topic Re: Bankruptcy vs Missed Payments in General Credit Topics

Bankruptcy vs Missed Payments

difringe — Mon, 31 Dec 2018 02:56:08 GMT

Just a random question; I look around the forum and see all sorts of approvals for people who've filed for bankruptcy. I guess the point of bankruptcy is to basically say "hey I can't pay my debts, please wipe them," but I'm curious as to why it sometimes seems like a bankruptcy has a lesser effect on your ability to get a credit card than missing payments on a loan or something?

Re: Bankruptcy vs Missed Payments

Anonymous — Mon, 31 Dec 2018 11:56:51 GMT

I am going to avoid being too specific but:

One reason is that if you go through bankruptcy that can place constraints on your ability to discharge debt again within a given timeframe.

Re: Bankruptcy vs Missed Payments

difringe — Tue, 01 Jan 2019 03:02:49 GMT

Thanks for the response! We all come here for information and guidance, so I wasn't trying to sound like I'm coming from a judgmental place. Life happens to all of us, I was just genuinely curious about the discrepancy that I see on here. It kinda goes against my logic? But I also don't have the complete picture on what bankruptcy all entails; so basically what you're saying is bc you can't declare bankruptcy again for a while, you're a more trustworthy customer to a creditor?

Re: Bankruptcy vs Missed Payments

Pikaboo-icu — Tue, 01 Jan 2019 04:14:41 GMT

@difringe wrote:
Thanks for the response! We all come here for information and guidance, so I wasn't trying to sound like I'm coming from a judgmental place. Life happens to all of us, I was just genuinely curious about the discrepancy that I see on here. It kinda goes against my logic? But I also don't have the complete picture on what bankruptcy all entails; so basically what you're saying is bc you can't declare bankruptcy again for a while, you're a more trustworthy customer to a creditor?

I imagine that's part of it.

The other things is: there are different types of BK. With a 13 (I think) it's a reorganization and most of the debts get paid..

I don't know that much about it but there's chapter 7, 11 & 13 that I know of and I believe it's only 7 that completely discharges debt.

I could be wrong LOL I've not read up on them to be honest.

Re: Bankruptcy vs Missed Payments

FireMedic1 — Wed, 02 Jan 2019 00:41:51 GMT

You may also ask why do major corporations file for bankruptcy protection when they cant pay their bills. Just like us little people. GM being one of the biggest. We had to do it. Everyone has their own story. And just like credit scores. No BK is identical. The Chapter might be. But all the specifics are different for each person.

So I can't apply for the top tier BEST cards for 10 yrs. No Chase, BoA, Citi, and so much more that regular people with great scores can w/o a BK. I may have pretty decent scores. Though it wont go much higher than that. But I am still locked OUT from many things due to the BK. Like many companies that did file for protection came out ahead and stayed in business. As a little guy. I survived and and have build back my personal credit with whats available to me as a BK recipient.

Then you have to live with it in the back of your mind that you had to do it in the first place. Which isnt easy to admit to. On here its easy. In real life. You want to hide it. So it isnt peaches and cream.

Re: Bankruptcy vs Missed Payments

difringe — Wed, 02 Jan 2019 15:38:55 GMT

@FireMedic1 wrote:
You may also ask why do major corporations file for bankruptcy protection when they cant pay their bills. Just like us little people. GM being one of the biggest. We had to do it. Everyone has their own story. And just like credit scores. No BK is identical. The Chapter might be. But all the specifics are different for each person.

So I can't apply for the top tier BEST cards for 10 yrs. No Chase, BoA, Citi, and so much more that regular people with great scores can w/o a BK. I may have pretty decent scores. Though it wont go much higher than that. But I am still locked OUT from many things due to the BK. Like many companies that did file for protection came out ahead and stayed in business. As a little guy. I survived and and have build back my personal credit with whats available to me as a BK recipient.

Then you have to live with it in the back of your mind that you had to do it in the first place. Which isnt easy to admit to. On here its easy. In real life. You want to hide it. So it isnt peaches and cream.

