Why is filing for bankrupcy so bad, besides the fact that your broke?

Question

No, im not in debt, I was watching this show called "Big Spender" on A&E, and they were talking about how, filing for bankrupcy basically means your life is over! Why? What happens to you financally?!

IM NOT IN FIANCIAL TROUBLE!!!!! Im stil a teen....i saw it on a show and i was just curious! CHRIST!!!!

Answer 1

destroys your credit rating for many years to come

Answer 2

Although I don't know much about finance, I can tell you a simple answer:

When you declare yourself bankrupt, all your debts are in effect cancelled in certain circumstances.

You will have HUGE problems with your credit rating for the years afterwards. It can affect your ability to get credit, mortgages, loans etc.

Also, when you declare yourself bankrupt, your assets are usually stripped, meaning that if you cannot afford to pay creditors, and you declare bankrupcy, you could loose anything bought by you in order to recover the debts owed.

This is not always the case, and like I say, I'm not a finance person, but I know that it can have HUGE consequences.

Answer 3

Going bankrupt says to the lenders that you are a bad credit risk.

You can't pay bills. And so, when you get top heavy with debt, you go bust, i.e., bankrupt.

NOT GOOD. Because this stays on your credit report for 7-10 years.

Bankrupt status puts HUGE dings on your credit score, and if you ever want to open credit again you have this on your score.

Plus, in some states car insurance companies will NOT insure you, or quote you at ridiculously higher car rates due to your bad credit score.

People with bad credit, bankruptcies, etc. -- typically -- are bad risks all around. Pathetic losers that drink and drive, to stereotype.

SO . . . try NOT to put this bankrupt status on your record if you can avoid it.

Try repairing your credit!!

Answer 4

Filing for bankruptcy stays on your credit bureau record for 7-10 years (but in the background forever). It can and in most cases does affect buying a house, buying a car, applying for and getting a management career position, definitely affects getting any job where you deal with money (i.e. a bank, mortgage company, etc.), could affect your renting an apartment, (it's included in some leases) halts you (at least for a while) from getting a credit card.

Answer 5

T.V. is too dramatic. I made some big money mistakes in the past and had to file for bankruptcy twice! I didn't lose any possessions through it all and my credit rating is at the national average and climbing. It's not as good as it once was but it will eventually get there again. Basically, bankruptcy bailed me out and lifted a huge burden. That burden is what could have ruined my life, not the bankruptcy.

Answer 6

You will have trouble getting credit for a long time. This means problems getting a car loan, a credit card, mortgage, etc. You can obtain them but you will end up paying a lot more than someone with good credit.

You can also have problems getting an apartment, a job, insurance because they all look at your credit report as well.

Answer 7

I always thought it was really bad and to be avoided--and carried a negative stigma...BUT...
My ex-husband, after trashing our marriage to have an affair with another man's wife, got himself far into debt to "have his new environment" and then he bought wedding rings for him and his "floozy" one day, declared bankruptcy the next day, and they got married two days later! Go figure. He wimped out of most of the debts he owed, still got to keep the house they had bought, FOUR cars, and got a PROMOTION at his job that supplies an apartment for them so he lives on the worksite--so he doesn't even have to worry about paying rent. So after destroying 36 years of life together and destroying our family, he doesn't seem to be having ANY problems at all. He gets his regular paycheck, a retirement check, has side jobs that bring in extra--plus he has HER paycheck--and neither of them care about the destruction they left behind or the people they victimized in their 3 year orgy of selfishness. Now, they've screwed the system, too.
Oh--he has to pay $176 a month as punishment--but no other bills. I can't see ANY penalty in this mess--except to those of us he--THEY--left in their wake....

Answer 8

it's not what happens today that's the problem. it's what happenes over the next 10 years when you try to buy a house, buy a car, get a credit card - possibly even when you get a job! Some employers are asking for credit reports before hiring somebody because they want employees who are reliable. They figure that if you can't manage your own life, they shouldn't trust you with their business.

Answer 9

it stays on your credit report for 10 years..if your planning on buying a major purchase you will probably have to wait until you have at least 2 years of good running credit after your bankruptcy. But...if you are in serious debt it can help give you a clean slate. i would suggest financial counseling if you are having problems though so you dont end up back in the same situation again. good luck

Answer 10

Because when you file for bankrupcy, your credit score goes way down, and then you cant do stuff like take out loans or lease things, and your credit card limit goes down. Basically poeple (and companies) dont trust you with borrowing their money.

Answer 11

some employers will not hire if a person has bad credit because its a integrity issue. Also, it can effect the outcome of a loan application and if a person is trying to get a credit card.