@DeeBee78 wrote:
I'm in the same boat as you - seeing people with worse credit than me getting better deals... I won't pretend I'm not jealous when I see people in these forums that have had financial meltdowns, but somehow qualify for decent financial products. I personally think bankruptcies should disqualify you from any type of credit for a set period of time, but half these forums would be empty if that happened.
Maybe this should be in a different thread but I did want to add something to your point. Please keep in mind is that when people file BK7 or BK13; there is no gray area. A Trustee and the Court goes through EVERY SINGLE asset you own. Then they determine if you qualify for BK. Once the BK gets discharged, the fico scores jump significantly. The law is complicated as it should be; but the law is there to protect people who need it.
Compare that to a "dead-beat" who is careless with their credit. They live beyond their means, dont care about paying their bills etc. They do not have to answer to a Trustee or Judge. They just have to accept the consequences of a lower score. Now this is an exagerated over-simplification but you get the point.
Many people who file BK, especially BK7 have a significant event in their lives that cause them to file BK7. I once read that of all the BK7's, a signficant majority have a severe medical issue beyond their control. My situation was 3-fold. I lost my job in the 2008 downturn. It was the first time in over 20 years where I did not have a job and I could not find one either. No one was hiring and I have an MBA. I had to cut lawns and live off my retirement. The financial strain caused my divorce because we were always fighting about money. The divorce cause me to have medical issues from the added stress.
@I had NEVER missed a single payment in 25 years. When I started to have problmes, the banks were patient to an extent. I owed about $80K in cc debt, much of this was low interest to pay my children's tuition. There was a few nice vacations in there as well but not many. Chase, BOA and CU shut my card off and asked me to pay $20 month and they will not take me to court. This was great. Discover was a pain in the @Anonymous. They would not work with me and took me to court. All my assets were frozen and I could not even pull out any money to eat. You talk about embarrassing when I had to call my Mother if I could eat with her because all my accounts are frozen. I called my EX first, but she was not happy with me at that point in time.
I had no plans on filing BK7. I would still be paying my CCs had Discover not been a pain. So my Atty recommended me to file BK7. Within 24 hours, my accounts were unfrozen, the phone calls stopped and the sun started to shine. It was the darkest day of my life and the best day of my life all within a 2 hour window.
So from a lender's point of view; which one is a better risk? A person with an uncontrolled medical issue/loss of job/divorce or a dead beat that could have controlled their situation better?
Banks know that once a BK is discharged that person cannot file BK again for many years (10 years for a BK7). Whereas a "dead-beat" with the same lowered score could file BK7 tomorrow. So it is much lower risk to loan to a person "fresh" out of BK7 because they have no debts anymore. They can pay their bills etc. Whereas than a "dead-beat" is much higher risk.
FICO 08 JUL23: TU 850; EQ 846; EX 843. Clean since BK7 D/C 6/2011.