Yea, again, not coming from a judgmental place. I understand that sometimes it's the move that you have to make. I'm also not saying it's easy to deal with in real life. I'm strictly speaking on this from the credit card companies' perspective. From what you're saying, you aren't able to get the best of the best cards, but the Venture and Savor are pretty solid cards, so I'd say you've done a great job recovering and rebuilding your credit.

I guess I'm wondering two things; how badly does a BK (let's say a chapter 7) hurt your scores (could be a range), and when they look at a BK, is that as bad as seeing a collection (paid or unpaid) or multiple missed payments, etc?

Re: Bankruptcy vs Missed Payments

kugel — Wed, 02 Jan 2019 16:24:18 GMT

Bk is not a good choice if u can find a way
To pay the debts but if u can’t pay it and its a really high amount the debts than yes bk is the choice
the downside is it takes time to rebuild back credit unless u really know how to do it
I filed less than 3 years ago and I am now at 180k in available credit ,

I do I do believe that the whole system is crazy because the banks instead of to ruin your credit when you owe money with placing collections and judgments they should come up with a different solution and help you out to pay it and not stain your credit report
so they don’t get the customer to file bankruptcy and not get paid even a penny And whoever ends up loosing is the bank

Re: Bankruptcy vs Missed Payments

difringe — Wed, 02 Jan 2019 19:36:37 GMT

@kugel wrote:
Bk is not a good choice if u can find a way
I do I do believe that the whole system is crazy because the banks instead of to ruin your credit when you owe money with placing collections and judgments they should come up with a different solution and help you out to pay it and not stain your credit report
so they don’t get the customer to file bankruptcy and not get paid even a penny And whoever ends up loosing is the bank

This is the part that I'm struggling to understand. Under some bankruptcy chapters, you don't have to pay the debt, right? So they don't even get the money but then they give you credit again?

Re: Bankruptcy vs Missed Payments

Anonymous — Wed, 02 Jan 2019 19:39:38 GMT

@kugel wrote:
Bk is not a good choice if u can find a way
To pay the debts but if u can’t pay it and its a really high amount the debts than yes bk is the choice
the downside is it takes time to rebuild back credit unless u really know how to do it
I filed less than 3 years ago and I am now at 180k in available credit ,

I do I do believe that the whole system is crazy because the banks instead of to ruin your credit when you owe money with placing collections and judgments they should come up with a different solution and help you out to pay it and not stain your credit report
so they don’t get the customer to file bankruptcy and not get paid even a penny And whoever ends up loosing is the bank

You would think they would take something over nothing. Most of the time if you file for a BK they get nothing (Though with a Chapter 13 they usually get some of the money). If they work with you maybe they can get some now and the rest later but they end up just writing it off (I think they do that) so I guess it doesn't matter to them.

Re: Bankruptcy vs Missed Payments

Remedios — Wed, 02 Jan 2019 19:42:49 GMT

@difringe wrote:
@kugel wrote:
Bk is not a good choice if u can find a way
I do I do believe that the whole system is crazy because the banks instead of to ruin your credit when you owe money with placing collections and judgments they should come up with a different solution and help you out to pay it and not stain your credit report
so they don’t get the customer to file bankruptcy and not get paid even a penny And whoever ends up loosing is the bank
This is the part that I'm struggling to understand. Under some bankruptcy chapters, you don't have to pay the debt, right? So they don't even get the money but then they give you credit again?

I thought you said " Not being judgemental"

I am fairly certain for majority of those who had to file, it was an agonizing choice.

It's hardly as simple as *I'll get credit again*.

Re: Bankruptcy vs Missed Payments

Anonymous — Wed, 02 Jan 2019 19:45:33 GMT

@Remedios wrote:
@difringe wrote:
@kugel wrote:
Bk is not a good choice if u can find a way
I do I do believe that the whole system is crazy because the banks instead of to ruin your credit when you owe money with placing collections and judgments they should come up with a different solution and help you out to pay it and not stain your credit report
so they don’t get the customer to file bankruptcy and not get paid even a penny And whoever ends up loosing is the bank
This is the part that I'm struggling to understand. Under some bankruptcy chapters, you don't have to pay the debt, right? So they don't even get the money but then they give you credit again?
I thought you said " Not being judgemental"

I am fairly certain for majority of those who had to file, it was an agonizing choice.
It's hardly as simple as *I'll get credit again*.

