Help me out with seeing the whole picture. SCARED

[MrJoe]

Hi,

Long story short: Very unfortunate last few years, have accumulated over 100k in personal debt. Got divorced, have really fell on hard times. I attempted to use a Debt relief service but could not keep up with the large monthly payment. Bankruptcy has always been that one think i said i would never do.

To get right to it- Chapter 7 seems to be my only option. I am 33 years old. i understand the consequences of filing and that my credit will be ruined for the next 7-10 years. What i am seeking now is advice from myself in 5 years. Will i say, 'Man, i should have done X', or 'If i had only known you could do Y". Since i obviously can't ask myself, what would be some advice someone has who has maybe been through it? Words of encouragement? Am i just absolutely screwed for the rest of my life? I am also dreading the embarrassment as i understand that people can find out about this through an online background check. Is there any way that i can protect that? I do believe it is private but i can understand some folks like employers having a right to know. I accept full responsibility for the debt i incurred, i am just very sad and broken down by this. Any help, advice, encouragement, or straight up shots of truth would be greatly welcomed and appreciated.

 

[quincy]

What is the name of your state, MrJoe?

A lot of people find that bankruptcy is the best option for them when debts are overwhelming. Filing for bankruptcy is nothing to be ashamed of so you should not be embarrassed if you decide to file.

You mention divorce. It is important to know that child support obligations are not dischargeable in a bankruptcy. I don't know if that applies to you or not.

We have a bankruptcy attorney who posts to this forum. You should look for a response from "despritfreya".

 

[MrJoe]

Thank you for the prompt reply, Quincy. It actually may help me sleep tonight . My state is Tennessee. I definitely understood about the child support, even if it was dischargeable, i would always find a way to support my daughter for sure. Thank you again.

 

[adjusterjack]

my credit will be ruined for the next 7-10 years.

You have 100,000 in debt that you can't pay. Your credit is already shot and will stay shot for a lot longer than 7-10 years because you may eventually get sued for all or part of that debt and judgments often linger for a lot longer than 10 years.

Am i just absolutely screwed for the rest of my life?

The rest of your life? No. People who file bankruptcy and get rid of crushing debt often find that they can rebuild their credit after a few years. Hopefully the experience teaches financial discipline.

I am also dreading the embarrassment as i understand that people can find out about this through an online background check. Is there any way that i can protect that? I do believe it is private

It's not private. Bankruptcy is public record. Do what's best for you and don't worry about what other's think.

I accept full responsibility for the debt i incurred, i am just very sad and broken down by this.

Don't be like my friend. He's been living under crushing debt for the past 20 years, including several judgments that keep getting renewed, plus federal income tax debts that get taken out of his wife's disability pension. Bill collectors call him all the time. In 2013 he paid a lawyer $1500 to get bankruptcy started. My friend is a procrastinator. There is always something that gets in the way of getting things ready for bankruptcy and, now, 6 years later, he isn't even close and is about two years behind in filing federal income taxes. They live hand to mouth and will probably die broke.

If you don't bite the bullet and file bankruptcy now, things will be worse in 5 to 10 years because, guess what, all that debt will DOUBLE during that period as interest accrues.

 

[quincy]

I appreciate the thanks, MrJoe.

Please check back later for a post by despritfreya.

 

[Taxing Matters]

Hi,

Long story short: Very unfortunate last few years, have accumulated over 100k in personal debt. Got divorced, have really fell on hard times. I attempted to use a Debt relief service but could not keep up with the large monthly payment. Bankruptcy has always been that one think i said i would never do.

To get right to it- Chapter 7 seems to be my only option. I am 33 years old. i understand the consequences of filing and that my credit will be ruined for the next 7-10 years.

No, your credit won't be ruined for 7-10 years. What will happen is that the bankruptcy is eligible to stay on your credit record for as long as 10 years. But your overall credit rating and what creditors deem important after the bankruptcy is done depends on a whole lot more than just that bankruptcy notation. Often bankruptcy ends up helping rather than hurting your credit because it starts you with a clean slate and frees up income that can be used to pay bills. If you manage your finances prudently post bankruptcy you'll start to see the better credit offers in two years, maybe less, after the bankruptcy is over. And the more distance you put between you and the bankruptcy the better things will get, so long as you don't fall again into credit trouble.

I am also dreading the embarrassment as i understand that people can find out about this through an online background check.

There was a time, a century ago, when bankruptcy was considered a deep moral failure by others and rebounding from it was not easy. In the years since that has changed significantly. Few people in your community will know you even filed bankruptcy unless you tell them because they aren't going to be going around checking the records of all their neighbors for that. Bankruptcy filings don't make the papers like they used to. And even when people do know not nearly as many today think it is that big a deal. So many people have gone through bankruptcy that it's just not as big a deal today. A lot of the time people are in bankruptcy through no fault of their own. For example, one of the biggest reasons individuals file bankruptcy is because of crushing medical bills. Well, you can't always anticipate and plan for a medical crisis that may leave you with huge bills despite having insurance.

