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Bankruptcy vs Missed Payments

difringe
Regular Contributor

Bankruptcy vs Missed Payments

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?

Scores as of 1/27/2021


Planning to garden until April 2020 (started Jul 25 2019)


Message 1 of 16
15 REPLIES 15
Anonymous
Not applicable

Re: Bankruptcy vs Missed Payments

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.

Message 2 of 16
difringe
Regular Contributor

Re: Bankruptcy vs Missed Payments

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?

Scores as of 1/27/2021


Planning to garden until April 2020 (started Jul 25 2019)


Message 3 of 16
Pikaboo-icu
Valued Contributor

Re: Bankruptcy vs Missed Payments


@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. 

 

  


Message 4 of 16
FireMedic1
Super Contributor

Re: Bankruptcy vs Missed Payments

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.

 

Message 5 of 16
difringe
Regular Contributor

Re: Bankruptcy vs Missed Payments


@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?

Scores as of 1/27/2021


Planning to garden until April 2020 (started Jul 25 2019)


Message 6 of 16
kugel
Valued Contributor

Re: Bankruptcy vs Missed Payments

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
Message 7 of 16
difringe
Regular Contributor

Re: Bankruptcy vs Missed Payments


@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?

Scores as of 1/27/2021


Planning to garden until April 2020 (started Jul 25 2019)


Message 8 of 16
VoltaicShock
Established Contributor

Re: Bankruptcy vs Missed Payments


@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.



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Message 9 of 16
Remedios
Moderator

Re: Bankruptcy vs Missed Payments


@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*. 

 

 

 

 

 

Undead Danny Trejo looks strangely like dead Danny Trejo, who looks exactly like alive Danny Trejo. Thanks, Netflix!
Message 10 of 16
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