Reply #16: Ok, bankruptcy... [View All]

[spuddonna]

DH and I filed personal and business bankruptcy 10 years ago. We just celebrated it coming off our credit history. Yeah, it takes that long to get it off... :eyes: You get my full sympathy! :pals:

Bankruptcy is not fun by any stretch of the imagination. But it won't permanently destroy your credit rating. Here's a few things I remember from our experience, but I'm not saying it's the only stuff to do. Every state has different laws, and different limits on what's protected.

Get a lawyer and file ASAP. It is possible to do this all on your own, but it sure helps to have someone on your side. A lawyer will be able to help you file the paperwork and guide you, especially if you are as nervous as we were in court. My poor hubby was literally in a state of shock, so our lawyer helped to prompt him along during the hearing.

You may find a young lawyer who is looking for court experience that is cheaper - I know a good friend of mine that helped his parents file did that, but it was via word of mouth. Yeah, I know a LOT of people that have filed! Two family members due to business problems, and two friends/friend's families due to health problems and medical bills.

You've probably heard about the law changes, so just do it asap. Plus, the sooner you file, the sooner any harassing phone calls from creditors will stop (if you are getting them). That was a huge relief for us. Also, as soon as you file you get to stop paying any of the bills that you've filed bankruptcy on, so the 'black hole' effect that drains the money away will stop, or at least slow down.

If you have real estate, definitely talk to a lawyer. We didn't own a home - we were renting, but the laws get complicated if you do own. But if you do rent, don't miss payments on your apartment/rental house. That can make it very difficult to rent other apartments/houses down the line. We never had any trouble renting even with the bankruptcy on our credit history because we always paid our rent on time. Very important! I'd like to scream it to all the young people on the board: Do not miss your apt rent payments! It will seriously screw you up!

Most states aren't going to try to take the clothes off your back - they give you an 'allowance' of things you can own. The goal of bankruptcy (at least it used to be) was to free you from insane loads of debt so you could get back to a reasonable financial situation where you can survive and pay your bills.

Also, the credit card companies/other loan companies don't want to walk away empty handed. You may be able to renegotiate loan rates, amounts, and 're-assume' the loans or cards, depending on what your situation is...

I think you'll feel better once you have talked to a lawyer. It gets that 'worst case scenario' figured out, and you can breathe a little bit better... Good luck, and if you need to vent or cry, you always have my shoulder! :)