Bankruptcy experiences

Jstas

From what I know about credit history, which is admittedly not much, the best thing to do is get it straightened out. Make sure credit history is accurate even if it is good or bad and as soon as a bad mark, like bankruptcy or a debt in collections, is resolved, call the credit reporting companies and make sure that the noticed is updated immediately on the report.


Then, be patient. The more time you have between bad credit history and the next time you go looking for a loan, the better. Credit cards are a good way to get credit history but it isn't always good history even when the account was always in good standing. Also, since they are unsecured, they are based on income and other debt ratings and detract from your ability to secure loans for other things like cars, house, boats and such. They can also artificially reduce your available loan amount because even if the balance is $0.00, the credit limit is still open as available and counts against you.

If you want to establish good history, seriously, buy a car. Preferrably a new car because the loans are handled differently and usually come from a large lending institution like Ford Credit, GMAC or any number of large banks like Citizen's, Prudential, Wachovia, Wells Fargo and so on. Get your loans straightened out and once the bad debt is gone, go buy a car. Take a crap interest rate if you have to but establish some sort of payment plan. Pay it on time for a year and you can usually refinance at a better rate once you establish a good history with the lending institution that secured your car loan. Even now, with my bad history still very recent, Ford Credit, whom I have excellent history with, has pre-approved me for a Shelby GT500KR. It's a $56K car. I'll probably use that loan level to get a new pickup truck with a diesel but it shows how much and yet how little a credit rating can affect things.


But seriously, time helps the credit rating the most. Even if you have no credit activity between the last bad activity and the new activity. Also, after 7 years, any history drops off the record. So if you have good history that is 7 years old, it will fall off. Same with bad history that is 7 years old. Also, the older the history that is still on the report the better. And settled loans that get an approval rating by the lending institution don't hurt as bad even if it went to collections. So bad history isn't always as bad as it seems either.

danger boy

good points John.

10 years after i filed for ch. 7 there was an old credit account on my credit report. There was no balanced owed, and the store had actually gone out of businesss.... but 10 yrs later it was still showing up on my credit report. I had to clear it up which was pretty easy.. but even things you thought were long gone, can pop up years later.. good or bad.

ryanjoachim

Kex wrote: »

I mentioned your case to the wifey last night. She works with corporate lawyers every day as part of her job. She was wondering how come you were not able to get anyone to take on your case against the at fault drivers in those accidents, since their insurance did not cover either of the lost income claims you would have had against them. Her clients are never directly involved in this kind of work (obviously, since they're in the corporate field only), but those who do usually work for a portion of the proceeds, and they almost always get something (apparently).

Did you ever look into this option at any point? If it's not too late, I could ask her for more details, but she seemed surprised that you were filing for bankrupcy at all given the circumstances described in post #5 and 10 above.

We never really understood the whole process, and what we could get in court and what we couldn't. Also, by the time my accident came around we couldn't risk going to court in case for some reason we didn't win, and had to pay the attorney out of our own pockets.

I was 24 at the time, and fairly naive about the "world" at large, so i'm sure that had something to do with it also.

Jstas

danger boy wrote: »

good points John.

10 years after i filed for ch. 7 there was an old credit account on my credit report. There was no balanced owed, and the store had actually gone out of businesss.... but 10 yrs later it was still showing up on my credit report. I had to clear it up which was pretty easy.. but even things you thought were long gone, can pop up years later.. good or bad.

Yeah, I had the problem too. RadioShack had me for two credit accounts. They use Citibank to underwrite their credit cards. They switched from another bank, I think it was HSBC, years ago. When they switched, HSBC never closed most of the accounts because they said they sent notice to customers and asked if they wanted to keep accounts open but I never got anything. I couldn't charge anything to the account but they could charge me for keeping it open. When I checked my credit report and discovered such things, I did research online and found a class action suit for it. I applied to be included. I did not qualify for any monetary reward because my balance was $0 but I did qualify to have fees wiped/refunded, the account closed and the lawsuit referenced in my credit report for the credit history for that account.


