Question Reasons to simply not file BK?

[DaisyMae]

It costs 1-2 grand. I am judgment proof, living a cash life from this point forward. Currently unemployed, by choice, but when I go back to a job I will limit my income to the exemption from wage garnishment. Also, once you file you have the 8 year restriction- the day after you file you could incur a huge medical bill, etc. that will not be able to discharged. Also- bad debts delete after 7 years from a credit report, whereas a BK stays put for ten years. Anyone have other reasons to simply not file?

[frogger]

It costs 1-2 grand. I am judgment proof, living a cash life from this point forward. Currently unemployed, by choice, but when I go back to a job I will limit my income to the exemption from wage garnishment. Also, once you file you have the 8 year restriction- the day after you file you could incur a huge medical bill, etc. that will not be able to discharged. Also- bad debts delete after 7 years from a credit report, whereas a BK stays put for ten years. Anyone have other reasons to simply not file?

You're not judgement proof. You may at this time be collection proof however. I understand your reasoning, but bad debts can stay around longer than a bk.

When you have judgements against you, they will normally hold good for around 7 years, and then can be renewed for another 7. You also may have agreements that you signed under limited seal (l.s.) which can have a 20 year statute of limitations.

If you're comfortable staying under the radar, hiding from creditors, and playing the game for years to come, then you're right. Why file?

For me, that was not my decision.

[StartingOver08]

As Frogger points out, not filing can last much longer (many years) than actually filing and putting the bad debt/collections/calls and stress behind you.

However, if you are talking about a relatively small amount of debt then not filing is a viable option. Of course "small" and "large" are subjective. IF you feel that you can pay off the debt or otherwise get rid of it thru settlements or disputes over a reasonable amount of time, then maybe not filing is the answer. Or working two jobs or getting down to business and selling everything you have to get rid of it.

For me, just drawing that line in the sand where there is no more debt at all was extremely important. It helped to clear my mind to be able to look forward without distraction. Now I plan my future instead of letting the creditors call and dictate to me. Its nice to wake up every day and not have to worry about money because I don't buy it unless I have the cash to do so!

[Flamingo]

As frogger states, it's mostly a personal choice. Only you would know if you could live the next decade or more looking over your shoulder and living your life hiding, maybe lying and watching. You may come to the point where you just can't anymore or you may be fine.

[HHM]

Ok, but the sad truth is, the OP's posts reflect a total lack of aspiration. Is that really how you want to live just so you don't have to file BK. BK is not failure, what you describe is total failure...the giving up of hope and aspiration. The people who file BK set themselves up for success.

Also, let's clear up the MYTH about how BK affects your credit.
1. Yes, BK is on your report for 10 years...
2. It DOES NOT affect your credit for 10 years, as it effects your credit score, A BK's negative impact lasts about 2 years.
3. Another problem, you are "assuming" the bad accounts will drop off your report, and are forgetting about the re-aging tactic. Also, guess what, Judgments NEVER come off your credit report until paid.

[Flamingo]

2. It DOES NOT affect your credit for 10 years, as it effects your credit score, A BK's negative impact lasts about 2 years.

While that may be true for some filers, for us we had issues with a Chapter 13 on our reports up until the time it was removed after 7 years. One was the cancellation of a credit card (that survived filing with a zero balance) 6 years after filing (being used throughout our Plan years with even a credit line increase) due to "Chapter 13 on our credit reports" according to their customer service. We were also denied credit after discharge due to the BK but were also approved. Other issues were employment related for my husband with affecting his ability to get one job and the nonrenewal of his government security access upon expiration and reapplication due to the BK. I would say a BK's general nonscore impact on one's credit and personal life lasts the entire time it is on your credit report depending upon individual circumstances.

[frogger]

Ok, but the sad truth is, the OP's posts reflect a total lack of aspiration.

And a lack of inspiration too.

As StartingOver pointed out, it's like drawing a line in the sand. The old life vs. the new life.

I made the decision to draw that line and start fresh. So what if a bk is on my credit report? My credit has been screwed for years because I had such a high debt level.

Now, I can start over and look forward. Not over my shoulder. I'm inspired, I'm motivated, and I'm looking for a better life ahead.

Not a life where I sit on the couch and eat Cheetos......

[StartingOver08]

) I would say a BK's general nonscore impact on one's credit and personal life lasts the entire time it is on your credit report depending upon individual circumstances.

IMHO this statement is what most people are afraid of when they consider BK. For the most part, IF you believe that the BK effect will last the 7 or 10 yrs that it is reported on your CR, then it will effect your behavior. Most of us recover very, very quickly out of BK.

There are some jobs that are affected and you need to know that going into your BK, but they are a small proportion of the total job market. If you lost a cc that you had for years, so what? Not every event is a causal event. Even if the creditor had a new rule that stated, 'no customers allowed with prior BK's', it is not a reflection of you personally. Just pay cash or don't patronize that particular store.

You are the consumer. You have the power of choice. Especially now that you have filed and have cash to make your purchases/choices. Don't look at filing BK as a limiting event - look at it as a liberating event.

[Flamingo]

IMHO this statement is what most people are afraid of when they consider BK. For the most part, IF you believe that the BK effect will last the 7 or 10 yrs that it is reported on your CR, then it will effect your behavior. Most of us recover very, very quickly out of BK.

There are some jobs that are affected and you need to know that going into your BK, but they are a small proportion of the total job market. If you lost a cc that you had for years, so what? Not every event is a causal event. Even if the creditor had a new rule that stated, 'no customers allowed with prior BK's', it is not a reflection of you personally. Just pay cash or don't patronize that particular store.

