Keep in mind, student loans cannot be discharged in a bankruptcy. So if her only debt is the student loans, she should consider consolidating them to one loan.

A bankruptcy should always be a last resort. Having said that, if she is having health issues from the stress and collectors are hounding her, than the bky could bring relief from that.

Thanks Colo, I didn't know student loans couldn't be discharged under a bankruptcy. I agree, bankruptcy should always be the last resort and I also think in many cases it is a moral decision.

My sister who has tons of student debts is considering bankruptcy. Would that affect her credit standing? I was told bankruptcy gave you a fresh start. Is that true or would it hound you for the rest of your life?

Keep in mind, student loans cannot be discharged in a bankruptcy. So if her only debt is the student loans, she should consider consolidating them to one loan.

A bankruptcy should always be a last resort. Having said that, if she is having health issues from the stress and collectors are hounding her, than the bky could bring relief from that.

If you have calculated your debt and it will take you more than three years or longer to pay off or get yourself on reasonable financial footing you need to consider your next options. Bankruptcy is a legal right, and mostly if you think you qualify... you do. The people I see everyday really do seem to have a good sense about their own situation.
When you retain a lawyer you then create the legal protection of an automatic stay. This automatic stay prevents the bill collectors, garnishments, repossessions from continuing to call you. The lawyer then takes all those calls from your bill collectors.
If you found that you cannot pay your bills off in a three year time frame and still support your family or yourself, the next thing is to see a lawyer. Bankruptcy is a legal right not a moral question. The people that I see have found themselves in a financial dilemma not of their own choosing. They have suffered job loss, divorce and economic hardship.

My sister who has tons of student debts is considering bankruptcy. Would that affect her credit standing? I was told bankruptcy gave you a fresh start. Is that true or would it hound your the rest of your life?

As one who has gone down the road of Bankruptcy... it is with you for a long time. I took Ch7 BK 09/2001 (nine years ago) and I have been spotless since. Still have great difficulty in getting credit. Ch 13 is only suppose to remain at the CB's for seven years but Ch 7 remains for 10 years. It isn't all over when the BK falls off. Firms I have applied to went back many years in their own records and find they lost money and won't issue credit even when the BK does fall off of the CB's. Truth every one has some difference and your sister may have a slightly different experience due to the creditors involved, amounts of credit wiped out, and so on. It is safe to say, it will hound her in some form for many years. YES! Note, this doesn't mean she can't get credit it just may not be prime for many years. For me it has been very hard. Note, a BK can effect your abilities to get insurance, employment and even lease/rent properties so be aware. Credit issuers are so fickle it stinks!!!

My sister who has tons of student debts is considering bankruptcy. Would that affect her credit standing? I was told bankruptcy gave you a fresh start. Is that true or would it hound you for the rest of your life?

In reference to the types of Bankrutcy, one point I do want to stress is using a professional attorney with solid backround in it. There are way more items to it than most people would ever know or think about. You need to get it right from the beginning. There is no room for error.

In my area of the country (Midwest) a good attorney with expertise in the big "B" would normally cost you $500 to $1000 dollars and would represent you with the trustee and courts. Also, their professional liablity insurance goes on the line when they sign on as your representative. The filing of the big "B" under the current law is not for the faint of heart. This is one time I would NOT recommend doing it yourself. Errors could cause you problems with the trustee, creditors and don't forget the Internal Revenue Service along with your state and there taxes.

Under the new law it is way more complicated than it was in the old days. Yes, I have been through the big "B" and I was glad a professionally licensed attorney specializing in the big "B" handled it. When the trustee get's involved, your creditor(s) have every right to send their attorney(s) to represent them and it can get dragged out and down right nasty.

Most people are emotional at the big "B" and are NOT technically prepared to deal with the complications of the big "B". No don't do it alone!!! It may be your last dollar to engage the service of an attorney but the leagcy of the big "B" under Chapter 7 is ten years. I am in my eighth year out from the big "B" and I still have trouble getting credit. My record is spotless record over the eight years!!! Seek help!!!:white-flag:It gets even better, even when the big "B" falls off your credit report, many of the lenders' keep in house records beyond the ten years and will do an internal search. From the search they still may reject your application for credit "blacklist" if you will. Apparently it is legal as they do it.

I'm confused when I hear Chapter 11, Chapter 13, and Chapter 15 bankruptcies. What do they mean???Who files which type of bankruptcy?

]Chapter 7[/URL] or Chapter 11 Bankruptcy ? Believe it or not, you don't need an attorney to file for bankruptcy in the United States if you don't want to hire one.


Bankruptcy is a legal process that provides proper legal protection from creditors and can help you restructure your financial life when you're overwhelmed by debt. This can be especially beneficial if a significant portion of the debt load you're carrying is at a high interest rate.

There is no legal requirement to use an attorney to file for bankruptcy, although declaring bankruptcy is a serious step that can easily warrant professional assistance. If you would prefer to file for bankruptcy without a lawyer for personal or tactical reasons, this page will help you to get started. Read on to learn how to file for bankruptcy without a lawyer .

but on the FLIP side i would highly reccommend that you read read READ until your eyes fall out, then talk to your local/national CCC

also get free lawyer consultation


as faR AS.....whO files....WELP THAT ANOTHER THREAD I WILL BE HAPPY TO TYPE AS THISD WILL BE CONTINUED NOT ONLY WILL I PROVIDED whO files..BUT A STEP BY STEP OF how each OF THE BELOW BANKRUPTCY WORKS........to be continued..

says uzi polo Finance Globe Ph.D

Chapter 7-Liquidation Under the Bankruptcy Code The chapter of the Bankruptcy Code providing for "liquidation," ( i.e., the sale of a debtor's nonexempt property and the distribution of the proceeds to creditors.)

