You know, even after our bankruptcy, I still receive a lot of email and correspondence about debt relief, debt settlement, and even get periodic newsletters and “tweets” from some of the credit bureaus. Usually, I will skim through it just out of curiosity. Other times I just discard it.
Well, after reading for the “umpteenth” time about how I should not file bankruptcy and how it is so bad and sooo traumatic, I thought I might weigh in. Wow, is this a rant week or what?
First of all, filing for bankruptcy is NOT as traumatic as some people make it out to be. In fact, once I stopped listening to people that were saying comments like the ones below and figured it out for myself, filing bankruptcy was the BEST thing we could do!
I got all kinds of comments about filing for bankruptcy. I am sure you have heard some of them too:
Bankruptcy will ruin your life!
Bankruptcy will ruin your future!
Bankruptcy will ruin your marriage!
You will never get credit again after bankruptcy.
Filing bankruptcy is one of the top life changing events–and not a good one.
Sure, these scare tactics worked for a few years. I avoided filing bankruptcy like the plague. My husband and I wasted away our young adult years working our butts off to try and do the right thing and get our debt paid off. We sunk deeper and deeper.
Being in debt was ruining our lives.
Being in debt was ruining our future.
Being in debt was putting stress on our marriage.
When we stopped listening to the naysayers, and started looking beyond the box, we realized filing for bankruptcy was a way out of our debt hell. After all was said and done, I don’t have one regret. I am not glad we ever got into debt in the first place, but I am so glad that we no longer have that black cloud over our heads.
Endless collection calls, credit card minimums that were larger than most people’s car payments, and the endless “what ifs” were driving us nuts.
Now, over 1 year after filing bankruptcy, I realized that most people that told us NOT to file for bankruptcy were people that:
Did not know anything about bankruptcy.
Had something to gain by US not filing bankruptcy. (Debt settlement programs, credit counseling firms…creditors)
Of course there are some people that say they regret filing bankruptcy for their own reasons. I am not one of them. Either is my husband.
Look what is going on in the word today. Filing bankruptcy is nothing compared to being homeless, having no food to eat or clothes for your children to wear.
I didn’t write this to advocate filing bankruptcy. I just want anyone who may be looking into their options to know, that from our firsthand experience, filing bankruptcy was not a bad thing.
Tags: Bankruptcy, Debt and Bankruptcy
Hello!!
I’ve been following your blog for years now and I love it!! I’ve been rooting for your family all this time and I am so happy to hear that your debt is now a soon distant memory.
I have a debt question for you though. I have found myself in a financial pickle. Unfortunately, it is due to someone else’s irresponsibility. Anyway, I recently have a charge off. The date of first delinquency is December 2008. Charged off Dec. 2009. I settled the account for less than amount owed on March 2010. It should hit my credit report later this month. When would it fall off my credit report? I keep hearing different things regarding this. Is it 7 years from the date of first delinquency, 7 years from charge off, or 7 years from last payment (in my case March 2010).
Also, from your research, how soon can my credit start to recover after this charge off? I have another old charge off on my account that will fall off in June of 2013. A 30 day late payment that occurred on April 2008. And another account with a balance that probably has a bunch of late payments in the past, but currently the entire account is not on my Experian report.
Keep up the blog. Debt and financial crisis is such a taboo subject, it really helps to know that you’re not alone dealing with this.
Thanks again,
S.
You are right, debt and finances is a taboo topic, yet so many people are suffering right now with it. It’s sad really.
I was just coming on here this morning to talk about my husband’s credit report and a charge-off that I am disputing (since it was included in our bankruptcy). You just asked a good question because I myself have been looking into this.
From what I am reading and from our experiences, a charge-off falls off exactly 7 years after the first month of delinquency. I am currently looking at my husband’s credit report as I write this.
For example:
February 2008 he was 30 days past due on a credit card. It was considered charged-off as of July 2008. His credit report says this account is scheduled to continue on record until February 2015.
