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Pro's and Con's

Discussion in 'The Lounge' started by NoSmog73, Nov 20, 2004.

  1. NoSmog73

    NoSmog73 1/2 ton status

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    Pro\'s and Con\'s

    I am looking to hear the pro's If any and the con's of trying to file bankrupty s/p..
    Anyone have real world exp in the workings or have done it that can offer any tips...
    I have about 12k in past stuff..(nothing to do with Credit cards of car loans , Just stuff like Medical bills and dumb stuff from when I was a kid..)
    And i want to wipe this stuff out and start saving to buy a house rather then take the next 2 years to pay this crap off and then start to save ...
    I have a car loan that I will be paid off first (2 months) and no Credit cards..
    I have heard of people that my parents know that have bought a house and new truck right after doing this and thought it wasnt do-able so soon...Am I not seeing the whole pic..
    Also does anyone know if stuff on your credit report gets wiped out after so long (like I want to say 7-10 years)
    Thanks for any thoughts or help.. /forums/images/graemlins/waytogo.gif
     
  2. js4x4

    js4x4 1/2 ton status

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    Re: Pro\'s and Con\'s

    Talk to an attorney for advise. Most offer a free consultation. I'd venture to say with only 12k of debt he'd suggest paying it off. It will be better for you in the long run.
     
  3. TrcksR4ME

    TrcksR4ME 1/2 ton status

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    Re: Pro\'s and Con\'s

    I thought the idea of Bankrupcy was that you are unable to pay your debts off and have no possibility of doing so. From your post you sound like you can pay on them, but don't want to and would rather spend the money on stuff you want to buy /forums/images/graemlins/dunno.gif Sounds like life though, not all debt is from careless credit card spending and the like, but its still debt you incured.

    Sorry, thats no help, just an observation.
     
  4. tRustyK5

    tRustyK5 Big meanie Staff Member Super Moderator GMOTM Winner Author

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    Re: Pro\'s and Con\'s

    Bankruptcy means you cannot pay what you owe. For example if your payments are $800 a month and after living costs you have less than $800 you'd be insolvent and could go bankrupt.

    Our laws probably vary a little, but here your credit is fubar for 7 years. That doesn't mean you can't get credit, but you sure won't get the lowest rates out there. Here, after 9 months you can begin to 'rebuild' your credit.

    We got into the soup shortly after 9/11. We were pretty vulnerable financially and were carrying ~$40,000 in unsecured debt. Mostly our own stupidity over the previous 10 years. When I lost my job after 9/11 the work I could find paid so much less we were going $250 a month further into debt each and every month.

    We contacted a bankruptcy trustee here and asked what we could do. We were still both working so they suggested we submit a proposal to our creditors for 20 cents on the dollar paid over 3 years. Our credit doesn't take as bad a hit, but it helped us into a sustainable position money wise.

    We have another 9 payments to go, and then we'll begin trying to rebuild our credit.

    If we had only owed $12K and had the means to repay it we would have done that. Chances are if you do have the means to pay you will not be allowed to declare bankruptcy.

    Rene
     
  5. fjleiter

    fjleiter 1/2 ton status

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    Re: Pro\'s and Con\'s

    2 ways to go, chapter 7 and chapter 13. Chapter 7 wipes out all your debts. Rules for Chapt. 7 are fairly strict though. If you have more than a few thousand in equity in your car, you'll lose it. If you have more than a $100 in disposable income a month you can't do it anyways (deduct your monthly expenses from your income, if you have more than $100 you won't be able to do chapter 7)
    Other route is chapter 13 which doesn't wipe out your debts, it just set's up a payment plan lasting from 3 to 5 years. A court appointed "trustee" will look over your expenses and income as well as assets, come up with an amount you will have to pay each month and they distribute this among your creditors. After a max of 5 years, all debts included are considered paid in full unless they were excluded from the bankruptcy payoffs (real estate etc...). Bankruptcys stay on your credit for 10 years, if you do Chapter 13, it could be up to 15 years from filing before it comes off. Chapter 7 it's on for 10. Chapter 7 you are usually able to get decent mortgage rates etc.. around 2 years after your bankruptcy. Chapter 13 you'll have to wait till your payment plan is over and then a few more years after that.

    By the sounds of it, if you can pay off your debts in 2 years. You do NOT want to declare bankruptcy.
     

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