You are the consumer. You have the power of choice. Especially now that you have filed and have cash to make your purchases/choices. Don't look at filing BK as a limiting event - look at it as a liberating event.

StartingOver - you are correct but everyone needs to realize that it's just not all about "credit score" which will improve, it's the impact the words "BK" can and will have while on your credit reports. It's just a fact but yes everyone needs to know that it's best to try to continue to go on as normal as possible and apply for that job and work at keeping good credit during those years beyond discharge so that in time it is all just a thing of the past. Filing BK is a life event - you learn from it, dust off and go on...

[HHM]

Flamingo, I do have to take issue with you generalizing your "individual experience". It is NOT the rule that a BK hurts certain employment or security factors. I have actually discussed this with the "decision makers" on these issues.

Security Clearance: BK is a "factor" but NO ONE is denied a security clearance simply because of a BK.

Financial Jobs: In this situation, it has more to do with the decision makers personal prejudice than any formal policy. Is there a risk, yes. Is it a high risk, NO. I have seen financial planners, stock brokers, etc, who must declare a BK on their U-4, have NO PROBLEM getting or keeping employment, getting underwritten by broker/dealers etc.

My problem is that you present this as a reason not to file BK, you just can't look at it that way, because in the big picture, if someone needs to file a BK, they really have no other alternative. As starting over points it, it is a very small percentage of the job market where BK is even a "factor".

[Dst1]

I want to defend the OP. I'm actually a little shocked at the judgmental attitude displayed in this thread. There any many people in this world who consider BK a fate worse than death and are extremely critical of the character of people who file BK. So it's highly ironic that people come to this thread and make remarks about a lack of "inspiration" and "aspiration" on the part of the OP. It's frankly not your place to judge. People who have filed BK of all people should know that.

[Flamingo]

Flamingo, I do have to take issue with you generalizing your "individual experience". It is NOT the rule that a BK hurts certain employment or security factors. I have actually discussed this with the "decision makers" on these issues.

Security Clearance: BK is a "factor" but NO ONE is denied a security clearance simply because of a BK.

Financial Jobs: In this situation, it has more to do with the decision makers personal prejudice than any formal policy. Is there a risk, yes. Is it a high risk, NO. I have seen financial planners, stock brokers, etc, who must declare a BK on their U-4, have NO PROBLEM getting or keeping employment, getting underwritten by broker/dealers etc.

My problem is that you present this as a reason not to file BK, you just can't look at it that way, because in the big picture, if someone needs to file a BK, they really have no other alternative. As starting over points it, it is a very small percentage of the job market where BK is even a "factor".

Hi HHM! I think you are viewing my "thoughts" in the wrong light as to filing BK (see my highlight of your post above). Did you read my posting just prior? In it I state..."It's just a fact but yes everyone needs to know that it's best to try to continue to go on as normal as possible and apply for that job and work at keeping good credit during those years beyond discharge so that in time it is all just a thing of the past. Filing BK is a life event - you learn from it, dust off and go on..."

No one should let a BK on their records stop them from applying for a job. As you state, some employers overlook BKs and as we all know some don't. The financial sector is usually the tough area for prospective employees to crack. Also if one needs government security clearance; note they would not renew my husband's clearance specifically because we filed Chapter 13. It is also a factor when one applies for clearance as it is stated right in the paperwork. That's just the way it is in business world.

I just used our experience that a BK's negative impact can last more than the "two years" that you mentioned in your posting and that it all depends on one's individual circumstances as to how long that impact will last and folks need to know that most of them will feel the impact of filing for a long time no matter how positive they are. For some it can go on a very long time especially if one is asked on an employment application "Have you "ever" filed for bankruptcy?"

However, as I mentioned, I don't know where I indicated that this is a reason not to file BK. I don't think I have ever stated that. I was just responding to your "two year" limit on the negative impact of filing BK. That's all. My apologies if you took it another way.

[frogger]

I want to defend the OP. I'm actually a little shocked at the judgmental attitude displayed in this thread. There any many people in this world who consider BK a fate worse than death and are extremely critical of the character of people who file BK. So it's highly ironic that people come to this thread and make remarks about a lack of "inspiration" and "aspiration" on the part of the OP. It's frankly not your place to judge. People who have filed BK of all people should know that.

The inspiration word can be pegged on me. I'm not trying to be judgmental or have an attitude. The OP appears to have given up, and that is one of the choices that can be made. I would hope that the OP would find some inspiration from others in this forum to know that bk is an option and that there is life after bk.

To each their own. Whatever the OP wants to do is fine with me. I just know that I'm moving on.

[HHM]

who consider BK a fate worse than death and are extremely critical of the character of people who file BK.

The reason for that, being GROSSLY MISINFORMED.

Calling it like we see it is not being judgmental, it is a fair question, who the heck "wants" live his/her life like that? And why not be judgmental if someone has no aspiration or inspiration? Maybe the OP will think twice about the choice. That is not being judgmental, that is called bringing some perspective.

[HHM]

However, as I mentioned, I don't know where I indicated that this is a reason not to file BK. I don't think I have ever stated that. I was just responding to your "two year" limit on the negative impact of filing BK. That's all. My apologies if you took it another way.

Fair enough. The problem is, many people use the "job prospect" issue as an excuse not to file and simply dig themselves deeper and waste more money. I apologize if I misread your intentions.