Chapter 9-Municipality Bankruptcy The chapter of the Bankruptcy Code providing for reorganization of municipalities (which includes cities and towns, as well as villages, counties, taxing districts, municipal utilities, and school districts).

Chapter 11- Reorganization Under the Bankruptcy Code
The chapter of the Bankruptcy Code providing (generally) for reorganization, usually involving a corporation or partnership. (A chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. People in business or individuals can also seek relief in chapter 11.)
Chapter 12- Family Farmer Bankruptcy or Family Fisherman Bankruptcy The chapter of the Bankruptcy Code providing for adjustment of debts of a "family farmer," or a "family fisherman" as those terms are defined in the Bankruptcy Code.

Chapter 13-Individual Debt Adjustment The chapter of the Bankruptcy Code providing for adjustment of debts of an individual with regular income. (Chapter 13 allows a debtor to keep property and pay debts over time, usually three to five years.)
Chapter 15-Ancillary and Other Cross-Border Cases Chapter 15 is a new chapter added to the Bankruptcy Code by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. It is the U.S. domestic adoption of the Model Law on Cross-Border Insolvency promulgated by the United Nations Commission on International Trade Law ("UNCITRAL") in 1997, and it replaces section 304 of the Bankruptcy Code. Because of the UNCITRAL source for chapter 15, the U.S. interpretation must be coordinated with the interpretation given by other countries that have adopted it as internal law to promote a uniform and coordinated legal regime for cross-border insolvency cases.
The purpose of Chapter 15, and the Model Law on which it is based, is to provide effective mechanisms for dealing with insolvency cases involving debtors, assets, claimants, and other parties of interest involving more than one country. This general purpose is realized through five objectives specified in the statute: (1) to promote cooperation between the United States courts and parties of interest and the courts and other competent authorities of foreign countries involved in cross-border insolvency cases; (2) to establish greater legal certainty for trade and investment; (3) to provide for the fair and efficient administration of cross-border insolvencies that protects the interests of all creditors and other interested entities, including the debtor; (4) to afford protection and maximization of the value of the debtor's assets; and (5) to facilitate the rescue of financially troubled businesses, thereby protecting investment and preserving employment. 11 U.S.C. § 1501.

Is there a Chapter 15 bankruptcy filing? I only know of Chapter 7, 11, and 13. :

* Chapter 7 -- can be filed by anybody. It's severe for unsecured creditors because get paid only after secured creditors and debtors are get their claims after exceptions by law, that is, if there's money left.

* Chapter 13 -- can be filed by wage earners and small businesses. This type of bankrupcy filing delays and reduces payments to creditors over a period of time.

* Chapter 11 -- similar to Chapter 11 (with more requiremnets) but filed by large companies. This is a better option if the company wants to reestablish its credit worthiness.

I'm confused when I hear Chapter 11, Chapter 13, and Chapter 15 bankruptcies. What do they mean???Who files which type of bankruptcy?

I really think that people who have to file because of medical costs should have the reporting time reduced to 5 years. Heatlh care is unGodly expensive.

The only problem with filing a bankruptcy these days is that I believe the banks are going to be less forgiving then they have been for the past 10 years-because of the economy. We've had other recessions in the past, but this one is really bad. And with those new UDAP laws that are coming 7/2010 the banks are going to really start being choosey.

Now, on the other hand, with personal bankruptcies at an all time high (nearly matching the rush before the laws changed 10/2005) I think banks might have to "give in" because so many people will have the bky on their records.

If one can they should file a ch 13 because some of the debt gets paid back (looks better to future creditors) and as I understand it, a ch 13 "only" reports for 7 years as opposed to 10 for a ch 7.

Great Point...

Rockin35!

Should they (Financial Institutions/Credit Bureau) not be mad ? Has society as a whole for the last 20 - 25 years lived beyond their means ? They (Financial Institutions/Credit Bureau) offered, we took without thinking about it and we (society) at the time could afford to pay back. Now the worst economic times since the Depression is here and everyone is pointing fingers !

Think of all the Recessions since the 30's and society survived because they learned their lesson and saved money. The 80's came about and society through savings to the wind.

All of you out there who were Teenagers in the 70's how many of your parents have gone back to work because of the current economic situation ? Your Grandparents drilled it into your parents what saving was all about

I will say this again, "What percentage of society is 2 paychecks away from real trouble ?"

Sorry Meya, Rockin, you opened up Pandora's box

In "Rockin's" perfect world, I would do away with the whole 10 years before a Bankrupcty comes off a credit file, I would limit it to 5 years.

That's what I am talking about!

Meya,

You made a valid point. I have come to terms with my current situation and have drafted a potential Plan B and Plan Z. AT&T are still processing layoffs and will be --through August 2009, of which my department is in jeopardy.

Yes I have always paid, but if I no longer have an income with the scarcity of jobs, Plan B is very unlikely, at which case I move to Plan Z (Bankruptcy). I would never do it to evade paying my creditors but for the sole purpose of utilizing a Legal Proceeding designed for circumstances similar to mine and only as a last resort.

I think in general, creditors, bureaus, financial institutions and all others should stop "frowning" so much upon Bankrupcty Filers and realize the limited amount of choices for a lot of people in this economy...... Just my take!!

In "Rockin's" perfect world, I would do away with the whole 10 years before a Bankrupcty comes off a credit file, I would limit it to 5 years.

Rockin35

Sometimes people's circumstances are different than yours.

That is why I mentioned this "If I so happen to loose a job, then bk it is, because who else is going to pay my bills."
I am pretty sure that everyone has a reason for filing bk, if they are just doing it for the heck of it, or to get over on creditors, then they have a serious problem.