Filing Bankruptcy – Should I Declare Bankruptcy?
Sometimes people consider bankruptcy to be an easy option to free themselves from the burden of mounting debt. In fact, rather than addressing the root of the problem this the first option that comes to their mind. The truth is that this may eliminate the burden but its not an easy thing to do. Furthermore, bankruptcy should always be your last option.
At first glance it may seem that the filing process for bankruptcy is very easy. But, its not that trivial. The justification for your filing will begin with showing your financial history to a judge and it will also be open to any objections that your creditors might have. More than likely, your creditors will fight tooth and nail to get their money back rather than willing to settle.
In the event that you actually are able to file bankruptcy successfully, you should consider the effects of this action on your future.
Credit cards with any balances outstanding will be lost while some other creditors will close your accounts. Getting a large credit line or a home loan at an affordable interest rate will be near impossible.
You will still owe debts such as taxes owed from the past 3 years, student loans, and any others which are exempt from bankruptcy protection.
How long will this last you ask? Ten years! During these ten years, you will have to maintain a spotless credit history to get a level where creditors can trust you to a certain degree. On your credit history, the bankruptcy will stand out as the most negative criterion. This is much worse than a low FICO score.
These are the effects of your credit. Besides these, you could have to give up any other assets depending on when you got them. You will not lose your house and your car in most states. However, if you have additional vehicles or real estate these might not be protected.
Don’t forget that this procedure of filing bankruptcy is not free. There will be costs associated with the courts and of course your attorney is also going to charge you. These costs will only compound your financial misery.
All is not lost. You will be able to obtain some breathing room to start the recovery process of your financial situation. Your debt collectors will stop bothering you. If they don’t notify them of your filing. Any actions of foreclosing your house will stop. If you are contemplating filing bankruptcy, you will be better off by filing sooner than if its too late. The sooner you file, the sooner you will be on your way to rebuilding your credit history (perhaps better than the one you built last time around).
Now that you won’t have credit cards this might be a blessing in disguise. You will have another opportunity to change your spending habits.
Do your due diligence before you take the big step. Good luck!
Mike Singh
http://www.articlesbase.com/non-fiction-articles/filing-bankruptcy-should-i-declare-bankruptcy-125602.html
15 Responses to “Filing Bankruptcy – Should I Declare Bankruptcy?”
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i have around $8000 in debt on my credit file.If i declare bankruptcy will i be able to get a credit card?
how long will it take to get credit if i file bankruptcy?I don,t want to go into a part 9 agreement.Is there any other options?
probably 7 years.
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<a href="http://www.bestcreditrates.nethttp://www.bestcreditrates.net<br />References :
It takes 10 years to get bankruptcy off your credit report
you can get a credit card right after its discharged in court
but it will have to be a secured one- meaning you give that bank xxx $ to get xxx amt for credit
in time- maybe 5 years you will offered more credit, and will be able to get a loan with is not as high of interest rate as it will be when you first become bankruptReferences :
Why would you want to take out another credit card, if you can't finance the first one? It's unlikely that you will be extended an unsecured credit card before 7 years after the bankruptcy, if you file for Chapter 13 (10 years if you file under Chapter 7). So you would need to manage with debit cards and checks. Which is actually possible.References :
Yeah. About 3 months after the bankruptcy, you'll start getting credit card offers in the mail. All sorts of them. Most of them will be small credit limits, around $300 or so. Their interest rates will be from 18% to 26%. Every card you apply for, you'll get a nasty ding on your already wrecked credit rating, so choose carefully. If you're looking to rebuild your credit, just get one card. Don't max it out, and pay more than minimum payments. Capital One credit cards will screw you blind with late fees and overlimit fees and yearly fees, so stay away from them. Orchard Bank, the same way. You can rebuild your credit but paying on time and paying more than the minimum will give you a slightly better edge on doing so. My bankruptcy was 10 years old this spring and was supposed to go off my credit file, but none of the three credit agencies has bothered to remove it yet. This tells me that I'm going to have to contact them myself for this removal, so be aware that you might have to do this also, down the road.References : Personal experience.
The same thing happened to me I had to wait 6 years until it cleared from my credit check, I think your best bet is to call the credit card company tell them you can't afford the re payments and they have to come up with a plan for you to be able to pay them back at a low amount this will keep your credit good the credit card don't mind if you can't afford it as long as you let them know and arrange a long term way of paying them back, this won't look bad on your credit ratingReferences :
it really depends on how bad your credit is, before you start thinking about filing. $8000, is something you should be able to set payments up with. Or get a personal loan to pay it off, and have smaller payments to clear up your debt.
E-mail me if you need more help.References :
There are comanies that offer cards to past bankruptcies. But your interest rate will be massive. Better to work with one of those credit counseling agencies that stops the interest on your old debts, and pay those off. Sounds like you don't need any more credit anyway.References : Been there, done that. Paid off about 10K, lived on cash only, just got a newer vehicle, and a mortgage, and paid off the old stuff. It feels SO-O-O good!!!
If you file for bankruptcy you will have to wait 7 years for:
-any loans …. car loan, credit cards, store cards, mortgages
Then you need to try to re-establish your credit. It doesn't guarantee that you will get it once you have been released.
You would be much better off to cut your credit card up, talk to the credit card company, and make monthly payments.References :
good thing is, that 8000.00 is not a lot of money. that is not the pee-ant kind of money that you file bankruptcy for. you need to negotiate, or pay it off. negotiations should be done with a debt consolodation center, or make payments to the lender. i know for a fact that almost anything that has already hit a collection agency, is negotiable, just because they think youre a flight risk, and they would rather get something than nothing. but dont screw up your next 7-10 yrs by filing bankruptcy. get a phone book, and do some research, and you can fix your credit pretty fast, and maybe chaper than what you owe. but another credit card is the wrong answer, thats the reason that you are in this mess. suggestion, use "your" money to pay until you become a little more responsible, like a checking or savings account, or just cash or prepaid credit cards.References :
No you usually have to wait 7yrs to reestablish your credit
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Seven years. Your better off getting off your lazy behind and getting a part time job to pay it off.
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not for a while, atleast 7-9 years before it comes off your credit report. sorry
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Don’t ruin your credit life for $8,000 – figure out a way to pay it off.
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I declared ch 7 and it has been discharged for two years. I’ve since been approved for a mortgage, two cars, and several credit cards. I’ve also finished school so I have the money to pay for them. People will pretty much give you anything, but remember this…. Your will always be raped with interest charges, fees, etc. anything on you credit stays for 7 years, including bankruptcy. I also had a lot more debt than that. I would try and pay it off first.
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