You are right it is not an easy choice. For me I was young and bought a house during the time they were just handing money out to people. I will be the first to admit I was stupid to buy it when I did. However, it came to loosing my house or keeping it I choose the BK route to keep it. Need a roof over my families head. I learned from my mistake and have since corrected my bad ways.

Re: Bankruptcy vs Missed Payments

Remedios — Wed, 02 Jan 2019 19:49:47 GMT

@Anonymous wrote:
@Remedios wrote:
@difringe wrote:
@kugel wrote:
Bk is not a good choice if u can find a way
I do I do believe that the whole system is crazy because the banks instead of to ruin your credit when you owe money with placing collections and judgments they should come up with a different solution and help you out to pay it and not stain your credit report
so they don’t get the customer to file bankruptcy and not get paid even a penny And whoever ends up loosing is the bank
This is the part that I'm struggling to understand. Under some bankruptcy chapters, you don't have to pay the debt, right? So they don't even get the money but then they give you credit again?
I thought you said " Not being judgemental"

I am fairly certain for majority of those who had to file, it was an agonizing choice.
It's hardly as simple as *I'll get credit again*.

You are right it is not an easy choice. For me I was young and bought a house during the time they were just handing money out to people. I will be the first to admit I was stupid to buy it when I did. However, it came to loosing my house or keeping it I choose the BK route to keep it. Need a roof over my families head. I learned from my mistake and have since corrected my bad ways.

I'm glad things are looking up for you!

Also, you really do not owe anybody an explanation about such a tough choice.

Thank you for sharing your story.

Re: Bankruptcy vs Missed Payments

difringe — Wed, 02 Jan 2019 20:32:44 GMT

@Remedios wrote:
@difringe wrote:
@kugel wrote:
Bk is not a good choice if u can find a way
I do I do believe that the whole system is crazy because the banks instead of to ruin your credit when you owe money with placing collections and judgments they should come up with a different solution and help you out to pay it and not stain your credit report
so they don’t get the customer to file bankruptcy and not get paid even a penny And whoever ends up loosing is the bank
This is the part that I'm struggling to understand. Under some bankruptcy chapters, you don't have to pay the debt, right? So they don't even get the money but then they give you credit again?
I thought you said " Not being judgemental"

I am fairly certain for majority of those who had to file, it was an agonizing choice.
It's hardly as simple as *I'll get credit again*.

I'm literally just trying to understand the process, so I apologize if it comes across as being judgmental.

I don't know how else to reiterate I am not making any judgments on anyone's history, lord knows I don't know what anyone has gone through. I'm simply asking questions as someone who doesn't understand. Idk how that means I'm judging anyone.

Someone earlier stated they couldn't apply for the higher end cards again for 10 years after BK, that part I could understand.

I get that it's obviously a touchy subject, no one wants to do it, etc. etc., I'm simply seeking understanding. Obviously once you've done it you have to go through steps to rebuild your credit, etc., at no point am I saying 'gee bankruptcy seems like a breeze, why don't we all just declare bankruptcy!'

Edit: Also, didn't think I had to say this, but obviously I'm not asking why anyone declared BK (or judging why someone declared BK), or else the title would be 'Why Did You Declare Bankruptcy?'

Re: Bankruptcy vs Missed Payments

difringe — Wed, 02 Jan 2019 20:36:41 GMT

@Anonymous wrote:
@kugel wrote:
Bk is not a good choice if u can find a way
To pay the debts but if u can’t pay it and its a really high amount the debts than yes bk is the choice
the downside is it takes time to rebuild back credit unless u really know how to do it
I filed less than 3 years ago and I am now at 180k in available credit ,

I do I do believe that the whole system is crazy because the banks instead of to ruin your credit when you owe money with placing collections and judgments they should come up with a different solution and help you out to pay it and not stain your credit report
so they don’t get the customer to file bankruptcy and not get paid even a penny And whoever ends up loosing is the bank
You would think they would take something over nothing. Most of the time if you file for a BK they get nothing (Though with a Chapter 13 they usually get some of the money). If they work with you maybe they can get some now and the rest later but they end up just writing it off (I think they do that) so I guess it doesn't matter to them.

