Filing for bankruptcy

Sometimes BK is not a good option, you can wind up in more trouble than you are now. First, Wellcome to the site and please tell us what state you are in. We know of many debt consolidation programs that can help you with your debt and your credit will be ok more so than with a BK. Relax, you have come to the right place.

Thank you

Bankruptcy will allow all the debts to be discharged but the negative effect will stay on your credit for ten years. You will have to list all your creditors and the property which will be liquidated in the filing process. Before you consider this step as your final option, look into debt consolidation or settlement with your creditors. They might agree on a lower repayment plan and you won????????t need to file for bankruptcy.

Hi Bethany

Though bankruptcy will make you debt free, but it will leave a derogatory mark on your report. It will stay there for ten long years. Bankruptcy should be your last option. Why do not you opt for debt consolidation or settlement?

take everyone's advice. With the new bk laws it is makeing it more difficult to do a bk. talk to a professional first so you at least know what your options are.

ladybug :roll:

Hi

Thanks for all the advice. But I????????m under tremendous pressure from my creditors. And I have heard that when a bankruptcy is filed, under the law creditors must stop all the attempts to collect the debt. The creditors cannot write, call or sue you after you have filed for bankruptcy. Is it all myth?? I????????m confused!!!!!!Can anyone tell me about the real truth. What exactly is BANKRUPTCY???

Bethany -

I could spend pages and pages discussing the various aspects of the different chapters of Bankruptcy, but I'll try to keep it brief and to the point.

Before you file any chapter of bankruptcy, your attorney will perform a "means test" on your income. Depending on where your income falls compared to the median income in your area, you will file either Chapter 7 or Chapter 13 Bankruptcy.

Chapter 7 is a total elimination of your debts. However, in Chapter 7, the Trustee of the court is bound by law to liquidate certain assets you have in your possession in order to repay at least a portion of your debts prior to discharging the rest of them. There are exemptions in every state for a certain percentage of your assets, but you could potentially stand to lose your home, car (or extra car if you have one) boat, camper, investment property, etc.

Chapter 13 is called the "wage earner plan" - and for good reason. If you have a job, and the means test determines that you can repay even a portion of your debts over the course of 3 or 5 years, (and you don't want to lose your assets or need to save your home from foreclosure), you will file Chapter 13 Bankruptcy. In most cases, the plan payments will be taken directly out of your paycheck and sent to the Trustee, who will then send them to the creditors until your plan ends.

Chapter 7 stays on your credit report for 10 years, Chapter 13 stays on for 7 years.

You DO have a choice in which Chapter you file for, but you have to keep in mind the repercussions of each one - Chapter 7 will cause you to lose your assets, but will eliminate your debts fairly quickly - Chapter 13 will allow you to keep your assets, but will place you in a payment plan that will last up to 3-5 years and will greatly reduce your income for that time (during which time the NEW bills will still roll in and need to be paid - doctor bills, car repair bills, home repair bills, etc.). All this needs to be considered.

Bankruptcy does have new laws, however it can still be completed with hardly any extra effort. Basically if you are the average JOE, then your income more than likely will fall under the median guideline and you will have to take a total of 3 hours couseling online! Pre-Petition counseling and Debtor education, which was very interesting in my opinion. :D

The other thing is, MOST of your items will be exempted, however if you have thousands and thousands of dollars of equity in your home and own a paid off vehicle worth several thousands of dollars, then you ARE at risk of losing them.

Unlike us, we have no equity in anything and we kept everything with our chapter 7. Our credit scores got better after we filed the BK, because all the negatives of charge offs were erased and IIB. If you are making payments on your home and vehicle (that you keep, this also will increase your credit score). Keep in mind that the bankruptcy does show on your credit report for 10 years legally, however 2-3 post BK, creditors could care less about the BK. They are looking at your INCOME, and your current accounts that are being paid.

So, the fact of filing BK is not the key factor here, it is what you do after your BK. Pay your payments on time and don't get yourself back into that same situation.

ps...don't waste your time with a settlement company, like we did. They legally rob you blind! I would check into the consolidation program, it won't hurt. At least you will still be paying on your cards and it won't be showing charged off status. If it don't work out for you, no problem...there is always ch.7 BK. GOOD LUCK. :lol:

Hi Bethany

I agree with Linda, it is what you do after bankruptcy that matters. A bankruptcy though stays in your report for say about 7 to 10 years, but its effect on your score starts diminishing from the day your case is closed. Bankruptcy is not a stigma anymore, what matters is how you can restore your score. Always remember that there is nothing permanent in the credit industry. The most important factor that influences your score is whether you are paying your recent bills on time or not. A 5 year old bankruptcy wont affect your score as much as a 2 month old delinquent account would do. So, pay your bills on time and use credit wisely.

Thanks for all the above suggestions. You all have been so helpful. It is really a tough time for me....but im sure I will be able to get out of it. I just need all of your love n support

Thanks all of u

Hi Bethany

Do not worry, we all r there with u. I know filing for bankruptcy is not an easy job. But do not worry, life is all about ups and downs. If you have decided to file for bankruptcy then in my opinion consult a reputed attorney.