Personal bankrupcy: Worst decision ever or best thing you could've done.

My son had to declare bankruptcy when he gave his wife of a few weeks the power of attorney before he shipped out on an aircraft carrier. She proceeded to run up tens of thousands of dollars of debt and then disappeared,, taking everything they owned, except his car, which she stopped making payments on and it was repossessed, and stopping payments on their lease, which resulted in a default.

His bankruptcy judgment was entered, and it cleared out all his debts, leaving him destitute, but owing nothing. As the years passed, it has not had much of a problem with his debt, he has built up a new credit rating, and is doing as well as can be expected.

Wow. She really ripped him off. Sorry to hear it.

However, in answer to my question it would appear bankruptcy was a good thing for him in terms of finding a solution.

It would be very much harder for an older person of modest means since the possibility of developing a lucrative career path and recovering from losses are far more difficult [and would be made even more difficult by a bankruptcy] and the cloud of bankruptcy might be with one as long as one lives.

Bankruptcy rulings also include stiff measures if one ever falls behind again for any reason. One late mortgage payment and one could lose one’s house. And one could never refinance to lower interest rates or get low interest credit card offers. Some employers will refuse one if a bankruptcy has been filed. It is in some ways not dissimilar to problems ex-convicts face. Avoid it, especially if you are older.

After an absolutely lethal lawsuit I had to consider it but thank whatever there is to thank, I didn’t and am stabilizing without it and my credit record remains spotless.

I see. A good answer. Thank you. The ‘stiff measures’ is the bit I needed to hear. There’s plenty of copy out there telling you to beware but with little reason given as to why with detail.

Many people who declare bankruptcy do so because of medical expenses.

This is exactly what i have been trying to tell people on Answerbag and Fluther for years. that, plastic credit will ruin your lives. its so easy to bring out a credit card, sign your name, and be gone. this will give you a power-feeling for a while. then comes time to pay what you have bought and whamo….......not enough money to live and pay for the plastic credit cards you have used.

Bankruptcy is not fun. a friend of mine declared bankruptcy and it has devastated him and his credit worthiness. his life will never be the same. he declared a Chapter 13 and paid it off as required by the court. the aftermath has been a nightmare for him. it will take 10 years before creditors will even talk to him.

This is a serious decision to make. some people have a choice, some do not.

Many years ago I had to do it—at least, I thought I had to do it—and though I don’t regret it today, I’ll never forget what a dreadful experience it was.

Reply offline if you’re interested in more detail.

@john65pennington Anyone with two ounces… ok three ounces of self-control can handle a credit card just fine.

@Doppelganger19 What was dreadful about the experience?

I can’t say from personal experience. I feel for people who lose everything because of medical expenses or other things out of their control…it just isn’t right. However, on the flip side of the coin, I have also seen people live way beyond their means, buying whatever they fancy, including expensive vehicles, vacations, expensive meals out, clothing and anything else they thought they deserved, and then file bankruptcy.
I always hate the idea of people spending money they don’t have. Someone has to pay for it, often the general public in higher prices. I do believe it should be the very last resort, and I do prefer the one with a payback plan, vs writing it all off.

I think the medical expenses issue is interesting. There’s payments to doctors and then there’s the extra time and care you need to devote to a loved one which reduces your ability to earn on an uncontrolled basis. Consequently even three ounces of self-control may not suffice to ward off credit card debt.

I have never filed BR, but have known people that have.

Getting into a financial predicament due to unforseen hardship is one thing, but, I have known of plenty that pre-meditatedly go for the bankruptcy while proceeding to charge their way into getting as much ‘stuff’ as they can beforehand.

Dispicible.

But surely these would be assets they’d need to sell off if they declared bankruptcy?