How can bankrupcy?

Question

How can bankrupcy give you a fresh start in credit? You hear all these tales that failing will give you a fresh start, is that true? And how?

Answer 1

It can give you a "fresh start" if you want to call it that, by getting rid of most of your debt. Not all debt is covered under bankruptcy though. If you owe the IRS or any state tax agency, you're still going to owe it. Also, Student Loans are not covered.

Having said that, under the new bankruptcy laws, it's not so easy to file any more. The bankruptcy court will still make you make payments towards your debt if they deem you have the ability to do so. About the only thing you'll accomplish is to get the creditors to stop calling you for payments and you'll likely be in debt for a long time until the court discharges the debt. You will also mess up your credit rating for at least 7 years after

Before you can file, you have to go through credit counseling (under the new law). To find an approved credit counselor, click the link below. If the counselor deems that you can make payments, you'll be making payments.

Answer 2

You can only declare bankruptcy once every 7 or 10 years. In addition the bankruptcy laws changed, so you'll always end up paying something. People consider it a fresh start because it wipes out the debt, somewhat. Even though it stays on your credit for 10 years, creditors believe that the second time around you, hopefully, won't make the same mistake. In addition they know you can't declare bankruptcy again anytime soon.

My credit was awful. Instead of declaring backruptcy (I didn't want it on my credit for 10 yrs) I waited the 7 yrs for my stuff to fall off. I also challenged everything negative on my credit reports. I did this on December 2nd. The reason was because credit burreaus have 30 days to get an answer from the particular lender, if not they have to take the item off your credit report. If you do it around the holidays, most employees take many days off in December (Christmas and New Year's). It's not honest, but this cleared up 99% of my credit.

Another thing you can do, so you don't get the calls from creditors, is get a voicemail and always give out that number as a contact. Never give out your real phone number. That way you're never bothered by anyone.

Answer 3

no... it will destroy your credit and make lenders never want to talk to you again...

of course it is better not to talk to lenders...

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