Maybe this is the piece I'm missing; since they just write it off, it isn't as big of a deal? I admit I'm still struggling with the logic, but big companies do all sorts of things that make little sense to me.

Re: Bankruptcy vs Missed Payments

Anonymous — Wed, 02 Jan 2019 20:39:08 GMT

@difringe wrote:
@Remedios wrote:
@difringe wrote:
@kugel wrote:
Bk is not a good choice if u can find a way
I do I do believe that the whole system is crazy because the banks instead of to ruin your credit when you owe money with placing collections and judgments they should come up with a different solution and help you out to pay it and not stain your credit report
so they don’t get the customer to file bankruptcy and not get paid even a penny And whoever ends up loosing is the bank
This is the part that I'm struggling to understand. Under some bankruptcy chapters, you don't have to pay the debt, right? So they don't even get the money but then they give you credit again?
I thought you said " Not being judgemental"

I am fairly certain for majority of those who had to file, it was an agonizing choice.
It's hardly as simple as *I'll get credit again*.

I'm literally just trying to understand the process, so I apologize if it comes across as being judgmental.

I don't know how else to reiterate I am not making any judgments on anyone's history, lord knows I don't know what anyone has gone through. I'm simply asking questions as someone who doesn't understand. Idk how that means I'm judging anyone.

Someone earlier stated they couldn't apply for the higher end cards again for 10 years after BK, that part I could understand.

I get that it's obviously a touchy subject, no one wants to do it, etc. etc., I'm simply seeking understanding. Obviously once you've done it you have to go through steps to rebuild your credit, etc., at no point am I saying 'gee bankruptcy seems like a breeze, why don't we all just declare bankruptcy!'

Edit: Also, didn't think I had to say this, but obviously I'm not asking why anyone declared BK (or judging why someone declared BK), or else the title would be 'Why Did You Declare Bankruptcy?'

I think the issue is a lot of people are ashamed (not saying everyone is) of having to go this route (I admit it was not fun and I felt bad doing it).

Chapter 7 = 10 years

Chapter 13 = 7 years (5 years of payment sometimes shorter and it drops off your report after 7 years)

Each one has their pros and cons. You have to figure out what is best for you. I believe some cards offer you a card mainly because they know you can't apply for a BK again that soon. Others do it because they are considered sub prime lenders and they are willing to take the chance on you. Other high end ones won't touch you until you have a clean record. Which is what I am waiting for.

Re: Bankruptcy vs Missed Payments

Anonymous — Wed, 02 Jan 2019 20:40:40 GMT

@difringe wrote:
@Anonymous wrote:
@kugel wrote:
Bk is not a good choice if u can find a way
To pay the debts but if u can’t pay it and its a really high amount the debts than yes bk is the choice
the downside is it takes time to rebuild back credit unless u really know how to do it
I filed less than 3 years ago and I am now at 180k in available credit ,

I do I do believe that the whole system is crazy because the banks instead of to ruin your credit when you owe money with placing collections and judgments they should come up with a different solution and help you out to pay it and not stain your credit report
so they don’t get the customer to file bankruptcy and not get paid even a penny And whoever ends up loosing is the bank
You would think they would take something over nothing. Most of the time if you file for a BK they get nothing (Though with a Chapter 13 they usually get some of the money). If they work with you maybe they can get some now and the rest later but they end up just writing it off (I think they do that) so I guess it doesn't matter to them.
Maybe this is the piece I'm missing; since they just write it off, it isn't as big of a deal? I admit I'm still struggling with the logic, but big companies do all sorts of things that make little sense to me.

Exactly they have so many laws that help them while the consumer struggles. One "nuclear" option consumers have is filing for a BK, this does an automatic stay and they are not allowed to contact you at that point. They can contest it but most won't.