I have been considering declaring bankruptcy. Pros and cons?

I am currently thinking about bankruptcy. Is this a good way to get out of debt? I know the laws have recently changed, I live in Colorado. How exactly does it work, as far as creditors and my credit report?

Update:

I am considering declaring bankruptcy. I am only 21 and am in debt more than $25,000. How does it affect your ability for credit ratings in the future? How much will it cost to do it? I know the laws have recently changed making it more difficult, I live in Colorado, and I don't know how that affects the rules.

Update 2:

I am considering declaring bankruptcy. I am only 21 and am in debt more than $25,000. How does it affect your ability for credit ratings in the future? How much will it cost to do it? I know the laws have recently changed making it more difficult, I live in Colorado, and I don't know how that affects the rules.

8 Answers

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  • M J
    Lv 4
    1 decade ago
    Favorite Answer

    I did it and it was the best thing i ever did. I had gotten myself into credit card debt so bad i would have never gotten out and i tried to consolidate but i couldnt get any of those loans either. the only con is it going on your record but i havent seen it effect me much. good luck i hope everything works out.

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  • 1 decade ago

    The bankruptcy laws have not changed that much at all. If you make less then $38,000 with NO children you are eligible. Bankruptcy will discharge all your debt excluding child support you owe (if any), taxes or student loans. If you have a car loan or house that you want to keep all you have to do is continue paying them or you can surrender and pay nothing. It will discharge all your credit cards, misc. loans, utilities, medical bills, etc. Call an attorney for prices. Fees to file a Ch. 7 is $299.00 court filing fee no matter what state you are in. It will show on your credit report 7-10 years.

    Source(s): I work for a bankruptcy law office.
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  • 4 years ago

    I just claimed bankruptcy, i am 27 and married. i actually had been financially very well off since my early 20's, but when i got laid off while I was pregnant, everything spiraled out of control. Myhusband and I pay for everything 50/50 so without my usual big check every week, the mortgage was just not getting paid. I was the one with huge debt not him, school loans, credit cards, personal loans. We decided that with a baby on the way it was best for us to not lose the house, the only way to avoid that was for me to claim bankruptcy which would pay off all my debt but I have to repay it in reasonable installments every month. I sold my SUV and bought a car I own and is good on gas. It's still a struggle to pay the mortgage with me out of work and 8 months pregnant, i hope to be back to work as soon as possible. I dont regret bankruptcy, in 5 years it will be gone and I feel we got a fresh start.

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  • Anonymous
    1 decade ago

    Bankruptcy really is a last resort and it can be very messy and stressful. The changes in the law have made it more difficult for people to simply walk away from debt. Get help before you make a move because there are alternatives to bankruptcy.

    Here's a website with a lot of information to help you decide.

    Good luck!

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  • 1 decade ago

    Katie,

    You need to be more specific, is that whole $25,000 mostly credit cards? Anything else, student loans, medical bills?

    Do you own a car, are you behind on this also? Do you own property?

    My advice is if it's only credit cards, just stop paying. Most credit card companies won't sue, except Capital One and Discover.

    Do you work? If you work and they sue you they can garnish your wages. But why worry until it happens.

    If they do garnish your wages, then you can file bankruptcy to get rid of it all.

    El

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  • Anonymous
    1 decade ago

    DON'T DO IT! Do you own anything? Depending on the state, the court will make you sell it. Your credit will be screwed 10 years. You need to contact the folks that you owe the debt to and either arrange for payments or save and offer them less than the debt as settlement in full but before sending them the money get it in writing.

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  • 1 decade ago

    Don't do it unless you owe a TON of money.

    I went bankrupt and I didn't really owe that much, that was in 2002....I couldn't get credit for the longest time, and the credit I did get was at a huge interest rate.

    It wrecks your credit for 7 years. The plus is that creditors can no longer bother you once you are discharged.

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  • sissy
    Lv 5
    1 decade ago

    Hi Katie! You need to check out bankruptcyforum.com. Lots of great people there to help you.

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