Ramifications of filing for bankruptcy

[Will]

On another thread, a reader asked:

I'm trying to get to the root of the consequences of bankruptcy. It is a major decision in my life and I would like to explore the full extent of its ramifications.

That's a very important question which I'm sure affects a lot of Wise Bread readers. Unfortunately, that thread got a bit heated as the focus shifted towards the moral responsibility of paying one's debts.

In this thread, I hope we can focus on just the technical financial ramifications, and avoid passing judgment on any individual's personal motivations for filing for bankruptcy. Don't get me wrong, the moral discussion is interesting too, but I hope we can discuss that in a separate thread.

[Markwallace]

I too would like to enter into an objective and comprehensive discussion regarding bankruptcy.

It really is as taboo as it gets when it comes to finances. Seems like everyone knows someone, who knows someone who went through it... but it would be refreshing and informative to really break it down into the particulars of the initial symptoms and looming after effects.

Even if you never can imagine yourself making such a decision, it might be helpful to gain a greater understanding so as to perhaps emphasize with others who aren't so lucky.

Great thread Will.

[Frugal Fannie]

As posted in the other thread, bankruptcy or bad credit in general can cause you to:

• lose a job opportunity when they check your credit report
• get higher rates for loans or insurance
• have trouble getting signed up for utilities including cable

Under the new bankruptcy laws, is it still seven years before it doesn't affect your credit?

[gt0163c]

Financial issues, including bankrupcy can also affect your ability to be given or retain a US government security clearance. For most people, this is not an issue. However for people working or wishing to work in certain fields this could be a major set back.

[jdp]

http://www.uscourts.gov/bankruptcycourts.html

http://www.quamut.com/quamut/personal_bankruptcy

Actually the OP of that thread stated they KNEW the ramifications. The OP was wondering if its ok to "use up" the available balance they have on their CCs before declaring bk which is very much not allowed and IS typically addressed by smart creditors in a hearing if its suspected.

I mean, I am going to be free and clear irregardless by the end… why not take advantage of it.

I'd say he had most of the ramifications covered in his responses to everyone's "possibles".

All one needs to do to reflect on the possible ramifications is do what he did - look at every aspect of your life where credit REPORTS (not just credit) is used. That is different for all people. If you've never done it, get a free credit report at https://www.annualcreditreport.com/cra/index.jsp

But you would need to do this over a period of time as "inquiries" only stay on so long (not as long as negative/positive information about actual accounts). Inquiries will show you nearly everyone who sees your info.

[Markwallace]

Originally Posted by jdp

Actually the OP of that thread stated they KNEW the ramifications. The OP was wondering if its ok to "use up" the available balance they have on their CCs before declaring bk which is very much not allowed and IS typically addressed by smart creditors in a hearing if its suspected.

Frankly, Will, I believe this member needs some form of warning. This is flame bait at its worst. This is the essence of trolling, trying to attack someone personally while managing to sideswipe an important topic.

JDP, you should be ashamed of yourself. If you have nothing objective and informative to say, then go else where. Will, or I, are not going to put up with your behavior.

[jdp]

Frankly Will, I was trying to participate in a helpful and factual manner. <edited to remove that question, I found it in my profile page thanks>

[Will]

Originally Posted by jdp

Actually the OP of that thread stated they KNEW the ramifications.

I probably shouldn't have started the thread with any specific quotes. While Mark's thread inspired this thread, let's continue this discussion without referencing him specifically.

Mark, relax a bit and see what people have to say. JDP is not a troll. I would've preferred that he didn't refer back to your specific situation, but his post is mostly a cost benefit analysis and it did not pass any judgments on your personal decisions.

I'm working to get professional debt counselors on our forum to answer these type of questions. But I can't do that if every question erupts into a fight.

[kav122]

Will, can we in another thread, talk about the moral responsibilities or lack thereof involved in the bankrupcy process? I find that point very interesting, without in any way saying that Mark is or is not morally irresponsible.

I would like to discuss it more in the societal view (how the process is set-up, why employers have the right to pull credit and "pass judgement" without knowing the how's and why's, the stigma or lack thereof felt by the filer) rather than pinpointing one person.

Could we do that or is it off limits?

[Will]

Originally Posted by kav122

Will, can we in another thread, talk about the moral responsibilities or lack thereof involved in the bankrupcy process?

That's cool.