We are doing everything we can to avoid it but in case we have to in the next few month (husband is self emplyed, I make about 2k/month and we have 2 small kids), what are the downfalls? I know about the 7 years on the report but what if we own a house and cars? I don't plan on getting another credit card for a while.
We got in trouble in the first place by financing my husbands business with CCards and have now too many debts to repay.
Any insights woule be appreciated along with experiences.
Thanks
2006-09-23 11:44:08 · 10 answers · asked by ellasmom2 2 in Business & Finance ➔ Credit
My husband and I filed back in June, just finished everything up. It was an easy process. And really the only downside is the fact it stays on your credit report for so long. But if you must, I advice not to make any big purchases or take open a line of credit any less than 5 months before you start to file. Because if you do, it will take longer and can be sorta headache. You have a lot of papers to fill out, saying what you own and how much money you have an how much in debt you are. Then once that is all done, you have a court date, you attend the hearing. Takes all of 5 mintues, more than likely there will be 10 or so other people there. Then once that is over, there is a 2 month waiting period, in which the credit card compaies or anyone you filed against can disbut the bankrupsty. Then after those 2 months you are done. You can start all over again. If you are worried aboutthe house and cars, you can reafirm them. Its just a document that you sign that says you will pay back all the money on those things. Then the bank with which the loans for the house and cars are through will send you a letter and stuff for you to fill out stating that reafirming them wont cause undo hardships upon you and your family. Reafirming usually cost an extra 100 dollars per item. So if you have 2 cars and the house, that would be 300 on top of the 700 or so it would cost. And it is well worth the money. And actually it would be a good thing to get a credit card after you are done filing. That way it will rebuild credit, go through capital one. you should worry about getting in trouble with it, the credit limit will be only like 500 dollars. You wont be able to gain credit by paying on the house and the cars. Students loans can't be cleared. But all in all, its really easy and worth it. Its nice to be able to start all over. Good luck you can email me if you have any questions. I hope this helped. And don't feel bad about it, everyone has money problems.
2006-09-23 11:58:10 · answer #1 · answered by Jessica 6 · 0⤊ 0⤋
Other than the BK being on your credit report for 10 years, I haven't yet found a downside.
For anyone that has been swimming in a sea of debt for years, and undergoing the stress involved in all that.. Chapter 7 (or 13) can be a tremendous relief.
I'd go talk to a BK lawyer .. most offer a free 30 minute consultation where they go over all your debts, income etc and will recommend which type of bankrutpcy is best for you.
If a majority of your debts are CC and non-secured, they may recommend Ch 7
If you are behind on car and house payments (and wish to keep your house/car) they will probably recommend a 13.
It just depends.
Sometimes BK is the best thing to do!
Also, to all the people giving $$ limits and such... IT VARIES BY STATE and JURISDICTION.
That's why a person that is considering BK should be consulting an attorney in their city/state familiar with BK laws and what is exempt and non-exempt.
2006-09-24 08:12:00 · answer #2 · answered by CactusFlower 4 · 0⤊ 0⤋
The bankruptcy is on your credit report as the first thing anyone see for the next ten years. If you have two small kids you need to consider whether they might need braces or anything else you would have to finance within that period of time. Using personal credit for business is the biggest mistake anyone can make. It seems as though your husband should have gone back to a real job quite a while ago.
Only a bankruptcy attorney can tell you what you need to know about your unique financial situation. Your home may be protected, but cars valued over $5k or something to that effect might not. You are expected to liquidate as much as you can. You shouldn't hang on to materialism when so much is at stake.
2006-09-23 12:49:07 · answer #3 · answered by misslabeled 7 · 0⤊ 0⤋
My husband and I have filed twice. Both times it was really easy. I would consult an attorney, since the original consultation is free. You may not have to file a chapter 7, you might be able to do a chapter 13. In a chapter 13 you pay off your debts at a lower amount than you owe over a period of a few years. I know someone who did it and their attorney included his fees in the chapter 13 to be paid off at the end of the term. The link at the bottom has some good info. In the end, the relief bankruptcy provided us was worth more than bad mark on our credit for 10 years.
2006-09-23 12:46:40 · answer #4 · answered by Pauleen M 3 · 0⤊ 0⤋
It's worth setting up a consultation with a bankruptcy attorney. You will most likely be allowed to keep your house and at least one car. It will stay on your credit report forever. And if you do file, when it is final, creditors will start calling you to apply for their credit cards. Weird world.
2006-09-23 11:50:59 · answer #5 · answered by beez 7 · 0⤊ 0⤋
Before you go running off to bankruptcy court, think twice... make that three times. Bankruptcy is not only going to affect your credit but chances of employment, insurance rates, etc. Check out the link below and go to the "take the first step" link. It may not be answer for your situation but let them give you a second opinion. Bankruptcy is not as easy as it used to be if you own a home, car and other possessions.
2006-09-23 13:57:04 · answer #6 · answered by Anonymous · 0⤊ 1⤋
You don't give a whole lot of information about your situation. The only problem I see is you make $24k a year...plus whatever l your hubby makes in his business. If he makes about the same amount, you are going to be over the minimim income limits to be able to file for Chapter 7. That means you will be forced to go Chapter 13, and end up paying back a portion of your debts.
See the link below about the new bankruptcy laws. Then contact a bankruptcy attorney and get a free consultation to see exactly what you options are and if it will work for you.
Do not feel ashamed if you file bankruptcy. Your situation is identical to a whole lot of other people who filed. It doesn't make you a deadbeat....just someone who tried something and it didn't work. Lesson learned: When you start a new business it's dangerous to set it up in a manner that could put your personal property in jeopardy.
2006-09-24 05:46:45 · answer #7 · answered by Anonymous · 0⤊ 4⤋
I would consolidate it all by "selling the debt" to some
clever company with whom you can discuss a better interest rate, they pay your debt off for you then you just pay them, they get some good interest, you pay a lower interest... both win.
But you don't want to trust just about anybody, read up on it, get ammo first then it'll be easier, here you'll find tons more info than I could possibly
post here. It'll take a bit but it's your money and well worth
taking your time over it
http://credit-cards.ebookorama.com
and here http://finance.ebookorama.com
also plenty more to read here
http://credit.ebookorama.com
http://credit-repair.ebookorama.com
if you get any luck please don't forget about me lol, hope it helped you!
2006-09-26 05:51:27 · answer #8 · answered by ken_voss12345 4 · 0⤊ 0⤋
Can't answer your question. But you guys might want to try refinancing at a lower rate by borrowing from individuals. Check out prosper.com.
2006-09-23 11:47:01 · answer #9 · answered by HomeSweetSiliconValley 4 · 0⤊ 0⤋
I suggest consulting with an attorney it free to get there advice first visit
2006-09-23 11:57:15 · answer #10 · answered by Anonymous · 0⤊ 0⤋