Is filing bankruptcy REALLY that bad??

Question

Im 23 and made alot of stupid financial decisions. Im struggling now to make ends meet. I can live w/o filing, but getting a clean slate sure would help. What do you guys think and people that have filed, is it really that bad??

Answer 1

It all depends. I had to file for bankruptcy a couple of years back to get out of a bad financial situation,and for me it's a mixed blessing. On the one hand,it allowed me to begin with a clean slate,and lately I have been alot more careful about my spending habits. On the other hand,bankruptcy stays on your credit record for about 10 years,from what I've heard,so this would likely make it hard if not impossible to apply for a new credit card,qualify for a loan,etc. I'd say weigh all your options before you decide on filing for bankruptcy. Also,if you absolutely must declare bankruptcy,make certain you know everything you need to do and do it properly. Keep in mind,however,that I had filed before the new bankruptcy laws went into effect,so check for the latest rules and information.

Answer 2

Very bad idea. Pay a little to each company each month until it's paid off. Yes, filing bankruptcy will hinder you getting a new car or house. Pay off the credit cards. Cut up the credit cards, and don't get any more. Use ALL of your tax returns to pay your debts. "Around $1000 - $1500 to file bankruptcy. You will be ok after 7 yrs." Nope, not that easy anymore. It will still show that you filed bankruptcy. My parents did it 20 years ago, and every so often it rears it's ugly head. It's happened a few times since. My brother and his ex wife did it 10 or so years ago. Even after 7 years he couldn't get a home loan. Go to your local credit counseling services. They can help you. Edit: These debts, are most of these wedding debts? You would do well to start advising young people to have small scale weddings that they can afford if this is the case. Starting your life off in debt is not the way to go. I would suggest marriage counseling as well, because this WILL affect the marriage. Also, if any of these were just storebought items you don't absolutely NEED, return them if possible, or have garage sales every so often, and any money you get is to go to pay off the debts.

Answer 3

It's true about the 7-10 years on record, the higher rates, and possible turn downs ... I know people in the past who did it and if it's still the same you'd better make sure you don't have much for them to take (I think they still review your possessions)

It's better to try to contact the creditors and say listen I'm in a bit of a bind and without being able to lower some of my bills I'll be filing bankruptcy ... is there anything we can do to lower the amt ... sometimes you need to keep getting transferred and keep calling them .. but it is possible to do, my brother who just had a divorce had to do it because his ex didn't pay any bills during the last mos of the separation ... and they cut his amt owed in half, as long as he agreed to pay on time and regularly, just don't screw up because they can take action after something like that, so don't add onto the bill you owe them (though they usually consider the account closed anyway) I highly recommend trying everything before claiming bankruptcy. Credit ratings are used for everything these days including insurance policies.

Answer 4

Bad for you? Probably not too bad cuz you're young enough to pull it off and still buy a house in your early 30s (or you could hook up with some someone with good credit and ride that out)

For your creditors? Horribly bad. You're acting about as selfish as can be in acknowledging that you can afford to live without filing bankrupcy, but don't feel like it. They had to work to earn the money that you owe them, and you're basically screwing them out of it. I'm sure you'd be pissed if you lent someone 5 grand and then they just said 'hey, i can't afford to pay you right now so i'm not even going to ever try - too bad, so sorry'.

Its easy to do with the way people see companies as faceless juggernauts that won't miss the money, so really, its up to you.

If you do, I hope that the money you owe is all interest, because any principal you're giving up on is really coming out of the pocket of all the people who own shares in the company.

Answer 5

YES!!!!! Bankrupcy stays on your record for 7 years after you pay off the debt. Not all BKs are the kind that washes away the debt free and clear. Besides, if youhave credit card debt...it would be better to let them go in to collections, then into a charge-off. Then when you have the money, you can call them back and tell them "Look...I have your money and I will pay it if you DELETE it from my credit report." They will...really, all they want is their money so if that means that they stopp reporting to the credit report in order to get your money they'll do it. Besides, it cost them like $10-$15 a month just to report you to the credit report...you'll be saving them that $10-15 a month and giving them the balance.
Then, all of that activity only stays on your report for 2 years. It will still suck, but it will be far better that a BK. Also, you will have to put up with getting phone calls I'm sure, a lot of phone calls...but just remember that the people that try calling are told to scare you into giving them money.

Hope it helps.

I am a mortgage broker in texas and went through alot of training on how credit works and how they get to that score...also alot of business training. Alll of that has worked for others so I hope you can get your situation sorted out.

Answer 6

Yes, it follows you for 7 to 10 years. By now you should be thinking about the future (cars, houses, etc.), this will put a big black mark on your credit. You will not qualify for some loans and pay higher interests for other things. Most people make stupid financial decisions, but you need to find a way to pay them. It is much harder to file anyway.

Answer 7

Yeah, I think it is because you lose a lot of integrity esp if you can live w/out filing. People look up to those who do the right thing to get their lives in order. So even if no-one knows that you're broke, you'll be the one who can walk around tall because you know that you got your debt cancelled out by working it off not doing it the easy way out. People need to take responsiblity for their own actions. And it's you who will know inside yourself if you did the right thing or not.

Answer 8

it doesnt clean your slate. your creditors stop calling and harrassing you but everything still shows on your credit report PLUS the bankruptcy. try to start paying on the ones you can and take care to not acrue any more bad debts and eventually it will get better. Ive been working on mine for almost 4 years and i just recently got approved to buy a house. so hang in there.

Answer 9

ITS REALLY BAD!!!!

It seems easy now, but it will cripple you for years.

Many good jobs require a credit check, and a bad credit makes people leary of hiring you to handle business for them.

Consolidate, work hard, it won't be easy, but it's worth it to struggle a little. You'll grow from it, and feel better about yourself.

YOU CAN DO IT!!!!

Answer 10

Yes.
You will be marked for a very long time and no place will give you a house or car loan or any type of loan for that matter.