What Is Life like After Bankruptcy?

At the risk of sounding overly sensitive... I hope everyone who is posting responses is willing to walk a mile in this person's shoes before they speak too quickly. This mom has already gone through all the though processes & made what she feels is the best choice for herself & her child. I see that she had to alter her original post as a means for defending her choice - which defeats the spirit of being able to post here for assistance, right?

JMHO,

C. in Iowa

My dad is president of a bank and I have been through this myself with my divorce. My husband had no concept of money. I too am in the financial industry. Stays on your credit score for 7 years but just by paying your bills on time in about 3 years most banks will give you a home loan because they have a record of your good behavior. For me it will be 5 years in August and after about 3 years those credit card companies began sending me credit cards like crazy. I'm afraid I'm a cash only gal. There are some great financial books out by Dave Ramsey. I would suggest getting one. They will be the best credit counseling advice you can buy for about $20. He's got his own radio program as well as website. He's been through it twice so will give you all kinds of advice you never thought of.

The question is do you own a home? Avoid this at all costs unless you are about to lose your home. This will scar your credit report for 7 years and you will not be able to purchase a home if that is in your future wants.

Go to www.daveramsey.com and get some budget forms and there is much advise there. I would help you for free over the phone to create a budget to pay for the most important things first. It's tough, but would be totally worth it. You can reach me at ____@____.com - use 'from mamasource' as your subject.

I know that filing was probably not an easy decision ... it wasn't for me but it was relly my only choice after divorce.
My life got easier - no more phone calls, no more stressing about what bills to pay. It will be 5 years ago this year i think that it was discharged -- i have 2 credit cards now and i even bought a house 3 years ago. it wasn't easy and I had help (co-signer on the house) but it works.
Just do what you can to get back on track with paying bills and eventually get one credit card again (you'll probably have to pay an annual charge at first) but slowly build your credit back up.
Good luck

I agree with Nicole S. If it's not too late you should really look into trying to work it out another way. I currently work for a company that deals with this type of thing and I could do a Financial Needs Analysis for you that is very comprehensive confidential and even better it doesn't cost you a dime! It wouldn't hurt you to try it before you take that risky step of bankruptcy. Email me at ____@____.com if you would like more information!

I filed bankruptsy chapt.7 about 6 years ago. Hasn't really held me back at all. I know alot of apartments wouldn't rent to me til I had been 2 years or more into the bankrupsty and I still can't get credit cards. I can get those crappy ones with horrible interest that a complete rip off.

My fiance filed bankruptsy chapt.13 about 3 years ago and say the only problems he has had is re-establishing his credit and building it back up. He's gotten credit cards, and has had no problem renting a apartment.

My bestfriend filed bankruptsy chapt.7 about 4 years ago and has had problems getting credit cards but other than that nothing else she even got a carloan.

For me bankruptsy was a huge relief to clear up my stupid mistakes I made at 18-20 years old. I wound up $30grand in the hole before my 21st birthday. My bank accts were garnished and I was going to court left and right with judgements it was my only escape. I don't regret doing it. It didn't change my bank situation I can still get a savings checking acct. The one thing that my bad credit has effected is my car insurance rates they are higher but bankruptsy or not they would still be high.

My best friend did try credit counseling and debt consolidation and it got her nowhere and only made it worse before she actually filed bankruptsy.

As far as jobs my best friend works for a company that produces checks for customers/banks/buisnesses and I myself have worked at different places that did do a credit report and had no problem hiring me.

I'd just avoid it. I think it's like taking the easy way out. Can you get a second job? I'd consolidate the debt into one personal loan if you can. You may need a co-signor unless you have some asset to put on the line. I was in your position and the only thing that got me out is my Dad dieing and I got his pension. I was able to make my own payments so I wasn't sinking but I was getting there. I guess if you must, find someone who can give you advise for free. Since you work in the finance field you should know better and I do think you will be looked upon negatively should an employee review your credit history and see that you had to file a chapter 7 or 13. It's really better to avoid it.

My understanding is that Conusmer Credit Counselling is free, and that those you owe are anxious to work with them. (Is that not the case nationwide? Regardless, I bet if those you owe knew you were considering filing, they'd work with you.)

Please remember that filing bankruptcy affects more people than just you. I think sometimes we forget that there are real people who lose when we do not pay our debts. When we think of a company, corporation or hospital as having treated us unfairly, or just some big thing without a face run by weatlhy people, it's easier to file bankruptcy. But the truth of the matter is that by doing so, you have taken a good or service without paying for it and someone has to pay that price. Many people end up taking a hit for it, on several different levels.

And not just the one to whom is owed money-- society also ends up paying a price for that. This drives up expenses for everyone.

Please, please, please only do this as a last resort. It is really tough, yes. But please don't effectively "steal" from our children and community if there is another way.

There may not be another way. And if that is the case, please forgive my frankness. It is good that bankruptcy is available. I just hope it truly is a LAST resort. In our society of wealth, I'm afraid so many of us don't know how or are unwilling to live simply. So much debt could be avoided by committing to live within our means.

Hi there J.,

My husband and I filed for bankruptcy a couple of years ago. We had such horrible debt and were relying on a settlement from my car accident to dig us out. We only got a small amount back after paying the lawyers and what medical bills we were required to pay because of a "contract" we signed. Anyway, long story short, we also included our home in the bankruptcy, so we were left looking for another place to live. Fortunately, my mother had good enough credit to cosign for us to get the apartment that we live in now. So the biggest thing that will get hit is your credit rating. The best way to rebuild that is from the point your bankruptcy is finalized, make sure all of your bills are paid on time. I would recommend getting a credit card once you are able to, and only spend on the card what you can afford to pay back within that month. This will also help rebuild your credit. Our credit rating went up enough to where we were able to get a car loan 15mo after our bankruptcy was finalized. It was below 500, and at the time of the loan 642. So the end of the story is, filing is not the end of the world, just alters it some for a little while and things do and will get better as long as you are smart with your finances from that point on.

