I must say that I've witnessed some of my associates and 2 of my friends file Chapter 13 and one of my friends owed $27000K in credit cards and she put her Car Note under "Wage Earner" through the court system with a reduced payment. For her, it was the best choice she could have ever made given her circumstances. She filed in 2003 and rebuilding has been a good thing for her.

But it appears the laws are not really consumer friendly these days, everything is setup for the Big Banks to find ways to maneuver around the law, jack up our APRs, add Fees, get Bail Out Money, and so forth. Although I have seen my fair share of folks that have clearly abused the personal Bankruptcy Protection,....but so have Large Corporations.

The whole thing is a mess!!

Rockin35

I think that the bankrupsy laws were changed becaue it was to easy too file for many years. I think that it is a good thing that I am making a budget, looking for a second job, and started a savings account to avoid bankrupsy. In some cases, it is really unavoidable. If you had a savings account and such and went through a lot of medical stuff that you really can't pay back, then it may be your only option. Sometimes people's circumstances are different than yours.

Although people may abuse the Bankruptcy Laws, I do think that the change in the laws were a departure from the Law's purpose. I think that we can all agree that the law was meant for people who where on their last will and dime as a way to stop debt collection and put an end to phone calls, duns, etc and to protect assets vital to day to day life. I think it was completely and utterly unacceptable to pass a law written by MBNA, especially a Bankruptcy Law. That is a complete conflict of interest. MBNA and other major credit card companies should not be tampering with our already small set of consumer protection laws. ( http://www.consumeraffairs.com/news04/2005/bankruptcy_bill2.html )

I think that the bankrupsy laws were changed becaue it was to easy too file for many years. I think that it is a good thing that I am making a budget, looking for a second job, and started a savings account to avoid bankrupsy. In some cases, it is really unavoidable. If you had a savings account and such and went through a lot of medical stuff that you really can't pay back, then it may be your only option. Sometimes people's circumstances are different than yours.

Good point Meya, and I'm sure many couples will rethink your idea once this issue (the economy) becomes better. Again, very good point !

Yeah, you are one of the lucky ones. These banks are really tripping right about now. I just want to add this real quick, my grandma made a valid point when she told me not to let a man (including husbands and all) pay my bills, pay them by yourself. Her reasoning was because if they so happen to leave, you can afford to keep what you got. If a person has to file bk, it is not the end of the world, but rebuilding can take a longer time, and costly.

This is why I have to measure things before I purchase a house, it is difficult for one person to purchase a house and all other responsibilities especially when he/she has kids. If my husband decides to divorce me, I want to be able to keep everything that I currently possess. If I so happen to loose a job, then bk it is, because who else is going to pay my bills.

Claiming BK will be based on your way of life. If you are a two income family and you have been living off both incomes to meet expenses and one person gets laid off and can't find work who also exhausts all assets and unemployment you have no other choice. Been through it, and yes 10 years is a long time. I guess I was lucky because I started rebuilding in 1997 before the problems we face today became an issue.

I found it very valuable for those who are going to file bk to rethink what kdb030609 just mentioned above, when you file bk on a company that actually forgives, and that company merges with a bank that does not forgive, your chances of banks not forgiving has just doubled. That is pretty interesting, I never thought of that.

kdb, thanks for sharing your experience with us. It will definitely help our fellow members make better decisions in the future.

My opinion and I've heard this from other people and read in books. That Bankruptcy is not a path you want to go down. It takes ten years for it to clear your credit bureau's. The banks that you stiff may not forget after ten years. They have internal records to keep track of things. You may say well you'll stay away from them. One thing to think about is how many banks have combined in recent years not just 2008. Who will be the next to merge or be bought out. They will combine records also. I know some banks forgive after a while and let you back in others don't! A example of how long they remember I had a car loan in early 90's with NCNB which soon after became Nations Bank. For those of you not familliar with them they became what is now one of the largest Bank of America. I decided last summer to switch banks to B of A. After giving them a current address in AZ. I didn't receive debit card in time it said I would.So I went to local branch and found out they sent it to the address. The one I lived at while I had that car loan. Which was on the east coast in their home town. I hope this true story helps you to make the right decision for your future. There are alternatives to look at. Just remember you may be mad at your creditors now! But you don't want to take it out on yourself too By making your short and long term credit a long painful journey!

