Being an author I read lots of information that most people don't even think about in order to get valuable information for my readers. One of the most major topics of conversation these days is bankruptcy, that big ugly word that can help you or hurt you.
One of my family members filed for bankruptcy 8 years ago, and they are still paying the consequences. Not to say they didn't make the right decision, but it comes back to haunt you when you least expect it.
They were under the impression that when you filed for bankruptcy it cleared all your debts. How shocked they were when the attorney told them they had to pay nearly $650 a month for the next 5 years. Not only did they have to pay attorney fees but there were certain debts they had to pay whether they wanted to or not.
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In this case they really had no option but to file for bankruptcy. Doing so prevented them from losing their house and one vehicle to drive. Some of their creditors had to accept a lower pay off. Some were cleared completely.
It can help you if you are so deep in debt that you are drowning. Eventually you can build up your credit again, after your 7 years is up.
What has hurt the American public the most is credit cards. It is so easy to charge something without thinking. A few small charges add up to a whopping bill. If you pay any of your recurring bills with a credit card, it takes forever to pay it off.
There are different kinds of bankruptcies. Depending on whether you own a business or not, have disabilities, lose your job, are losing your house to foreclosure, and many other instances. Do your research before you go to an attorney's office so you won't be caught up into any games.
If you feel you need to file for bankruptcy due to many maxed out credit cards, there may be hope for you besides filing for bankruptcy. There are websites you need to check out regarding credit cards before you even think about anything else. You will find it extremely valuable.
How many credit cards does it take to get in bad financial shape? Just a few. But a lot of people have 10 to 15 cards. Some have more. Some people transfer balances from one card to another. But there is eventually a trap.
My family members have found that employers check your credit and find out if you have ever filed for bankruptcy. It's embarrassing and humiliating. Because the employers tend to ask personal questions that you may not be prepared to answer.
The question nearly every application has on it, whether you are applying for a job or a bank loan, is 'have you filed for bankruptcy in the last 3 years'. Some states may be different. If you lie they will find it on your credit report. Whether you tell the truth or not, your chances of getting a job or a loan are considerably lower.
Also, if you do not already have an established checking account, you'd better get one before you file for bankruptcy. My family members found out they couldn't change banks after filing because a bank won't accept you if their credit check shows bankruptcy.
Another thing I really don't understand is: After filing for bankruptcy, my family members received numerous credit card applications. I'm talking 1 to 5 every day. It amazing how a person's credit can be so much public knowledge. Most of these cards wanted them to secure the cards with a deposit. Some of them didn't care. I stressed to them not to take advantage of those cards or they would be in worse shape.
Now that it has been 8 years since filing for bankruptcy, they are having to renew their credit status. Fist they had to write to all of the credit bureaus to dispute any leftover bills still showing on their credit reports. It can take months to get these things taken care of.
Now they are trying to set up credit with someone local who reports to the credit bureaus to get some good credit established. They are not able to buy a new or used vehicle because they no longer have any credit.
I would say it will take at least 3 years to get enough good credit on their reports to be able to get another loan or reputable credit card.
So, think twice, decide if it's really worth it and do your homework before filing for any kind of bankruptcy. It may seem good at the time, but there are consequences to pay.
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