B.

You seem to be getting some good responses, take advantage of their offers. Then make your decision.

I'll keep you in my prayers.

I filed bankruptcy about 5 yrs. ago and I find that I cannot get credit at all. I did try once for a card from a store and they refused me. Since than I have been afraid to try. I wish I could hear from others on this subject also. I feel for you because I went thru the same thing with medical bills piling up and had no other way to turn. Good luck to you.

Bankruptcy will stay on your credit for 7 years. I filed bankruptcy at age 19. I can't even remember how much debt I had, but my ex left me with a car loan, credit card debts to pay (that HE used to buy his new g/f a ring with, no less) and a 3 mo old baby. To get myself to a place where I could support myself and my son, I had no choice.

I was still able to get loans before the seven years was up. The difference is that you pay a much higher intrest rate. Places will still give you loans and credit cards. After all, after you've filed bankruptcy, you can't file again for something like 11 years (or something like that) so places know they will get their money one way or another from you. Belive it or not, I was even able to get a loan for a house only 2 years after my bankruptcy.

Credit counseling, I've been told is just as bad on your credit as filing bankruptcy, but your debts aren't gone, you have to pay them off. So you get the bad credit without the "benefit" bankruptcy can provide. I'm not saying bankruptcy is a good thing, but sometimes depending on your situation it is the only way out.

If there is ANY other way you can get out of debt, please do it that way. Only use bankruptcy as a LAST resort. You don't want that on your credit unless you have absolutely no other way out.

Hi J.,
Depending on what type of Bankruptcy you are filing.. My husband and I filed both chapter 7 and chapter 13( not at the same time)... They are both recoverable... I perfer to file chapter 13 only because it is the shorter of the two.. chapter 7 takes anywhere to clear your credit between 7-10 yrs and chapter 13 only takes 3-5 years.. they are expensive but to me they are somewhat worth it.. Dont have to worry about creditors calling and bugging you night and day.. You will recover from it... good Luck....

P. B.

The effect the bankruptcy truly has on you depends on the overall circumstances and typoes of debt being listed on your bankruptcy. If the majority of the bills are medical then you may have few issues with this. My cousin had mostly medical bills when she filed and has always worked for financial institutions and she maintained that throughout and beyond the bankruptcy and was promoted and has now transferred to another company.
If you have credit cards and file bankruptcy and one has a low balance or secured debt, reaffirming that will allow you to work on rebuilding your credit right away by making payments to pay it off.
I personally had to file in 1994 and withint a year bought an inexpensive vehicle form a dealership paying half down and they assumed the remainder with me knowing they would get their money back out of it. Also once you file you cannot file again for Chapter 7 for atleast 7 years so they consider you less of a risk during those years especially if your job and pay change for the better and you do small things to rebuild your credit. In 1998 I was able to purchase a home cosigned by my new husband who probably had worse credit though no bankruptcy due to late payment at the time.
I also was able to buy a 2 year old car and finance 10k in 1997 less than 3 years after filing, because I had rebuilt my credit. The most important thing is being able to explain what circumstances that existed before filing and that now are different to ensure it does not happen again. It did take a while to get a credit card, but a bank account with a debit card may be fairly simple to get and can be used like a credit card, just your own money backing it.
If you have other options to bankruptcy, the court could deny your filing and make you try those first anyways. If your attorney helping you file feels you are fine, this may be your chance for a new start. I do not advocate bankruptcy as a blanket way out of financial issues, but sometimes there are no alternatives depending on circumstances.
Now 14 years after filing I have a credit rating over 700, have had a homw for 10 years, and purchased 2 cars with financing as well as a boat during that time.
Hope this helps. The main thing like I said is being able to justify to financial institutions or people you may need or want to borrow money form after the fact the changes in circumstances that will prevent it from happening again so that they give you a chance to rebuild your credit.
C. Louise H. - disabled mom and Part time
Latasia Jewelry Designer

There is good info concerning the new laws here:
http://www.iowa-bankruptcylaw.com/Iowa_bankruptcy_law.html
It's an easy read and I am not endorsing any attorney on the sight. Go educated with your eyes wide open!

I filed bankruptcy over four years ago. Prior to filing, I couldn't get any type of credit. My paycheck was being garnished. My credit score wasn't even on the chart, it was that bad. Dont be nervous about going to court; it only takes five minutes. About a year after it was all said and done, I got my first credit card. It had a HIGH interest rate and only a $250 limit. I used it for gas and paid it ON TIME, EVERY MONTH. Little by little, my credit score went up. Last year I was approved for an auto loan-through a bank, not one of those auto credit places. I now have a couple more credit cards, just for emergencies and the interest rates are good. The most important thing is to pay EVERYTHING ON TIME. It's not impossible to build your credit back up. Make sure you include ALL of your bills on your bankruptcy, you only want to file once! Good luck!

J.-
I know a lot of people have answered this question but the first thing you need to do is look at your state laws. I work for a finicial planner who is licensed in many states and his advice was to look at your laws. Some states have where you will be COMPLETELY blacked out from apartments, some jobs, and any assistance programs for 7-10 years. Other states do not have such stritch laws. So before you make that jump, look into it because down the line it might really hurt or help and the best you can do is educate yourself.