topic Re: Do you ever regret filing bankruptcy? in Bankruptcy

Do you ever regret filing bankruptcy?

kittycreditmeow — Mon, 15 Mar 2021 00:55:36 GMT

I guess I'm feeling rather deep this evening and curious if anyone ever regrets filing or is it the best decision you get made?

I was discharged 16 months ago and I guess I don't really regret it but I also feel like I could have done more to fix my situation. Knowing what I know now, I wish I had not filed but it happened, it's done. Water under the bridge.

I filed because my wages were being garnished by Ally Financial for a $17,000 car. It was repossessed so I had a repo on my report. They sold it at an auction for $10K and sued me for the difference. I had a dozen collections and at least 7 or 8 charge offs. I didn't have a very great job or financial position then. Looking back I had no idea what I was doing and didn't know anything about rebuilding.

Fast forward to today, I still don't know everything about credit but I know a lot more than I did. I really don't think I ever would have learned had it not been for the bankruptcy. However, A lot of the stuff on my report prior to filing would of fallen off by now and for the amount of time it's taken me to rebuild to where I am, I just feel like I may as well have attempted to fix my credit. I know it's not a race but definitely wish I had known then what I know now.

So I guess I just feel like reading some personal inspiration stories. How has your journey gone thus far and are you happy you filed?

Re: Do you ever regret filing bankruptcy?

Horseshoez — Mon, 15 Mar 2021 01:25:36 GMT

Speaking strictly for myself, I had no option but to file; right around the time of the "Great Recession" my wife's Fortune-500 company imploded, wiping out high 7-figures of stock options, and I lost my main contracting gig. She opted to burn through our remaining retirement portfolio to start up a beautiful business catering to body/mind/soul wellness for women; the business was very well received by our community, got lots of press, had many customers, and was losing money to the tune of $5,000 per month. I ended up with first one, than a second well paying contracting gig, but I simply couldn't meet the financial needs of both the family and her business, so she shut it down and took a moderately paying job (basically a quarter of her salary from just a few years before). Had things stopped there, we could have recovered financially over a period of five or six years.

Unfortunately the story doesn't end there; a year or so after she took the new job, both of my contracts ended, one because that business unit got shut down, and the second because they wanted to convert my position to a Full-Time Employee, and they gave me first crack at the position. In desperation I took the position, albeit at a 47% cut in my monthly cash flow. Then the bottom fell out; I discovered my (then) business partner had launched a new niche business (I knew about the business), and had secured five separate lines of credit in my name, two "business lines of credit" with me as the holder of the LOC, and three other credit cards; the total debt was something over $150,000. Yeah, that tiny little straw broke not only my back, but the back of my marriage as well; we separated and she filed for a Chapter 7 for her personal bills and the remaining debt from her failed business.

In 2014 I interviewed a half-dozen bankruptcy attorneys, picked one, and started the process of filing, which happened in early 2015. My 60-month Chapter 13 was no picnic, especially when my (then) 16 year old Honda Accord succumbed to numerous types of corrosion almost simultaneously; imagine coming out to your car and seeing coolant, transmission fluid, brake fluid, and gasoline all leaking from the car at the same time. The repair bill was north of $3,000, and while that would have made the car road legal, I still would have had a car which leaked both into the passenger compartment and trunk whenever it rained. In the end I drained my meager savings and bought a new(er) 11-year old car to get me through the rest of my Chapter 13.

So, there's my tale of woe, but hey, I'm a "glass is half-full" kind of guy, and to be quite honest, I've never regretted filing for bankruptcy for a single second. Here we are, 8 years after my wife and I separated and our financial house collapsed; we're back together, her Chapter 7 has been discharged for 7-years, my Chapter 13 has been discharged for a year, and we have both money in the bank and rising credit scores. Our plan for next year, once my bankruptcy falls off, is to buy a new home (we lost the old one back in 2013), work for approximately nine more years, and retire happily ever-after in our early 70s.

