Life After BK

[lisac77]

My husband and I will be filing Chap 7 in January or February. Our business has failed, and we don't have enough money to pay the loans next month (and both loan accounts are already in arrears), so we are literally staring BK in the face. My husband is really scared, and he thinks that BK will ruin our lives. This site has given me a lot of hope (and thank you all for that!), so I was wondering about some specifics that may ease DH's mind.

We will be bankrupt but we will still own our home. All of our home bills are current (mortgage, electricity, phone, etc.). We own our cars. I have some credit card debt that will be discharged along with the business debt, so we will quite literally be starting over fresh. I have a good job. DH will hopefully be able to find a good job, but in the meantime he can watch our 3-year-old while I am working, saving us child care costs.

DH is worried because we will have "bad credit" but from the way I look at it, we don't really NEED credit for much of anything. We have phones, a home, cars, insurance... everything we could possibly need that requires a credit check, we already have. We will have debit cards with credit card logos, so what do we really need credit for?

The only thing I am worried about is if something major breaks in the house, and for some reason we don't have the cash to cover it. However we do have equity in the house... I guess if worse came to worse we could try to do a home equity loan. That's the only thing I can think of that might be bad in this situation.

Am I totally wrong in thinking this way? I really want to put DH at ease. This business was his project and it's very hard for him to see it go. I just want to help him by explaining how things will be OK.

[Grace]

I don't know if you'd qualify for a home equity loan right after a bankruptcy discharge. Let DH know that you already have bad credit. If you continue to avoid paying debts, his credit will get worse. The only hope for improvement is to file.

There is a point after filing (hopefully others will chime in on the specifics), hubby can take on a second job to build back up the savings. You can do the same. Get this behind you, make some great financial choices, and move on.

[CATCHMEIFYOUCAN]

Once you get discharged you can start rebuilding yourselves again, you will be soooo relieved! I filed Ch7 in the early 90's. I was able to rebuild my credit get all kinds of jobs. Heck I had rebuilt my credit to the scores of over 700, and had gained about several $10,000 limit credit cards. Just be careful on your choices once you get a fresh start.
You don't want to wind back up where I am now - Ch7. I wasn't careful with my choices and actions.

Best Wishes, Catchmeifyoucan

[annikasaunt]

Life after BK can be so refreshing if you choose wisely. It was the best but hardest decision I have ever made. I SAVE money every paycheck and if something comes up I have it put aside to use. This Christmas was the first ever where I don't owe a cent after the holiday. Everything is paid for.
Your credit is already shot, you might as well clean the slate and start over. You build up again and keep it good, life will be better.

[lisac77]

The financial mistake we made is buying a business that didn't work out. If it weren't for the business debt, we would be fine, and if we hadn't done the business, we would probably be living debt-free .

Although the business loans are behind, they haven't been reported to the credit agencies yet. My credit score is still pretty good as of today (700) but obviously if DH continues to default on the business loans, which is inevitable, we will be in serious trouble with the secured business lenders.

The wise choice for us post-BK is not doing another business. If DH can find a decent job fairly quickly, we should be fine. He is just worried about having bad credit. This is a new thing for us . I am just trying to put his mind at ease a little bit.

I have no intention of running out and getting a home equity loan after we file BK, I'm just worried about the "what-ifs." What if our plumbing system blows up, what if our AC dies, etc.

[Brendon]

Lisac77-

I filed bk for the same reasons you and yours are now considering bk. My business was insolvent. I filed on 8/28, discharged on 11/28 and was approved for my first credit card today with a 9.9% interest rate (it does have a $69 annual fee, however). This is not the first cc offer I have recieved, I bet I have gotten 10 offers in the mail already. My debt in the bk was 90% plus business related. I have always had a good credit rating around 760. My current rating is 610 just one month out of bk.

I have never had problems with credit cards so I am not too concerned about going crazy with the credit.

I have a great paying job and I don't even think about the bk daily anymore...It is behind me and I am "forward looking" once again. I am already saving money every month and some day soon will be back to where i was before I started the business. Time to discharge seems like forever after you file, but it comes fast and life begins again.

I have been exactly where your husband is. I went to the banks and tried to work things out..no luck. They simply apologized and said they planned on foreclosing in 30 days....

Bankruptcy may not be for everybody, but it was my only way out. I am so thankful we live in a country where we have this option.