At what point do you start considering bankruptcy?

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At what point do you start considering bankruptcy?

It seems everyone has their own personal thoughts/views on the topic of bankruptcy. Some seem to think it's downright awful, irresponsible, and think if someone has to file bankruptcy or ditches their bills they are dirtbags. Then you often read or hear about these millionaires and businesses who use it as a tool to dare I say "profit" from. I'm buried in credit card debt. I've yet to miss a payment but now that I have no income I'm starting to wonder if I'm being foolish spending the last of my cash savings to keep a credit account in good standing. When do you say enough is enough and start looking into bankruptcy?

I think this is probably something you'll want to talk to an adviser about. I say that because I assume everyone will have a different answer here. Maybe there's some kind of consolidation plan that can "save" you without getting that "b word" on your record for all those years that it legally has to remain there?

Personal thoughts... I think it could help someone who got buried under debts without "planning" it. I'm sure there are safeguards in place so that people can't "plan" to spend ten grand and then claim bankruptcy? (Are there? I really don't know, but there would almost have to be!)

Wish I'd have more advice, but the best thing I can think of is to ask a local adviser and don't believe things you read on the Internet. There's so much spin and twisting when it comes to issues like this that it's impossible to know who/which site to trust.

Two par answer here, if you don't mind.
1. Get a free, no-obligation consultation with a few debt negotiation ATTORNEYS.
Why? Well, if they're any good, they'll listen to your situation, look at your money and weigh in on your options.

2. I've been to this point in my life, and share my story so that you can learn from it. For one, there's nothing wrong with bankruptcy. It clears the playing field and makes room for you to recover, maybe reel a bit from the consequences and live your financial life differently going forward.

For me, I had a bad real estate deal, and contacted debt negotiation/bankruptcy attorneys while waiting to find out how much my bank would take on a short sale. Fortunately they accepted the money that the buyer gave them and waived the deficiency.

Had they not waived the deficiency, I would have relied upon the attorney to negotiate down the debt. He would have charged a few hundred dollars an hour, but could not guarantee results because the banks had become pickier, but generally you pay a fraction this way than you would if you were to just go all out bankrupt.

The next step would be to consider bankruptcy after negotiating with the creditors.
After you talk to the attorney, then you know more about your options. For instance, the creditors may ignore the actual debtor in favor of speaking with your lawyer. That's one time to hire him or her.

If not, apply whatever the lawyer tells you (which might be "tell the creditor you have no money, show bank statements, and then make payment agreements."

Other than that, yes the rich and famous have the luxury of resources to go through bankruptcy that the rest of us do not enjoy. You know you can keep your house after bankruptcy? Yeah, so, they get more multi-million-dollar contracts meanwhile you're stuck trying to pay $60,000 off at 13% interest with a retail $13,000 a year job. See the difference? So, you going through bankruptcy would mean that you have to have CASH to pay for EVERYTHING (phone, rent, car, gas, insurance, etc.) Not to mention, when you miss payments, your utilities and insurance check your credit and decide you are risky, so they too jack up your rates.

One way to mitigate that is to stick with the same phone company you've had forever, or the same power company. Do any shopping around for better rates now, before your credit goes into the toilet.

Good luck and hope you win the lottery, love.


wow great post jayne. I have heard stories of people maxing out their cards by taking cash advances and then claiming bankruptcy and also of someone going thru bankruptcy and being able to keep their house,cars, motorcycles, boat, ridiculous.

I really don't know how to answer you as I have never had this problem. I have never even considered bankruptcy. I personally would refuse to declare myself bankrupt until everything forces me to look that way. If you are having a hard time keeping up with money, feel free to shoot me an e-mail at [email protected] if you want any ideas for earning money online. I sure hope that things can work out for you, WebGrind.

I have been in touch with a bankruptcy trustee. I have one credit card that is maxed out but even on my tight income I was making payments and would have continued to do so. Then I received a letter from a collection agency about a debt from 10 years ago. I had no idea I still owed on this credit card because I never received any bills, letters for non payment or anything until the collection agency contacted me. When I received this, I panicked. They had been charging me interest for the past ten years and the bill was now over 7000. dollars. With that amount and my other credit card I knew I would never be able to pay them off. That is when I decided I would check into bankruptcy. Trust me, I am not looking for the easy way out. I just know I will never be able to keep up with the payments and keep a roof over my head.

So for me I don't see another option. Each situation is different and I don't think there is a set rule as too when you choose to declare bankruptcy. I am aware that some people see it as a cop out but we all have to survive the best way possible.

As said by most everyone, I think this has to be a personal decision. One question you need to ask yourself is, am I going to live the same kind of credit-controlled life again after I file for bankruptcy , or am I going to live simply, and not go back into debt.
If you do not plan on having more credit cards, then it really won't matter a lot if your score is down for a while, and you can't get credit. I think they do this to stop the people like you talked about , that max out the card, and take all the cash they can get , and then file bankruptcy. If their credit stayed the same, they would all just go out and get new cards and play the whole game over.
If you no longer have an income, you are probably not going to qualify for more credit anyway.
Personally, I think that to file, get rid of the debt load, and then learn to live with out credit, is the way to go. A simple life doesn't have all the little extra goodies, but neither does it have all the headaches.

Bankrupt is a word that I hope to never be in front of and I hate that anyone here is considering it. First, you need to know that there are two types. One type that creates a payment plant for you and another type that wipes your debt clean at the expense of your FICO score for about 8 - 10 years.

You should research what debt you have and if it actually applies to current Bankrupt conditions so that it actually gets wiped out by the bankruptcy. The worse thing would be to declare that you're bankrupt and then it doesn't change your condition.

Just remember, there are a lot of ways to boost your income and all it takes is time. Remember that even if its only 10 bucks, each little dollar is a world of meaning on your path to being debt free.

Thanks for the responses guys. I'd rather not file bankruptcy but it's something to think about I guess. I'm currently exploring ways to make more money and pay the debt down.

I think you should explore every possible option that you can to pay your debt down. Exhaust every last option! I think a person should only declare bankruptcy when every other tactic fails.

This is not to be smart, but I would think way before you put yourself in financial straits which would bankrupt you. Think responsively before hand. Save yourself the grief.

Wow. This is a great post. Thank you for sharing such an informative post!

At what point do you start considering bankruptcy? | ConsumerFu


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