In our case, I seriously doubt we could have survived those years without seeking bankruptcy protection, and even if we had survived, I'm sure we wouldn't be in anywhere near the enviable financial position we are in now.

Re: Do you ever regret filing bankruptcy?

DebtStinks — Mon, 15 Mar 2021 01:21:29 GMT

I just look at it from a financial aspect considering the money saved by not having to repay in full, settle, or get a 1099-C if none of the above are done. Yes, if you file CH7, the accounts will age off at least 3+ or so years before the BK itself falls off, but credit is not at all difficult to obtain after BK discharge. After 4-5 years, you can get just about any piece of credit from just about any creditor even with the BK on your record. Don't sweat it. On top of that, it's water under the bridge...just handle your finances as best you can going forward and (fingers crossed) you'll never be in that position to even consider BK in the future.

FYI, look at my signature. I've not done as well as some in the same timeframe post BK, but I think I'm a decent show of what can be done post BK. As well, even though it's not listed in my signature, I closed on a mortgage in September 2020 with a rate of 3.25% and no "unnecessary" closing costs/fees.

Best of luck!

Re: Do you ever regret filing bankruptcy?

Brian_Earl_Spilner — Mon, 15 Mar 2021 02:11:30 GMT

I regret not filing. Should have swallowed my pride instead of struggling for 7 years

Re: Do you ever regret filing bankruptcy?

sarge12 — Mon, 15 Mar 2021 02:58:24 GMT

@kittycreditmeow wrote:
I guess I'm feeling rather deep this evening and curious if anyone ever regrets filing or is it the best decision you get made?

I was discharged 16 months ago and I guess I don't really regret it but I also feel like I could have done more to fix my situation. Knowing what I know now, I wish I had not filed but it happened, it's done. Water under the bridge.

I filed because my wages were being garnished by Ally Financial for a $17,000 car. It was repossessed so I had a repo on my report. They sold it at an auction for $10K and sued me for the difference. I had a dozen collections and at least 7 or 8 charge offs. I didn't have a very great job or financial position then. Looking back I had no idea what I was doing and didn't know anything about rebuilding.

Fast forward to today, I still don't know everything about credit but I know a lot more than I did. I really don't think I ever would have learned had it not been for the bankruptcy. However, A lot of the stuff on my report prior to filing would of fallen off by now and for the amount of time it's taken me to rebuild to where I am, I just feel like I may as well have attempted to fix my credit. I know it's not a race but definitely wish I had known then what I know now.

So I guess I just feel like reading some personal inspiration stories. How has your journey gone thus far and are you happy you filed?

Interesting question...I do not regret either time I filed BK one little bit. My chapter 13 plan paid all my creditors 100%. My chapter 7 was my only logical choice. What I do regret is the financial irresponsible behavior that made filing necessary. It is somewhat shameful how irresponsible I was, and unfortunately it took a second BK for me to learn better. That is much different than regretting the filing itself. I would likely never have been able to dig myself out of such a deep hole otherwise. With monthly DTI over 80% it is almost impossible to recover without bankruptcy eventually being the result. The worst mistake people make is forcing themselves into bankruptcy by irresponsible credit behavior. The second biggest mistake is waiting too long to file when filing is the only logical recourse. If forced into BK due to medical issues or job loss despite your best efforts, you should regret nothing. That was not the case with me, I put myself in that position, and only I was to blame. My ex-wife may have pushed me there on the chapter 7, but I could have, and should have said no to her desires. The marriage failed anyway because I could not spend enough to make someone love me that clearly did not.

Re: Do you ever regret filing bankruptcy?

Bankrupt2019 — Mon, 15 Mar 2021 03:45:17 GMT

@Brian_Earl_Spilner wrote:
I regret not filing. Should have swallowed my pride instead of struggling for 7 years

^^^^THIS^^^^ Times infinity

Re: Do you ever regret filing bankruptcy?

sarge12 — Mon, 15 Mar 2021 03:54:10 GMT

To expand on my post, here are my credit rules since I learned the hard way.

1) Never go in debt that I do not have the ability to pay off, for anything except necessities...house, car, medical, etc.

