.. it only screws up your credit... you should only care about credit if you plan on getting right back into debt...