So to me, it looks like it stays on 7 years from the delinquency, not from the date it was charged off.
In your case, it looks like they are going to go by December 2008 (if that was your first 30 days of being delinquent) not when you settled in March. So December 2015 looks like your magic number.
What you may have been able to do was negotiate with the creditor with “I will settle but I want you to report my account as closed and paid in full” or something to that effect. That could have helped you out. There is always the coulda, woulda, shoulda though…
So even though you paid your debt off, it may have stopped the collection efforts, but did little to help your credit. I know, it is not right.
You are right, as time goes by, the charge-off will not make such a negative impact on your report.
Now as far as the late payment, when we were late on our car payment in 2008, Honda reported it to the credit bureaus. Reading through our reports, that negative is not going to go away until September 2015…so 7 years for that one late payment.
Me personally, would pull my report 7/2013 and make sure your charge off that was supposed to fall-off in June 2013…fell off. It should and most do. If not, all you need to do is dispute it with the credit bureaus and they will take it right off since the statue of limitations is up.
As far as Experian not showing the account, they were horrible with our reporting. My BK didn’t even show up on my Experian report. Your account may show up one day, it may not. With them, I am clueless…lol
Good luck with it all. I hope I answered your question. Remember, I am no expert here. Well, you read here so you know that already.;) This info is just what I have learned from our experiences and from reading about this stuff for hours upon hours.
Thank you for your speedy reply!!
It truly helps to read other people’s experiences with debt. My credit was pristine four years ago. I never had one late payment and then one stupid mistake has caused all this grief. Like you, it has caused a lot of stress, anxiety, sleepless nights, and just that yucky helpless feeling.
In the past two and a half years, I have paid off over $18K off my credit cards. That was the first half of my journey. This past weekend, I’ve decided to tackle the second half. Due to the recent charge off, three of my excellent standing cc’s were closed. I have two remaining cc’s in excellent standing with a zero balance that I pray will remain intact. Hopefully, in the next two years, I’ll be in a much better place financially!
Usually how long does it take for your credit to recover from past charge off’s and late payments? Also, since your BK was discharged, have you run into any obstacles due to the BK?
Again, I applaud you and your husband’s effort to become financially secure. There is a light!
Way to go! You yourself are on your way to cleaning up your credit and getting your finances under control. You know, things happen and it only takes one little mistake to screw up your credit. It’s done. All you and I can do is move forward and repair what we can, and try our hardest not to make the mistakes that we have.
As far as the charge-off’s, in time, they will have less of an impact on your credit–as long as you keep current on your existing accounts now.
If it makes you feel any better, in the line of work that I do, I deal with all walks of life…the rich and the poor. I have doctors that are late paying their bills to our company. We just had a law office close their office. They were past due on their bills from us for months. So it goes to show that everyone is in the same boat right now. Geese, bill collectors are calling my work nonstop for fellow employees who are late on their car/credit card payments. I just sigh…thankfully it is not me they are looking for this time!
My husband works on the field and goes out to some houses that if you drive by you would never suspect are pending foreclosure, etc. He hears the stories all day long. Boy do I get an earful at night. lol
I would assume with how the economy is going, the way credit is viewed is going to have to change. It seems everyone is late paying something!
As far as running into obstacles since our BK, none yet. Of course we haven’t really applied for anything yet and don’t plan to in the near future. I do one day…want to buy a home.
Best of luck to ya! It seems you are on the right track already!
I can’t tell you how refreshing it is to talk openly (although anonymously)about debt. I kept it bottled up for so long that once I decided to let two friends in on my nasty secret, I can’t stop talking about it!
I am in the same boat I was three years ago. The only difference is that I am more aware now. I will get these paid off! I will rebuild my credit! I just have to be patient and let time do it’s thing.
Thank you again for being an “ear”. I look forward to all your future updates.
It is refreshing to let it out, isn’t it? You will get those last bills paid off soon. You seem determined enough!
Thanks for being an “ear”? Right back at ya!