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Claiming Bankruptcy - keeping some credit cards

Established Contributor

Re: Claiming Bankruptcy - keeping some credit cards

Here's an example (my own) of when bankruptcy really is an advisable solution. In the summer of 2014, I was facing huge (5 figures) repair bills for severe water and mold damage to my condo caused by a broken and leaking hot water heater that insurance wouldn't cover because the damage had been ongoing for so long, hadn't worked reliably full-time in nearly four years (from 2010) because the contract I was working most regularly on had ended (not to mention that I was about to become effectively unemployed due both to the contract I was still getting some work on ending and that my employer was getting into severe trouble with the Federal Government which resulted in its going bankrupt by the end of the year - Google "USIS" for the full story; hint - Edward Snowden), I'd been subsisting on SSDI since the beginning of 2012, not to mention that I had made some very bad financial decisions over the years (lack of education on credit leading me to bad credit-card practices, an ill-advised mortgage refinance in 2005 that didn't include a tax escrow account which led directly to a really bad mistake when I took out a personal loan in 2008, was talked several months later into doubling that debt by taking out another personal loan, and then - guess what - my employer ran out of work for me to do and I was furloughed for over three months which ate up all my cash reserves). In short, by July 2014 chapter 7 bankruptcy was the best way out for me going forward.

 

If you're not in a mess nearly as bad as I was in, think and then think again about whether you really need to file BK or whether there's a less drastic alternative.

Ch 7 BK discharged 12/14, well along in rebuilding credit. FICO 12/1/17:TU 663/EX 697/EQ 688 FICO 8 (Aug 2017) or 680 FICO 9 (Penfed Sep 2017), VS 3.0 12/1/17: TU 699/EX 687/EQ 693. $32.3K revolving credit as of 11/7/17; $951 Cap One secured Platinum MC, $2000 Apple FCU Platinum Visa,$3500 Amazon Prime Store Card, $3500 Walmart Store Card, $3500 Cap One Quicksilver MC, $3600 Discover It, $4000 Care Credit, $4300 Overstock Store Card, $7000 Penfed Power Cash Rewards Visa, $10k PenFed used car loan, $5k Navient student loan. In the garden again from 10/26/17 for at least the next 3 months unless I get a really really good preapproval.
Message 11 of 12
Frequent Contributor

Re: Claiming Bankruptcy - keeping some credit cards

When you file bankruptcy, you can't pick which accounts to include.  You report all accounts and they almost always close them.  That's what they do for Chapter 7.  Are you looking at 7 or 13?  You will proably be able to keep paying your vehicle.  I dont know about a second vehicle since I only had one.

Message 12 of 12