Bankruptcy

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MCFLYFYTER's picture
MCFLYFYTER
Status: Member (Offline)
Joined: Jul 28 2008
Posts: 19
Bankruptcy

It seems everyone wants to know, pay off debt, or buy supplies and pm's.  Why have I not heard a word about bankruptcy?  I would file bankruptcy, and buy pm's.  In the near future you may not be able to do either.  Why not?

Lemonyellowschwin's picture
Lemonyellowschwin
Status: Platinum Member (Offline)
Joined: Apr 22 2008
Posts: 561
Re: Bankruptcy

Maybe because you need to be insolvent to file for bankruptcy?

keelba's picture
keelba
Status: Bronze Member (Offline)
Joined: Dec 17 2008
Posts: 55
Re: Bankruptcy
Lemonyellowschwin wrote:

Maybe because you need to be insolvent to file for bankruptcy?

 

That is correct. You cannot declare bankruptcy on a whim. It must go through a hearing before a judge and you must be granted bankruptcy. The laws keep changing making it harder and harder for anyone to qualify.

Secondly, you may be granted (in most cases) either a Chapter 7 or Chapter 13. If it's Chapter 7 that is good because you will be off the hook for all debts and it is unlawful for any creditor to attempt to collect. However, in most cases, you will be granted Chapter 13 which means that the judge will decide that you will pay back a portion of your debts, how much you will pay back and how big your payments will be. Bankruptcy is not a free ride. The best most can hope for is that it will force collectors to stop calling. It will still cost several thousand dollars in attorney's fees as well. The worst part is that even if the judge determines that you are not eligible for bankruptcy, you will still have the attorney's fees and your credit will be destroyed simply because you declared. It is not necessary to have a fully finalized bankruptcy to kill your credit, you only need to declare it.

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