2) If the choice is between a want you do not have savings for...vacation, TV, entertainment, etc....and doing without, do without.

3) Credit cards are for convenience, rewards, and increasing credit scores. I never buy anything with a credit card I do not have the money to pay for elsewhere.

4) I always PIF unless taking advantage of a 0% interest offer, and even then the money must be available to PIF.

5) Never let credit cards cause me to live beyond my means.

6) Never, ever, pay a penny in credit card interest, and only pay an AF if the benefits exceed the AF amount.

7) Always maintain emergency funds for unplanned for expenses. Cars need repairs, Appliances will eventually need replacement. Roofs will also need replacing. These expenses are not unexpected, they are a certainty if you live long enough. They are often unplanned for, so maintain savings to cover them.

8) Credit cards are a lousy, high interest, resource for emergency funding of unplanned for expenses. Do not put yourself in position where debt is the only choice when the fridge goes out, or car breaks down.

9) If increased debt load results from unplanned expenses ever, that is a problem I must address. That is not likely in my situation, as I have about 400k in savings available.

10) I do not spend more than I have income. Doing so on a regular basis is unsustainable.

11) If ever a matter of life or death for me or my family, any and all these rules can be broken.

Re: Do you ever regret filing bankruptcy?

kittycreditmeow — Mon, 15 Mar 2021 09:42:14 GMT

@sarge12

That is great advice to live by. I'm going to apply it.

Re: Do you ever regret filing bankruptcy?

kittycreditmeow — Mon, 15 Mar 2021 09:43:36 GMT

Thank you all for sharing your stories, these are so inspiring and helping me look at this from a new perspective.

Re: Do you ever regret filing bankruptcy?

Anonymous — Mon, 15 Mar 2021 12:09:22 GMT

No regrets here!!!! It was the best thing for me. Actually it's my second time filing bk. The first was when I had a really tough pregnancy and couldn't work...the other was when I got divorced recently and took all the marital debt so my ex would agree to the divorce.

Looking back, both times was absolutely necessary. I know a lot more about rebuilding this time around so it went rather quickly for me.

I will say, now that I know life can hit you hard pretty frequently, I've made the personal decision to not be in debt but to use credit for an intended purpose. I don't spend money unless I have it in cash sitting in the bank and free of encumbrances. I invest in stocks and an building a real estate portfolio with a friend, a very trustworthy friend.

I will never trust anyone with my credit. I don't think I'll marry again but they will never get my credit info like my last spouse did.

Ive learned a lot and have taught my children the things I have learned about credit and building a legacy...if I hadn't have had to file bankruptcy the 2nd time around I don't think I would have woken up to being financially free...the 1st time my ex and I filed bankruptcy we were just so happy to get free of debt we stopped using credit entirely but that wasn't helpful either, now I know you have to change your entire mindset about money and wealth.

So there you have it...my life lessons:

-Don't live like the Jones, they probably are one or two pays away from homelessness,

-build a legacy, invest in stocks you believe in like companies you already use,

-make your first real estate purchase a multi family or a 4 suites live in one rent out the other (you can get FHA financing on a 4 suites as a owner occupied property),

-Don't spend money on credit cards or get loans as a means to live,

-If you find that after paying your monthly bills you don't have much left get a side hustle for extra income, startup is low and it may be something you really enjoy doing.

Hope this helps someone, it's everything I should have been told as a kid.

Re: Do you ever regret filing bankruptcy?

Shooting-For-800 — Mon, 15 Mar 2021 12:29:44 GMT

I think most people regret not filing sooner.

Re: Do you ever regret filing bankruptcy?

angelofmusic86 — Mon, 15 Mar 2021 19:29:43 GMT

@Shooting-For-800 wrote:
I think most people regret not filing sooner.

+1 to this. That's my biggest regret with BK.