If you can't pay the debts and the collection efforts of creditors are causing you problems and your credit is already trashed because of delinquent debts then filing bankruptcy can provide much needed relief. Don't refuse to go that route over fears of what others might think. Most will never know. And among those that do know, a lot probably won't think too much about it. In any event, in the end it's about helping you get the best financial outcome, and if bankruptcy will get you there then go ahead and do it and don't look back.

 

[adjusterjack]

Even Suze Orman supports bankruptcy.

 

[Shadowbunny]

The one piece of advice I can offer is this: Once you have that clean slate, take a ruthless look at what things you need to change. Like Taxing said, sometimes debt is unavoidable. But if there ARE changes you can make, resolve to do so as soon as you're able. Most of us have had bad financial habits at one point in our lives (hello, college credit card used to pay for happy hours!) - the smart ones learn from their mistakes.

 

[despritfreya]

@MrJoe

I cannot add much to the above well reasoned responses but I will say this:

Bankruptcy is a tool and you need to look at filing one as if it were a business decision. While tough to do, try to take the emotion out of it. No one will look out for your best interest except “you” therefore, if getting out from $100k of debt means filing bk, then so be it. As all posters have indicated there are drawbacks to filing but the overall benefit of filing far outweighs any detriment. You will reestablish credit. You will find and/or keep employment. You will be able to finance cars, homes etc. All of this just takes time and time tends to pass quickly.

Will the filing be “public”? Yes. But considering the hundreds of thousands of individuals who file bk (neighbor, friends, relatives included), no one is really going to care. In fact, you might find out that your next door neighbor filed when he and you show up at the 341 Meeting at the same time. Such happened to one of my clients.

I have been practicing in this field for 30 years. I cannot count the number of times clients have called and told me that the minute the case was filed it was like a weight being lifted off their shoulders and all of the stress was gone.

Only you can decide what is best, but getting out from under that debt sounds like a no-brainer.

And. . . With all due respect to AJ, Suze Orman is an idiot. She tells her “minions” that you cannot discharge student loans. Wonder what "law school" she went to. Ok - I'll get off my high horse.

Des.

 

[adjusterjack]

With all due respect to AJ, Suze Orman is an idiot.

I know.

I keep forgetting to put sarcasm alerts in posts like that.

 

[quincy]

@MrJoe

I cannot add much to the above well reasoned responses but I will say this:

Bankruptcy is a tool and you need to look at filing one as if it were a business decision. While tough to do, try to take the emotion out of it. No one will look out for your best interest except “you” therefore, if getting out from $100k of debt means filing bk, then so be it. As all posters have indicated there are drawbacks to filing but the overall benefit of filing far outweighs any detriment. You will reestablish credit. You will find and/or keep employment. You will be able to finance cars, homes etc. All of this just takes time and time tends to pass quickly.

Will the filing be “public”? Yes. But considering the hundreds of thousands of individuals who file bk (neighbor, friends, relatives included), no one is really going to care. In fact, you might find out that your next door neighbor filed when he and you show up at the 341 Meeting at the same time. Such happened to one of my clients.

I have been practicing in this field for 30 years. I cannot count the number of times clients have called and told me that the minute the case was filed it was like a weight being lifted off their shoulders and all of the stress was gone.

Only you can decide what is best, but getting out from under that debt sounds like a no-brainer.

And. . . With all due respect to AJ, Suze Orman is an idiot. She tells her “minions” that you cannot discharge student loans. Wonder what "law school" she went to. Ok - I'll get off my high horse.

Des.

Thank you, despritfreya.

 

[Pinkie39]

Well, consider that Donald Trump has had several bankruptcies and was still elected president of the United States. Seriously, it's nothing to be ashamed of.

 

[Taxing Matters]

And. . . With all due respect to AJ, Suze Orman is an idiot. She tells her “minions” that you cannot discharge student loans. Wonder what "law school" she went to. Ok - I'll get off my high horse.

Well, in fairness to her, she does get some things right. Unfortunately for those who follow her, the challenge is in knowing what it is that she got right....

 

[adjusterjack]

Well, consider that Donald Trump has had several bankruptcies and was still elected president of the United States. Seriously, it's nothing to be ashamed of.

More famous people who filed for bankruptcy:

Marvin Gaye
Kim Basinger
Meat Loaf
M C Hammer
Francis Ford Coppola (twice)
Curt Schilling
Mike Tyson
50 Cent
Nicholas Cage

MrJoe, you'll be in good company.

 

[Taxing Matters]

More famous people who filed for bankruptcy:

And Milton Hershey, before he hit upon making the chocolate that made him extremely wealthy. Willie Nelson, the famous country singer, filed bankruptcy as a result of a large tax debt. Larry King, too, filed bankruptcy before he took on that stint at CNN that really made him famous. We could list many more, too.

By the way, Donald Trump never filed personal bankruptcy. But four companies that he owned did.