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Hello Everyone,
I am going through a massive crisis due to credit card debt & upside down real estate in LV & FL.
I am considering Bankruptcy to end this mess & start over. I am also married with children, scared of BK and still not 100% sure.
Can you be honest with me -Does anyone have any regrets of ever filing BK? Please let me know.
Thank you.
I filed BK in 2003 because I had personally guaranteed the debt of my company (over a million and a half dollars) and the time came to pay up when it failed. Several of my vendors offered to "forgive" the debt but that would have had serious income tax consequences. You should definitely contact and attorney to make sure that any arrangement you may be able to arrange with your creditors will not create a tax liability that will likely be non-dischargeable if you eventually DO file for BK. Personally, I have no regrets about my choice to file BK even though it was a hard choice to make. I think it depends on how much debt you have and the likelihood that you will be able to repay it. When I see folks choosing BK over $10,000 in debt, I have to shake my head. I think that is a poor choice if you are healthy and can work because creditors will let you pay that off for as long as it takes to avoid getting nothing if you BK. What will change that will make paying it possible? Can you make those changes without jepardizing your health, safety or relationships? Can you get some part-time work and apply all that money to the debt? Can you get a renter into your homes? For me, it was just easier to start over and try again in business. This time, it has been going very well. I have 727, 700 and 737 on my credit scores now - only 5 years after the BK. Last year at this time they were 584, 646, and 680. When the BK drops off, they will be even better. Keep in mind though that the BK itself is one stain but late payments are another. It is better to do all you can to keep everything current until you make this decision (which you may have already made by now). If you file BK without having late payments, your credit score will improve faster than if you have a BK and several delinquent accounts. I found this out from experience. Good luck to you!
I did chapter 7 in 1999. Business and medical. If I had it do over I think I would have done Chapter 13. If it does not work out you can always go to 7.
It has been a long hard climb back. now at 717 733 and 698 with perfect pay for the entire 7 years since I was able to get credit. Still my credit is affected and BK is 9 years old.
I believe with Chp 13 you pay a certain amount for so many years and you are done. It only stays on your CR for 7 years instead of 10. With my chpt 7 it wiped out everything even the IRS. I did pro se so it was not expensive.
Make sure you have a good lawyer.
Good luck
I agree with the other commenters; it really depends on your situation. It ended up being a good decision for me as I had just been laid off, knew I wouldn't be able to pay anything off for awhile, possessed virtually no assets of interest, and was in no immediate hurry - once the smoke cleared - to prepare for big ticket credit products like a mortgage. Further, I benefitted from some very lucky choices made during and since the BK. Probably the most fortunate was the decision to save three useful, zero-balance, clean credit card accounts from the "before" time, including a Chase card I wouldn't be able to TOUCH if I were applying for it right now, given the BK on my reports. These accounts made it so I could bypass a chunk of the usual "rebuilding" humiliation and hassle. Saved me time and trouble on the age front in particular.
Edited for grammar!
I think it's a very different environment now than it was when we filed in 05. I don't regret ours. My husband was out of work for an extended period and we were in foreclosure. I felt like, if we were going to lose the house, there was no reason to keep fighting and BK was the best answer.
We had planned to build a house next spring, but now won't be able to because of how the laws have changed for conventional financing. (Instead of 3 years from filing, you have to be 4 years from discharge.) They won't do piggyback loans either, so you need a larger downpayment.
We were able to get auto loans through Chrysler last year. Now, there is a shortage of lending money available and even people without BK are having trouble getting loans. Credit card companies are pulling back as well.
If you have income you will probably have to go CH 13. In the end, it may be the answer for you, but first, you need to figure out exactly how it will affect you. Where will you live? What will you be able to keep? We had a local landlord who agreed to rent to us despite our abysmal credit at the time... but we had to put down 4 months rent before we could move in... 3 months as a deposit.
Look into programs your state or county might have for people in your situation regarding the mortgages. That's a common problem right now and there may be help available. Maybe the bank will let you sell the property you don't live in as a short sale. (It's probably better for them than foreclosure.) If you can work out the mortgage side of it, then perhaps you can negotiate with the credit card companies.
BK is still there if all else fails, but don't jump in blindly.
Absolutely. One big one was knowing I had no other choice but file for ch7. While the discharge of debts was a major relief, the offset was the low score and some missed credit opportunities. For example, I moved and had to switch car insurance, and got higher premiums based on credit rating, some non-private apartment rental agencies wouldn't rent to me, and some lcar oans and credit cards I did receive after filing were at much higher interest rates.
Still, I was happy that I got the insurance, got the car loan, and got the credit cards. That's the optimism you must keep for yourself and the position you will be in for a very long time. More good news, is that you can rebuild and good people along the way will be willing to help you. Especially, and unfortunately, now that so many more people will no doubt be experiencing financial difficulty. Good luck to you.