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What are the pro's and con's of filing for bankruptcy?

What excactly happens? Is there a limit as to how much debt I can have? whether theres a minimum or maximum? Does it cost anything?

I owe about $30 grand in credit card debt, I've been trying for so long to pay it off, and it's just not working, The only income is mine, and I only make about $600/month (and thats being verry generous, most months its only about 500). Then there's rent, bills, groceries etc. All I ever pay is the minumum amount, or a few dollars extra depending if I have it or not. I just don't ever see it going away, and I thought if I filed for bankruptcy, at least I wouldn't have to worry about my credit card debt, and I can actually be stress free for once. I honestly never intended on it being this much, and now its to a point where I'm so stuck. Im 27, My daughter and I live with my parents (i still pay rent tho) and with all my debt, I never see myself moving out. Would they even let me? How long of a process is it? My credit card company informed me the other day that they are going to take me to a collections agency. So if you have any info, that would be great.

 
Anonymous

Asked by Anonymous at 4:04 PM on Nov. 28, 2010 in Money & Work

This question is closed.
Answers (11)
  • I just filed and it was the best choice my husband and I have ever made!. We had to file a chapter 7 which clears all debt, it file for this chapter you must pass the means test. If you pass that test you can file for a 7 but if you don't then you can only file for a chapter 13 which lowers the debt and you will still have to pay it back but not as much. As for surrendering stuff that depends, we kept everything and we were going to keep our car and then it broke down so we just gave it back to the bank...

    After you file a whole lot of things open up too you. MY husabnd and I could not get loans or credit cards or even a desent car that could fit our family in it. After we filed everything opened up to us and we were approved for a car loan with 8% interest pretty low after BK, also an emergency CC that will help build our credit so we can get a house .... I hope you make the right choice in what you decided to do..
    Anonymous

    Answer by Anonymous at 4:23 PM on Nov. 28, 2010

  • See if you can speak with a bankruptcy attorney in your area (most offer free consultations). With your income and debt, it sounds like you are a good candidate for bankruptcy, but the laws vary from state to state. There are a lot of downsides to bankruptcy; your credit will be trashed for at least 7 years, you may owe taxes on the amount that is forgiven, and future credit you receive is going to be at a much higher interest rate. Things like getting electric turned on (when you move out) may require a co-signer. That being said, the positive is that you will have some what of a fresh start. Talk to an attorney sweetie.
    Scuba

    Answer by Scuba at 4:09 PM on Nov. 28, 2010

  • It costs 2,000 at least to file. Talk to a lawyer and they can give you more info. I am filing soon as my job is suing me for something they shouldn't be and if I can't get out of it through the courts then I am going to have to file for bankruptcy.
    ashisamom

    Answer by ashisamom at 4:10 PM on Nov. 28, 2010

  • I don't have tons of info, but some. My husband and I had to consider it this year but so far we are hanging on. We are trying not to file because it affects your credit rating for 7 years, I believe. Plus the court then supervises your income and expenses. We went to a bankruptcy attorney for a complimentary consultaion and he answered a lot of questions through emails too. It would have cost us $2000.00 to file. I do not know if that varies according to how complicated a case it is. We also had a business at the time. Call some bankruptcy attorneys and ask about a consultation. You can also Google your state's name and the words "bar association". At the bar association website you can search for info about pro bono (free) legal services. GL!!
    elizabr

    Answer by elizabr at 4:14 PM on Nov. 28, 2010

  • I'm in Texas and it cost us $700 up front to file Chpt 13. The good thing is that creditors stop calling you, you get a payment plan, you go through financial budgeting classes. One bad thing is that in Texas, our house couldn't be wrapped up into the one payment. We have a bankruptcy payment and our regular house payment. We didn't know that until we'd decided to do it. For Chpt 7, I'm not sure how it works, but that's where you surrender all your things.
    Mrs.B3

    Answer by Mrs.B3 at 4:16 PM on Nov. 28, 2010

  • I know it stays on your credit report for 7 years and you can't file again for bankruptcy within those 7 years. But that lil tid bit might vary from state to state.
    sweetpea1217

    Answer by sweetpea1217 at 4:17 PM on Nov. 28, 2010

  • As for mimium and maxium it depends on how much debt you have. I think the starting is at 30,000
    Cost of bankruptcy is 945-5000 depending on the attorney you go too. Just call and get pricing, it usually is a 299.99 filing fee seperate from the attorney fee.
    I filed in may this year and it was discharged from the courts september 1 this year.
    Anonymous

    Answer by Anonymous at 4:26 PM on Nov. 28, 2010

  • After we filed everything opened up to us and we were approved for a car loan with 8% interest pretty low after BK,

    That is insanely high but I guess for someone with sh&t credit not too bad. So have you changed how you spend money? Do you save and put away for a rainy day and avoid the poor spending habits that lead you to bankruptcy to begin with? Just curious everyone I know who has filed bankruptcy has been in the same boat and when they were able filed bankruptcy again. I have no doubt all will be in trouble again soon they have all taken out car loans, bought homes again and have credit cards. Didn't learn anything other than they can legally steal from companies.
    Anonymous

    Answer by Anonymous at 5:03 PM on Nov. 28, 2010

  • From what you say, you have never missed a payment, so aside from being in debt your credit is probably pretty decent. If you file for bankruptcy, it will stay on your credit report for 10 years making it impossible to get a loan of any kind, a mortgage and in some cases, a new job.
    HotMama330

    Answer by HotMama330 at 11:32 AM on Nov. 29, 2010

  • Hotmama330 it doesn't affect your credit much I jsut went through it . it opens up for you...

    Anon 5:03pm I have learned my lesson and I thank goodness for the op to do bankruptcy. My husband and I have created and spoke with a financial planner and have set up a schudule for our bills. We are able to pay for everything and still have extra to put aside for a rainy day :)

    As for the interest in an auto loan at 8% that is pretty low concidering we filed bankruptcy. Most people who come out of bankruptcy tend to rush into stuff and not do research and get stuck with interest rate in the teens. So it is fairly good also the lowest rate in our area is 3.99% on a loan with great credit. after a year of good payments we will be able to refinance and lower the rate which is another good thing.
    I honestly think the people who rush into BK and don't think or research or want an easy exit and fall into the same habits will ...
    Anonymous

    Answer by Anonymous at 7:16 PM on Nov. 30, 2010

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