Oh and I have dealt with HSBC and if MBNA wasn't in the picture, HSBC would be the largest bunch of crooks I've ever seen in my life. MBNA takes the cake though and Citibank is a very close 3rd. Oh and Chase will smile excruciatingly and tell you how highly they think of you and your mother while simultaneously pushing your mother in front of a speeding train behind your back.

ryanjoachim

I'd have to put BoA in front of Chase at the moment. Haven't had anything but issues and crappy CS from them for the 10 years i've been with them. Just recently switched to a small local bank here in town, and so far am much happier.

Jstas

ryanjoachim wrote: »

I'd have to put BoA in front of Chase at the moment. Haven't had anything but issues and crappy CS from them for the 10 years i've been with them. Just recently switched to a small local bank here in town, and so far am much happier.

At my old job, we had BofA for our corporate cards. They changed from AMEX Bidness to US Bank and then to BofA. AMEX was beautiful! The policy was charge first, ask questions later. US Bank's policy was ask questions first, then ask more questions and keep asking questions until the problem goes away. It usually did 'cause I'd use my personal AMEX card at that point, rightfully fed up with US Bank. BofA's policy was ask questions first then tell you to go suck an egg. Hated both of them. Loved my AMEX Corporate Gold Card!

hearingimpared

ryanjoachim wrote: »

Well, it's official now. Just wrote a check for $1300 to the bankruptcy attorney, and got the ball rolling.

We (mostly my wife, but her name is mine so I guess I get blamed too!!) have almost $20k in debt right now, from a credit card and several medical bills. I know this may not sound like a lot to some of you, but i'm the only one able to work right now, and with my wife going to school (and using financial aid to pay for child care) the bills have all gone to collections except for house-related items.

Has anyone had to go through this whole process? Was it worth it in hindsight?

I'm really interested in hearing other people's experiences through this process before, during, and after everything is said and done.

How hard has it been for you to live with that on your credit report?

I went through it in 2002. I was in the hospital for 10 days. My employer effed up my health insurance because I was new with the company and I ended up with a $267,000 hospital, doctor, tests, and pharmacy bill. Not to mention that I was out of work for almost a year before that due to contract expirations and the IT market at time going south which caused me to default on a number of debts. I had to delclare Chapter 7 as there was no way I could declare Chapter 13 as it would have taken my entire lifetime to pay back over $300,000. I had to borrow the $750 from family for the lawyer to proceed with the bankruptcy. I paid that back in $2005.

The bankruptcy was discharged 2/2003. I still fall under the umbrella of time it stays on my credit report however, I've purchased a house, received credit cards, and a few other items on credit since then and had no problems at all as well as great great interest rates.

I hate not paying my debts. It's a **** not being able to pay your debts but sometimes life throws you a wicked curve ball and you have to do what you have to do. Nothing to be ashamed of IMHO if you made a full out effort to pay those bills and couldn't. Better to take what is availible as a baleout than to be sleeping in your car.

ryanjoachim

Well, it certainly made sense for you to file for bankruptcy, although the circumstances were very ****.

It's nice to hear that after all that you were able to get back on your feet.

hearingimpared

ryanjoachim wrote: »

Well, it certainly made sense for you to file for bankruptcy, although the circumstances were very ****.

It's nice to hear that after all that you were able to get back on your feet.

Well the really sad part about it was I was trying to pay off the debt with my pensions, stocks and 401Ks which was a major mistake because shortly after the 2002 hospitalization I became disabled and then had to become completely dependant on Social Security Disability which is about 6% of what I was making when working.

ryanjoachim

hearingimpared wrote: »

Well the really sad part about it was I was trying to pay off the debt with my pensions, stocks and 401Ks which was a major mistake because shortly after the 2002 hospitalization I became disabled and then had to become completely dependant on Social Security Disability which is about 6% of what I was making when working.

Well, that's total ****!

I've been thinking about taking some classes and getting my certificates for various things (MCSE, etc) and doing some contracting in my downtime.

Well, typing that brought another question to mind...I wonder if bankruptcy will effect my ability to get grants/loans through the government?