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Ask Susan Responses
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Bankruptcy: General |
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More Ask Susan |
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Can a student loan in the state of Texas be dismissed by filing a chapter 7 or chapter 13? -Troy |
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Dear Troy,
It is a common misperception that all debts will be dismissed if you file for bankruptcy. In reality, the general rule is that debt owed to a government entity is not dischargeable. This includes student loans, IRS tax debts and property tax debt. You might wish to visit with an attorney for more specific information about bankruptcy.
Sorry to deliver the news,
The Advice Team |
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I'd like to hear from people currently in bankruptcy, what is the worse case scenario which happend to them? In black and white, the numbers show that bankruptcy is our best option for our future. However, I am very leary of bankruptcy and would like to get some good solid advice from a banker or collector. How will our credit affect our future borrowing power? -Tony |
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Tony,
I am not an attorney, but I will try to answer your question to the best of my knowledge. As you may know, a notation that you filed for bankruptcy will remain on your credit report for 7 to 10 years, depending on the chapter you file. The most obvious ramification of filing bankruptcy is the difficulty you may have obtaining any type of new loan. And, if you are able to obtain new credit, it may be hard to find a loan with affordable repayment terms. Bankruptcy can also affect your ability to rent an apartment, obtain affordable insurance and obtain some types of employment.
All that being said, bankruptcy exists for a reason and is necessary in some situations. I recommend you schedule a bankrutpcy counseling session by calling 800-762-2271.
The Advice Team |
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If I establish a debt repayment program, would it be considered bankruptcy? -Penny |
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Dear Penny,
It is not a bankruptcy; it’s an alternative.
A debt repayment plan is a voluntary program for both you and your creditors. MMI serves as a neutral, third party negotiator. The plan allows you to repay your debts—with terms you can live with—without having to file for bankruptcy.
MMI does not report to the credit reporting agencies. Call to get started today.
The Advice Team
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Should I file bankruptcy? I have about 35 to 40 thousand dollars'worth of debt. I have failed with debt management agencies in the past. In addition, I have fallen into another trap-- check writing with three different cash advance stores, and I don't know who to repay first. Can somebody help? -Randy
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Dear Randy,
One reason debt management can be such an effective alternative is because it helps teach people responsible spending habits-- something that bankruptcy does not do. If you want to try a debt management plan again, please call 800-762-2271. Your counselor might also be able to help you with some budgeting techniques.
If you do choose to file, please understand that you will have to be extremely committed to making some life changes so that you do not get into this situation again. You should also know that not all debts are dischargeable. Debts not dischargeable in bankruptcy will generally include back taxes less than 3 years old, student loans, alimony, child support and debts incurred through fraud. To avoid foreclosure or repossession, you must make home and auto loan payments.
Best of luck with your decision,
The Advice Team |
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We owe about $35,000. Our income is about $85,000, our rent is $1,100, and we live in a high tax state. Is bankruptcy a better option? Also, what would our monthly payments be? Thank you for your help. -John |
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John,
The decision to file for bankruptcy is strictly a personal one. We cannot tell you whether you should or shouldn't file for bankruptcy. All we can do is give you advice and alternatives.
Our suggestion is to call MMI at 800-762-2271 and speak to a financial counselor. Your counselor will analyze your income, expenses and overall financial situation; discuss possible solutions and make recommendations for you to consider.
Good luck with your decision,
The Advice Team |
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What's the worse that can happen if I file for bankruptcy? I think you should know that I am a student and that I have several loans out. I just want to file for bankruptcy as far as the credit cards go. -Bikim |
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Bikim,
If you file for bankruptcy, a notation that you filed will be entered on your credit bureau file. This derogatory notation can remain on your credit bureau file for 10 years. While this bankruptcy notation is on your credit bureau file, you could be prevented from getting credit, a job, insurance, an apartment or opening a checking and/or savings account.
Best of luck with your decision,
The Advice Team |
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