Well it also depends on the state that your cousin lives in (fee wise). When I did mines in NYC over 10 years ago I believe it was about $300.00 less than what you paid YoYo. Again I strongly believe and I could be wrong the state has a lot to do with it.

1; As a consumer(non-business), Chapter 11 isn't available to Him.
2; In a chapter 13 he doesn't have options on who or what to include in the Bankruptcy.
3;Chapter 13 is merely the court playing the role of Debt Consolidation Services. With two distinct differences...
a) After the preset term, usually 3yrs, you owe nothing.
b) It Stains your credit tremendously for 10 years.
4; In a Chapter 13, the court will determine a monthly payment based on total debt, expenses verses his Income.
5; The monthly payment is made to the court, which distributes it to the creditors. All creditors will be included. What ever items that are kept is up to the courts and possibly the creditor. Most times cars are allowed to be kept but this can also depend on the creditor
6; Date of discharge is based after the completion of the repayment term. This is very important as rebuilding/re-establishing his credit usually cannot begin until after the discharge date.


So if Bankruptcy is the only choice, which it should be the absolute last, then you should compare/consider chapter 7 to chapter 13.
However with any decision of this nature and seriousness, please, do consult an attorney, as many will give you up to 45 min free.

I agree, file the Chapter 7. I know the law has changed..i believe that there is some consuling involved or credit education. If your cousin is younger...thats a good thing then those dreadful 10 years will be over faster. Hopeful he/she looked at their debt and it substanial enough to file a BK. BK is the last resort and you see that you cannot get out of you financial problems. ( I mean well over $10,000 in debt.) I filed BK in 03 with all fees involved it was only $600..I know it's in the thousands now.

How much debt should someone be in before considering filing for bankruptcy? Also, is it better to go with Chapter 11 or Chapter 13 ? My cousin is seriously in need of help when it comes to his bills. He wants to keep his car which he is now 2 months past due on has other debts as well.

1; As a consumer(non-business), Chapter 11 isn't available to Him.
2; In a chapter 13 he doesn't have options on who or what to include in the Bankruptcy.
3;Chapter 13 is merely the court playing the role of Debt Consolidation Services. With two distinct differences...
a) After the preset term, usually 3yrs, you owe nothing.
b) It Stains your credit tremendously for 10 years.
4; In a Chapter 13, the court will determine a monthly payment based on total debt, expenses verses his Income.
5; The monthly payment is made to the court, which distributes it to the creditors. All creditors will be included. What ever items that are kept is up to the courts and possibly the creditor. Most times cars are allowed to be kept but this can also depend on the creditor
6; Date of discharge is based after the completion of the repayment term. This is very important as rebuilding/re-establishing his credit usually cannot begin until after the discharge date.


So if Bankruptcy is the only choice, which it should be the absolute last, then you should compare/consider chapter 7 to chapter 13.
However with any decision of this nature and seriousness, please, do consult an attorney, as many will give you up to 45 min free.

How much debt should someone be in before considering filing for bankruptcy? Also, is it better to go with Chapter 11 or Chapter 13 ? My cousin is seriously in need of help when it comes to his bills. He wants to keep his car which he is now 2 months past due on has other debts as well.

How old is your cousin? and what is his working situation? The reason why I am asking is because many things factor into a person falling behind. I filed bankruptcy too but it was over 10 years ago and I know how overwhelming and scarey it can be. Just give us some more information and hopefully we can lead your cousin in the right direction.

Oh Meya,..yes they do report to the cb's but report the card as a secured cc. Hmmm....

Aw man I was really hoping that they didn't

Hey hjm, i heard YoYo11 mention that bofa secured cards does not reprot to the 3 cb's, is that correct? I thought they did report, just does not report as secured. Correct me if I am wrong yoyo

Oh Meya,..yes they do report to the cb's but report the card as a secured cc. Hmmm....