What is the downside for filing for personal bankruptcy? 20 Answers as of June 26, 2013

I have unpaid medical bills and an unpaid payday advance loan ($500), I am several thousands of dollars in debt. If I should have to file for personal bankruptcy, how would this affect future rent and car loan situations, etc.? I have bad credit already

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Mauritz Van Niekerk, Attorneys at Law
Mauritz Van Niekerk, Attorneys at Law | Christiaan van Niekerk
If you have bad credit already and the only way to get good credit again is to pay everyone you owe but you cannot do that you have one option only and that is bankruptcy.
Answer Applies to: New York
Replied: 7/24/2011
Rosenberg & Press
Rosenberg & Press | Max L. Rosenberg
First, Pay day loans are almost always a scam. Even after you file bankruptcy they will continue to harass and attempt collection and in some cases steal, sell, and use your identity. Second, filing for bankruptcy for several thousand dollars of debt is about as good an idea as taking out a payday loan. The downside of filing a chapter 7 is that it remains on your credit report for ten years, you cannot file again for at least eight years, your credit will drop, your current credit cards may cancel and if you desperately do have a legitimate need to file a bankruptcy, you will have already wasted your filing. Please see an experienced qualified attorney. Certain things that seem easy in the begining may only make your life that much harder in the end. E.V. Cooke wrote, "Perhaps the reward of the spirit who tries is not the goal but simply the exercise." Try to stay afloat, but don't try to file your own bankruptcy.
Answer Applies to: Connecticut
Replied: 7/22/2011
Mercado & Hartung, PLLC
Mercado & Hartung, PLLC | Christopher J. Mercado
Filing BK will have a negative impact on your credit. However, the debt would likely be discharged
Answer Applies to: Washington
Replied: 7/22/2011
Law Office of Harry L Styron
Law Office of Harry L Styron | Harry L Styron
The effect depends on whether you expect to be able to pay off all you owe. If you do then you will be able to rehabilitate your credit faster than if you file bankruptcy, which will remain on your credit report for 8 years after you file. If you don't then there is no real difference.
Answer Applies to: California
Replied: 7/21/2011
Could make credit worse but that's it.
Answer Applies to: California
Replied: 7/21/2011
    Apple Law Firm PLLC
    Apple Law Firm PLLC | David Goldman
    You should speak with a bankruptcy lawyer to discuss more about your situation and if there will be adverse consequences above what you are already facing because of your existing credit problems.
    Answer Applies to: Florida
    Replied: 7/21/2011
    Burnham & Associates
    Burnham & Associates | Stephanie K. Burnham
    If you already have bad credit bankruptcy is not likely to make it worse. Some lenders may not issue you credit, but there are always other lenders ready to help you rebuild your credit. A lot will depend on your circumstances and whether or not the landlord or creditor will listen and consider your explanation.
    Answer Applies to: New Hampshire
    Replied: 7/21/2011
    Bird & VanDyke, Inc.
    Bird & VanDyke, Inc. | David VanDyke
    If you have bad credit already filing may improve your credit.
    Answer Applies to: California
    Replied: 7/21/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    Well, the bad credit will not get better by itself. You will have difficulty getting new loans, but you can't get any now anyways. You will have to rehabilitate your credit after bankruptcy by getting a small secured card and using it carefully.
    Answer Applies to: California
    Replied: 7/21/2011
    Lake Forest Bankruptcy
    Lake Forest Bankruptcy | Anerio V. Altman, Esq.
    The most common chapter of Bankruptcy that people file is Chapter 7 Bankruptcy, so let's begin there: Chapter 7 Bankruptcy downsides: 1. Your credit score MAY drop 50-100 points. In your case if it is already shot, BK may actually improve your credit score after you file because you will no longer be delinquent on anything. 2. You lose any credit cards that you have, no matter what you owe on the cards. 3. You may have assets that can be liquidated. Although, in California, we tend to look towards large assets for liquidation, rather than small ones; We want cash in BK, not grandma's hand knitted sweater she made you. 4. There is a stigma to Bankruptcy. Some people have hangups about Bankruptcy. Your decision is whether you want to trade off people trying to levy judgments upon you, taking your assets, harassing you at work and on the cell phone, or filing Bankruptcy and having someone think less of you BUT be unable to do anything to you. Chapter 13 downsides: 1. As above, but now you are on a debt payment plan for 3-5 years. 2. You don't lose any of your assets, but now it becomes difficult to acquire a loan for a car or house. Chapter 11 downsides: If you are on this website, you aren't filing a Chapter 11.
