Is bankruptcy as bad as they tell me it is? What are the after effects?

Answer 1

my husband and i filed for bankruptcy last year in july. we were discharged from the bankruptcy in october. in march of this year we bought our first home. in july of this year we obtained two credit cards. there are ways to get what you need, you just have to look for it. having recently been through it, i would definitely NOT say that bankruptcy was as bad as everyone said it was.
there are actually a lot of companies that want to give you credit because 1)they want to help you re-establish your credit and 2)they know you can't file for bankruptcy again for at least 10 years so they know that one way or another they're going to get their money from you.
we didnt have to explain ourselves to the attorney or the judge. in fact, we were in front of the judge for a total of about 60 seconds. there are so many people there just on the same day as you, let alone total, that they don't even care. they dont want to hear everyones sob stories. we did not find any humiliation in it either. if we would have never told anyone, no one would have even known.
a bit of advice: DO NOT LOOK TO PAYDAY LOANS AS A SOLUTION TO YOUR PROBLEMS. THEY WILL ONLY MAKE IT WORSE.

Answer 2

Well, first comes all the humiliation of explaining why you got into this mess to a bankruptcy attorney, and then to a judge. You lose some control over your life, because they will decide what happens to the money you do have in an attempt to pay your creditors at least part of what they are owed.

Then there comes a period of five or six years within which you cannot declare bankruptcy again. You are not going to be trusted with credit for a very long time, and when you are, it will be in a very limited way. But also, many employers and landlords check credit records, and the bankruptcy will suggest to them that you either have no integrity or at the very least, have poor judgment.

So if you can find a way to pay your creditors without having to declare bankruptcy, you are way ahead of the game.

Answer 3

The effects of bankruptcy differ from country to country.
For example In the USA monies owing for income tax is not forgiven while in Canada it is.
The after effects are usually the same. The bankruptcy is on your credit history for up to seven years. You won't have much trouble financing car but the interest rate might be a bit higher. Mortgage companies will want you to be discharged for at least 2 years before they will look at any real estate purchase. Probably, your best bet is to get a secured Visa or MasterCard right after discharge in order to start reestablishing your credit.

Good luck

Answer 4

It is not as bad as it seems. But it's not easy either.

What are your alternatives?

Usually, people who file owe at least $25k in debt. They are currently barely making minimum payments.

To get out of debt, you would have to carefully examine your finances, cut out all unneccessary spending and put all of your disposable income into paying off the debt. Lets assume those nice creditors agree to lower your intererest rate a few points. You can expect to be paying about $400 a month for the next 10 years (assuming you can come up with that much money). Realistically you can expect payments in the $550-600 range.

If you file for bankruptcy, they will look at your income, and calculate what your "disposable" income is. You will then be placed on a payment plan from 3-5 years. If the court figures all you can afford is $300 a month, you will be placed on a 5 year plan, and a total of $18,000 will go into your "plan". Out of that money, your lawyer and trustee fees are deducted. Then any "secured" and "priority" loans are deducted. Whatever is left (mainly credit card debts) is paid. These people will only end up getting a fraction of what the debt is.

The advantage of bankruptcy is you will be out of debt within 5 years. Otherwise you will be suffering for 10 or more.

Now this assume that you do not qualify for a Chapter 7, which completely wipes out all of your debts. It that was the case, you can begin immediately to start rebuilding your credit.

Yes, your credit will be ruined for a few years. But, again, the alternative is 10 years of living in hell with collection agents pestering you.

Discuss your options with a bankruptcy attorney and see if that is the right thing for you.

Answer 5

I have to be honest with you - the new bankruptcy laws that are in effect make it almost impossible to actually declare bankruptcy anymore. I made an appointment to see an atty today to declare but was told I don't qualify & to seek out a mortgage to pay off my mom's nursing home bills. (the company is going to garnish my wages effective next month) I was floored!! He explained to me that the new laws make it next to impossible to qualify. So good luck to you - try to find some other way, I guess.

Answer 6

RUINED credit. It could take you YEARS and YEARS for anyone to approve a loan for you to buy a car, a house, to lease an apartment. NO one wants to take the risk.

If you can get out of debt ANY WAY but through bankruptcy, do it. As they said in school "this will go down on your permanent record" and this time, it's true!

Answer 7

What does Bankrupcy Mean: If the bankrupt entity is a firm, the ownership of the firm's assets is transferred from the stockholders to the bondholders. Shareholders are the last people to get paid if a company goes bankrupt. Secure creditors always get first grabs at the proceeds from liquidation.

Answer 8

sure, it is going to reason a large drop on your credit status it really is it really is presently at 750. in spite of the indisputable fact that, it does no longer spoil your credit status perpetually. you may have sturdy credit again in as low as 3 years.

Answer 9

You have to learn to live without credit cards for several years. If you can't pay for it in cash, then you can't buy it.

If you can do that, then it's not a big deal.

Answer 10

It tells the world you can't control your spending, and you are a bad risk. if there is any way you can avoid it do it. Only losers do it.