Bankruptcy?

Question

I am in so much debt right now that I do not know how I am ever going to get out of it!! It seems like my only way out is bankruptcy. If I do file for bankruptcy, will I ever be able to buy a car, home, etc... ever again?

Answer 1

Working in Bankruptcy law, I am faced with these questions every day. Bankruptcy is a great law, and is one of the very few our Federal Government has provided to allow "forgiveness" to the consumer. Not only have I worked in Bankruptcy law for about four years now, I have also successfully filed and lived through a Chapter 7 Bankruptcy filing.

Here are a couple things to think about if you decide to file bankruptcy. First of all the bankruptcy will show up on your credit report for ten years. That's ten, not seven-Just like any judgments. What that means for you is that you will be faced with higher interest rates for some time- but that’s where you learn to shop around. Not all vendors will find you credit unworthy because of a bankruptcy filing.

Here is the other good news- when you receive your bankruptcy discharge (your discharge is a piece of paper from the Court which states you have completed your bankruptcy, and your debts have been "discharged") you will be able to immediately buy a car and get credit cards. (Well actually this is a bit tricky because in a Chapter 7 you can start purchasing following your discharge (which usually occurs following 3-5 months), but in a Chapter 13 (which can last 3-5 years) you may be able to borrow right away. An Attorney would have to advise you on which you would qualify for.

Here’s a word of warning to this tale- following your bankruptcy discharge a lot of vendors will see you in your newly un-debted state, and will attempt to offer you bad deals on cars, credit cards, and home refinancing. In short- they will try to take advantage of you. You will find that the best deals will start circulating your way after one year. Mortgage lenders will loan after a year, although they also generally prefer two to three years before offering you a good rate. Most financial institutions (for example; Citifinancial) will not allow signature and collateral free loans until after 3 years following your discharge. You can get a great loan from them though after one year if you have something you can use as collateral.

Best thing to do, is following your bankruptcy, monitor your credit wisely and send letters with your bankruptcy paperwork to each of the three reporting agencies, and request that they review and correct your credit to accurately reflecting your filing. Monitoring your credit on a yearly basis will also help continue your renewal into the credit worthy world.

Here is a little Bankruptcy extra for you. Still don’t know if you will be able to buy a house, car, etc. after filing for bankruptcy? Check out these famous individuals that have filed bankruptcy. http://rjabankruptcy.com/articles/famousindividuals.html . Donald Trump never seems to have had a problem bouncing back after his bankruptcies…and neither will you. BKP

Answer 2

Eventually, yes. I just was discharged from a Chapter 7 and I'm already getting offers from car dealers. It will stay on your credit for 10 years, but in the meantime, keep your credit good. Pay your bills on time, every time. If you're behind on bills to the point where they're calling and everything, you're credit has already been impacted. Bottom line is if you can't pay, you can't pay and believe me....the creditors will not give up! They'll call, send letters and eventually start suing you if you don't pay. I don't know if you're at that point yet, but I was and bankruptcy was really my only option. The amount I owed, I couldn't have paid if I lived to be 100 years old. Sometimes, there are no other options and you just have to take the consequences. If the amount you owe and the amount you make are under a certain amount, you may be forced to file chapter 13 and your credit wouldn't be as impacted as a chapter 7 would be. You need to talk to an attorney to help you figure out what is best for you. Find one that will take into account your whole situation and help you determine what's in your best interest. The first consultation is usually free. Dispite what some people think with the new law, you can still file chapter 7 and not 13 if your debts are over a certain amount and your income is not. If you have enough what they call disposable income, you are now forced into 13. The laws really have not changed things that much. However, if you own a home and car or any assets, you're likely to lose them in a 7 depending on how much equity and if you are behind in payments or not). I was fortunate that I did not lose mine.

Answer 3

Bankruptcy is way more trouble than it's worth. You'll be sorry if you file.

Have you ever heard of Dave Ramsey? He is based out of Brentwood, Tennessee and he is fabulous!

Visit his web page at:

www.daveramsey.com

Talk to someone at his office before you make any decisions. Good luck and hang in there. There is hope for financial peace ahead. It'll just take a lot of work and a little time.

Answer 4

You should have done this last October before the laws changed, now the best you can hope for is a repayment plan (chapter 13). And yes your credit will rebound quickly, due to the fact everyone knows you won't be able to file bankruptcy for another 10 years. They will be sending you lots of offers for credit, don't fall for the trap, be smart, stay out of debt.

Answer 5

i filed BK last year, i made it just before the new law was passed. i bought a new car w/in 6 mos after being discharged (finalized). of course i have a huge APR. i'm not in the market to purchase a home, so i wouldn't know, altho i've heard you can a home in 2 to 3 yrs.

with the new law in place i believe it's a lot harder to file for bankruptcy. i've heard that you have to "qualify", and even then you're sometimes required to make pymts. i've also heard that there are classes you have to attend, probably similar to traffic school.

many lawfirms/paralegals offer FREE consultations, so take advantage! i found my paralegal in the yellow pages, it cost me about $1800. but what a relief.. i'm glad i did it.

good luck!

Answer 6

Every case is different. It really depends on how well you conduct yourself after filing for bankruptcy. I heard from one person who's credit rating had gotten back up to 740 within a year of filing for BK, so it really depends on the situation.

Answer 7

yes you can buy a car and a home after BK. There are many loan programs on the subprime side (2yr arms) that will finance a home just one day out of BK.

For conforming rates (normal rates you hear about) you must be discharged a minimum of 2 yrs with no bad credit after the discharge (collections, lates, etc)

As for the car, same said. My GF filed under 2 yrs ago and got a 7% rate on a used car so it's possible.

Answer 8

Hi Itlaiana2683, Yes it is true, but when you filed for the bankruptcy, you are also declaring total surrender of the business to the hands of creditor. Although, you can still maintain rights of the company, for the sake of proper decorum, it is advised to allow the bankruptcy trustee to work on the survival of the company.

Answer 9

Bankruptcy is the first option,then face your debt and ask experts advices and attorney advices to be guided for next steps

Answer 10

you can buy a car within the 10 year bankruptcy on file time period
you will pay a bigger down payment and higher interest rates
buy a home? not too sure