    Answer Applies to: California
    Replied: 7/21/2011
    Law Offices of Joseph A. Mannis
    Law Offices of Joseph A. Mannis | Todd Mannis
    It probably wouldn't, as you said your credit is already bad. In fact, it would actually give you a chance to rebuild it. Think of it this way. Right now, you're in the middle of the Pacific, treading water or sinking. You'll continue to tread water or sink to the bottom. The bankruptcy is your fresh start, and you now have a starting point from which to rebuild your credit. Otherwise, barring an incredible economic recovery, you'll remain in the same status you are now - lousy.
    Answer Applies to: California
    Replied: 7/21/2011
    Law Offices of Sheryl S. Graf
    Law Offices of Sheryl S. Graf | Sheryl S. Graf
    Filing for Bankruptcy may actually improve your credit score. How much of a change in your score will depend on your personal circumstances. Once all your debts are discharged, you no longer owe anyone any money (and no longer have a huge debt burden that you cannot pay holding you down). Some financial institutions openly solicit business from persons who have recently filed under Chapter 7. Additionally, if there are compelling reasons for filing under chapter 7 that are not within your control (such as an illness or an injury), some credit rating agencies may take that into account in rating credit after filing. The bigger question is: Should I file for Bankruptcy; and if the answer is "Yes", when should my case be filed? The answer depends on the status of your dischargeable debts, the nature and status of your nonexempt assets, and the actions taken or threatened to be taken by your creditors. As a general rule, I would not recommend filing under chapter 7 until all anticipated debts have been incurred because it will be another eight years before you are again eligible for a chapter 7 discharge. For example, a debtor who has incurred substantial medical expenses should not file under chapter 7 until the illness or injury has either been cured or covered by insurance, as it will do little good to discharge, say, $50,000 of medical debts now and then incur another $50,000 in medical debts in the next few months. If hostile creditor action threatens your exempt assets or future income, then your case should be filed immediately to take advantage of the automatic stay of collection activity that accompanies the filing of a chapter 7 case. If a creditor has threatened to attach or garnish the debtor's wages, or if a foreclosure action has been instituted against the debtor's residence, it may be necessary to file a chapter 7 case immediately in order to protect the debtor's interest in the property. This information is general and should not be construed to be formal legal advice, nor the formation of a lawyer/client relationship.
    Answer Applies to: California
    Replied: 7/21/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    I'd need to see all your numbers to evaluate the pros and cons. For some people, long term, a bankruptcy actually may improve a bad credit score, and there are many other pros and cons besides credit reports. The question you asked is exactly why you want to sit down with a bankruptcy lawyer and have him review your actual numbers.
    Answer Applies to: Georgia
    Replied: 7/21/2011
    Financial Relief Law Center
    Financial Relief Law Center | Mark Alonso
    If your credit is bad already, then there probably is much more damage that bankruptcy could do. Negative credit reporting stays on your credit report for about 7 years, whereas bankruptcy will stay on your credit report for up to 10 years. If you file for bankruptcy, and you are in between leases then this could impact your ability to find another place to rend because often times landlords or rental companies will look at your credit report to determine if you are reliable enough to rent to. It is up to each individual landlord to make this determination on their own. Getting approved for loans may be difficult after you file for bankruptcy, but as time goes on, you may be able to obtain credit for car loans, etc. Again, this is all up to the discretion of the creditor and if they choose to extend you a loan. It may be that they will do so, but just at a higher interest rate. The reality that many creditors should be reminded of is that, while you may have just filed for bankruptcy and you may not be an attractive candidate to extend credit to, if you did just file, you cannot file a chapter 7 again for another 8 years. Therefore, any credit you obtain from them would not be able to be discharged anytime soon, so you would definitely be on the hook for it, so you could argue 'what would they have to lose in giving you a loan?'
    Answer Applies to: California
    Replied: 7/21/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    A bankruptcy stays or your credit report for a long time, namely, ten years. You may want to explore alternatives to filing, such as debt settlement with a consumer credit counselor.
    Answer Applies to: California
    Replied: 7/28/2011
    Indianapolis Bankruptcy Law Office of Eric C. Lewis
    Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
    Once your credit is shot, it can't get worse! Bankruptcy helps to rebuild your credit and most people are able to finance new vehicles about six months after discharge and get a mortgage about two years after discharge.
    Answer Applies to: Indiana
    Replied: 7/21/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    Get rid of present problem first then worry about future.
    Answer Applies to: California
    Replied: 7/21/2011
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