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 Posted: Wed Mar 12, 2008 5:50 am |
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(Credit goes to moneyandcredit.blogspot.com and thanks to Lisa for forwarding it through email)
(email from Lisa)
Hey all! I wanted to share it with all of you. however, I really do not want to break any forum guidelines.
It all happened a few days back when I was searching for a query on bankruptcy and credit card that I happened to stumble upon a blog called moneyandcredit.blogspot.com.
I mailed that blogger my question that whether a discharge in bankruptcy will wipe away my credit card debt or not? You know I had read some posts in our forums that even after filing bankruptcy people found out that their debts were still being reported.
I asked him my doubts and he replied me.i want to share the reply he gave me:
| Quote: | A discharge in bankruptcy will wipe away your credit card debt. This means that you will no longer be obligated to repay and the credit card company(ies) are forbiden from ever attempting to collect the debt from you.
Any credit cards that you have now with balances that are discharged in bankruptcy will be closed by the credit card company and you will no longer be able to use them.
However, after the bankruptcy is complete, you may be able to obtain a secured credit card from a bank or credit union. You might may be able to obtain a traditional 'unsecured' credit card, but the limit will be quite low and the interest rate will be very high.
A secured credit card is a 'traditional' credit card with a twist. You deposit money in a financial institution and grant that institution a security interest in your deposit in exchange for the credit card. The financial institution will hold the money that you have on deposit just in case you were to default on the credit card. If you were to default, they would take the money on deposit to payoff the balance on the card and close the account.
For example, you deposit $500 in a savings account at a credit union, the credit union puts a 'freeze' on the $500 and issues you a credit card with a $500 limit.
A secured credit card after bankruptcy is really a good way to go. You get a managable credit line at a reasonable interest rate. This is a good way to rebuild your credit after bankruptcy.
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(Credit goes to moneyandcredit.blogspot.com)
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Denny
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Shazzers
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| Posted: Thu Mar 13, 2008 2:37 am |
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Great information! Thanks Lisa, for posting it in the forums.
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sunrise_flower
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| Posted: Mon Mar 17, 2008 6:25 pm |
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I filed for bankruptcy in 2000 and I remember when I was at the hearing in the courthouse, there were multiple credit card companies there waiting to talk to people who were filing bankruptcy. I remember specifically that the creditors were Sears, CapitalOne, and Orchard Bank. There were others there as well but I don't remember the names.
What was the purpose of the creditors being there if the debt is just going to be discharged?
-D. Garrido
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dustin_garrido
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| Posted: Mon Mar 17, 2008 7:05 pm |
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When you were at the hearing, it is a meeting of the creditors. They have it so the creditors can be there and see whats going on and ( I don't know how to say this  ) dispute the BK and see if there is any way that they can get some of thier money. With most of the BK filings you will not see any creditors showing up, because with most people it is a lost cause because they don't have much.
Lisa, I had some problems with some creditors after I filed for BK. Some still reported on my CR and some were still trying to collect from me even after it had been discharged. All I did was call my lawyer and he took care of all of that for me.
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puddlejmpr
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| Posted: Sun Jun 08, 2008 4:45 pm |
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When I filed bankruptcy in 1997, my attorney asked me if I had any accounts with those or a few others specifically becasue they WOULD show up at the hearing and try to dispute the BK. INteresting that since then Sears has sold their Credit Card business to Citibank (you may have a Sears Chsrge account, but its really a Citibank account). Capital one and Orchard bank (and a few other slime balls) specialize in preying on those with spotty credit histories. They take the gamble, but hate to loose.
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LCW
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| Posted: Sun Jun 08, 2008 6:08 pm |
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The laws have changed within the last year for Chapter 7 and 13. I believe even in a Chapter 7 you need to take a means test that is set up to see how much you can pay back your creditors or to see if you can pay at all. A few years ago, a Chapter 7 wipped out most if not all of your debt for a new start but the credit card companies and Banks who are affiliated with our most high goverment and the laws went to their favor...go figure.
Luke
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Lukeskywalker
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| Posted: Fri Jun 13, 2008 6:46 am |
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You are 100% correct Luke.
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ladybug
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| Posted: Fri Jun 13, 2008 7:26 am |
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The means test is designed to decide which chapter you are eligible to file.
If you are able to pay back a portion of your debts, you will be required to file chapter 13.
Chapter 7 still wipes out all your dischargable debts.
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goudah2424
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| Posted: Fri Jun 13, 2008 2:21 pm |
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Thank you ladybug, thats nice. goudah2424, you are wise.
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Lukeskywalker
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| Posted: Wed Jun 25, 2008 9:30 pm |
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When you say it wipes out all your debts, does that mean that they come off your credit report? How does that work?
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| Posted: Thu Jun 26, 2008 6:44 am |
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No, they don't come off your credit report, you just don't owe the money anymore. Your credit report will show that the debt was discharged in bankruptcy.
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goudah2424
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| Posted: Thu Jun 26, 2008 7:46 am |
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So it falls off at the normal date still though right? Like one says it will be removed in OCT. 2010.
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