what do you know about current bankruptcy laws?

[John@Outfront]

I have never have one, nor do i plan on it, but im curious when someone can file to wipe out debt?

and what can be discharged?, I know that you can only do it once every seven years

in days past it seems like someone could do it just "because",   is it different now?  could a person in good standing with a

good job just do one because they incurred a single large debt? like a judgement, etc

 

[Richard h]

Do not know current or new laws. A family member went this route years ago and it is not pretty. All assets of any valve are taken to satisfy debt towards judgement or creditors. That included house furnishings and appliances. When said and done she had close to nothing except some clothes and junk. Afterwards you're a great credit risk as you can't do it again for 7 years but will pay a premium for credit. Could not have pleased me more then to see what she went through. It was total retribution for her lifestyle.

 

[Dockmaster]

It also depends on what type of judgement it is. Some judgements are discharged in BK, some not. A few simple Google searches will give you relevant examples. 

 

[L.R.S.]

Had a friend go through this recently with a lot of medical bills and some credit card debt. He owned a house. Had to choose between Chapter 11 or Chapter 13. Chapter 11 eliminates all debt and you start fresh. He choose Chapter 13 which stops all interest, any debtor can file asking to be repaid. Fortunately most medical companies don't file, which was the majority of his debt. Once all debt was filed the court trustee calculated the monthly payment for 5 years (I think?). His payment was around $1600, much less than he was paying with interest for all his debt.

He paid on this for just over 3 years and got it down from $95k to $40k. He saved up enough money and made a lump sum payment and the bankruptcy was discharged. Good for him. 

Now he needs to rebuild his credit so he can refi his home and possibly buy a new car. But he has no credit. Bankruptcy was discharged, his mortgage was paid on time every month for 3 years, he has no credit cards or car payments. Regardless no one would give him credit.

He was actually told by a lender that he should have filed Chapter 11 and just wiped the slate clean. He felt he was doing the 'right thing' by repaying most of the debt with Chapter 13. Live and learn. 

 

[John@Outfront]

Had a friend go through this recently with a lot of medical bills and some credit card debt. He owned a house. Had to choose between Chapter 11 or Chapter 13. Chapter 11 eliminates all debt and you start fresh. He choose Chapter 13 which stops all interest, any debtor can file asking to be repaid. Fortunately most medical companies don't file, which was the majority of his debt. Once all debt was filed the court trustee calculated the monthly payment for 5 years (I think?). His payment was around $1600, much less than he was paying with interest for all his debt.

He paid on this for just over 3 years and got it down from $95k to $40k. He saved up enough money and made a lump sum payment and the bankruptcy was discharged. Good for him. 

Now he needs to rebuild his credit so he can refi his home and possibly buy a new car. But he has no credit. Bankruptcy was discharged, his mortgage was paid on time every month for 3 years, he has no credit cards or car payments. Regardless no one would give him credit.

He was actually told by a lender that he should have filed Chapter 11 and just wiped the slate clean. He felt he was doing the 'right thing' by repaying most of the debt with Chapter 13. Live and learn. 

sounds like he did do the right thing, if he would have filed the chapter 13 then he would have burned all the "other people" that gave him product and services.  there is a face to the other side  you probably meant to say he could have "live and burned the other guy"  instead of live and learn

 

[Fireballsocal]

Had a friend go through this recently with a lot of medical bills and some credit card debt. He owned a house. Had to choose between Chapter 11 or Chapter 13. Chapter 11 eliminates all debt and you start fresh. He choose Chapter 13 which stops all interest, any debtor can file asking to be repaid. Fortunately most medical companies don't file, which was the majority of his debt. Once all debt was filed the court trustee calculated the monthly payment for 5 years (I think?). His payment was around $1600, much less than he was paying with interest for all his debt.

He paid on this for just over 3 years and got it down from $95k to $40k. He saved up enough money and made a lump sum payment and the bankruptcy was discharged. Good for him. 

Now he needs to rebuild his credit so he can refi his home and possibly buy a new car. But he has no credit. Bankruptcy was discharged, his mortgage was paid on time every month for 3 years, he has no credit cards or car payments. Regardless no one would give him credit.

He was actually told by a lender that he should have filed Chapter 11 and just wiped the slate clean. He felt he was doing the 'right thing' by repaying most of the debt with Chapter 13. Live and learn. 

Sounds like he needs a secured credit card. He deposits $500 or however much with the bank and they give him a credit card with that much credit. It's a quick way to start rebuilding credit. 

 

[L.R.S.]

Sounds like he needs a secured credit card. He deposits $500 or however much with the bank and they give him a credit card with that much credit. It's a quick way to start rebuilding credit. 

He told me he was able to get a credit card with a $1500 max.  He used it for some small purchases for a few months and once it was reported on his credit he applied for a refi to take advantgage of the supe rlow interest rates last year.  His credit wasn't good enough to get the rates most places advertise but he did refi, lowered his monthly payment and got out of an adustable mortgage which had alreeady gone up once becuase FJB.

 

[NIKAL]

Don’t know much about this but a good friend of mine many years ago did a debit consolidation? At the time they did not own a home. Their debit was all about luxury items. Car’s & truck payments, Toyhauler payments, horse trailer, personal loans, several cc etc. Doing this did not get any of it forgiven, but I don’t think it hurt his credit either, or not a bad? Just put everything into one lower interest payment and forced them to sell what is not needed and cut up the credit cards. Again I’m not sure how it all works, but it worked for them.