Quick Bankruptcy Insights
It’s been a while since I posted- my wife had her baby and I’ve been EXTREMELY busy, as you can imagine. Here’s a few little Bankruptcy insights for you…
While I strongly push the idea that filing BK is a bad idea for most people in foreclosure, there are some circumstances where it’s a great idea. For example- if you earn $60k/yr, and have $150k in credit card debt and are upside down on your property, it MIGHT be a good idea to file BK. However- I had a reader contact me from this site asking if they should file… they made $80k/yr, had $10k in credit card debt, and were currently employed. For them, I strongly suggest that they DON’T file BK. They can pay $10k off in credit card debt pretty quickly if they just restrict their lifestyles a bit.
In the first scenario, it could take 10-15 years to pay that debt down. That’s years of stress, bad credit, lifestyle impact, etc. You have to make a decision whether or not it’s worth it to you. You can file BK, be free of your debt and have your credit cleaned up within 2-3 years at the most, if you’re diligent about it. Bankruptcy is a right we have as American Citizens, it’s there to be used for a specific purpose. Using it for the right scenario can be very worth while. Obviously, the key here is to learn from your mistakes and make sure you don’t get into that same situation again.
Remember, filing Bankruptcy doesn’t save your home. It merely pauses the foreclosure process for a month or two. 98% of the bankruptcies I see filed from people in foreclosure ultimately end up losing the home anyways. The kicker is not only did they lose their home, but now they damaged their credit for the next 7-10 years to boot.
Other Must Reads
Click Here to Subscribe to Arizona Foreclosure Realtor and get Daily Updates by Email
You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
September 3rd, 2008 at 2:20 pm
We owe about $15000 in unsecured debt. We have 3mortgages, our two vehicles are paid. We are current on all 3 mortgages. A friend came to us and wants to give us a home free and clear. Should we file bankruptcy? should we just let our home with 3 mortgages go into foreclosure and just have a fresh start? What would we be liable for. Our credit is already in the toilet. Thanks for your help.