Re: Do you ever regret filing bankruptcy?

sccredit — Mon, 15 Mar 2021 20:47:05 GMT

In my case I didn't have a choice. I was a partner in a business that went under. I was Personally Guaranteed on seven figures of debt, had roughly $300k in credit cards and credit lines that I used for the business and was facing multiple lawsuits. I could have won the lawsuits but I couldn't even afford to defend them. The business closed and I was out of a job along with about 100 employees. Our house had a lot of equity so it was sold by the trustee but all in all I can't say I regret filing. I regret ever getting into that business but that is a whole other story.

Re: Do you ever regret filing bankruptcy?

Anonymous — Tue, 16 Mar 2021 03:50:05 GMT

Only in regard to obtaining a mortgage in 5 years...also I wish I had paid down a few debts to avoid burning some companies I'd like to re-establish with sooner. Otherwise, nope. Only regret not doing it sooner!

Re: Do you ever regret filing bankruptcy?

Anonymous — Fri, 19 Mar 2021 00:20:24 GMT

Yes I do every day. 😢

Re: Do you ever regret filing bankruptcy?

Horseshoez — Fri, 19 Mar 2021 00:46:03 GMT

@Anonymous wrote:
Yes I do every day. 😢

Any particular reason?

Re: Do you ever regret filing bankruptcy?

kr43002 — Sat, 20 Mar 2021 07:44:21 GMT

So I might be the odd ball in stating that I do regret filing. I honestly could have kept fighting, but the recovery would have been so hard, and I would be forced to live in a toxic environment for at least another year. The only thing that kept me fighting for so long is that I wanted to keep my discover card. I know I can get back in with them again in a year or two but I honestly hate that I walked away from the debt I accumulated on that card. I spent the money, full well that I may not be able to pay it back in the terms i agreed to. They were the first to reach out and come to an agreement. They took off the late fees and lowered my interest rate, put me on a 12 month hardship plan that made it where I didn't have to worry about them with the payment being cut in half. Now I guess that isn't really regretting the bankruptcy, but instead regretting burning discover because of the bankruptcy. I have heard of people paying off NFCU to get back in good graces with them, just needing to wait until after the bankruptcy is closed and some time after just to make sure it doesn't come back on you. I may just pay back discover the 2k. I know that would be stupid as they are pretty friendly with bk's even being burned, and this of course will probably never happen.

Re: Do you ever regret filing bankruptcy?

Anonymous — Sat, 20 Mar 2021 07:54:04 GMT

Nope. I regret not learning about finances, budgeting, and credit beforehand but not filing bankruptcy. To be honest high school should have a course where you read MyFico forums for an hour each day. I would have learned so much more in school.

Re: Do you ever regret filing bankruptcy?

Horseshoez — Sat, 20 Mar 2021 12:14:54 GMT

@Anonymous wrote:
Nope. I regret not learning about finances, budgeting, and credit beforehand but not filing bankruptcy. To be honest high school should have a course where you read MyFico forums for an hour each day. I would have learned so much more in school.

LOL, yours is the second such comment I've seen here over the last three or four weeks and both gave me a good chuckle. In my case, the internet, myFICO, and the whole FICO scoring model didn't even exist yet when I was in high school, nor would they for at least a decade and a half.

The above said, your point is well taken; education on personal finance in high school should be mandatory.

Re: Do you ever regret filing bankruptcy?

jmw1 — Sat, 20 Mar 2021 16:40:26 GMT

@kr43002 wrote:
Now I guess that isn't really regretting the bankruptcy, but instead regretting burning discover because of the bankruptcy. I have heard of people paying off NFCU to get back in good graces with them, just needing to wait until after the bankruptcy is closed and some time after just to make sure it doesn't come back on you. I may just pay back discover the 2k. I know that would be stupid as they are pretty friendly with bk's even being burned, and this of course will probably never happen.

Like you mentioned, there is nothing against the law about paying back certain discharged debt. Would I do it? Absolutely never, ever. They charge insane interest rates to cover for the risk of default so Discover and all of the other banks knew what the risks were (including being burned in BK) when lending you money. It's just business. Now if grandma was a creditor you burned in BK, that's a whole different story.