What is the downside to bankruptcy

[RLOPE]

while explaining my dire financial situation to a friend the other day, and ending with... ' so, it looks like we'll be filing for bankruptcy in the first quarter of 2011' he responded with, 'so then, what is the downside to filing bankruptcy?' - - to which I had no answer.

Can anyone offer insight? ? ?

[df04527]

What's the downside? Your credit report/scores is the first thing that comes to mind.

[drowning123]

Credit report and scores can bounce back. The negative effect is only temporary. Renting may be an issue, but so what, you can always find someone to rent to you. You can still get loans with high interest, but the point is, you can still get loans. You can still purchase a house in the future. Time is on your side when it comes to bankruptcy. I don't really see any devastating downside.

[HHM]

Hmm, down side....debt free, credit recovers in less than two years, relief of financial stress, ability to focus on what is important, presumably enough income to actually pay your bills....hmm, no downside really comes to mind

[AngelinaCat]

You might lose a friend or two jf you disclose the fact that you filed BK to them--but then, they really weren't your friends to begin with, were they?

[BKlooker]

Well, i do see a downside. If you are in the financial business sector, it may be hard to find a job for a little bit, especially if you need security clearance of some kind. In addition, as some stated, getting loans on cars, new credit cards, homes, etc. is going to be a challenge for a couple years (at least getting it for decent interest rates). Some people feel some 'stigma' about filing, in fact i think that is common. In addition, if you have property you need to surrender, that might be hard to do, depending on what it is (a home you have had for several years/decades, etc.). Your credit will indeed tank for a while, but if you don't really need to buy a new car or new home for 2-3 years and are comfortable renting, this is likely a non-issue, and you can rebuild suprisingly fast if you are smart and research how.

But as others have said, the benefit is you are debt free and will (should!) have enough cash accumulated within a few months from saving on debt payments that you will likely have your own 'safety net', which will likely be greater than any credit extension you may be used to. You essentially walk away from the burden of paying on debt and can focus on enjoying life again. You can essentially start fresh and learn from past mistakes. If you are wise with money, you can put away enough for a comfortable savings account holdings, etc. and won't even need to worry about owning credit (hopefully ever!).

[Pandora]

I dont see a downside either - but then again I dont care about "stigma" or what others think, so...*shrugs* Credit will recover and in 5 years, we wont have a 2nd mortgage or trustee payment! no downside to that!

[frogger]

Downside? None for me. I'm still grinning from ear to ear.

[backtoschool]

I have had absolutely no downside to filing. It was the best financial decision I have ever made. The only downside, and it is a very minor one, is that if you work in certain professions, your workplace will most likely find out about the bankruptcy if you ever switch jobs or if your company is acquired etc, and they do a background check. I found that being honest about my bk when appropriate (ie before a background check) and not trying to hide it, removed the stigma for me.

[HHM]

I have had absolutely no downside to filing. It was the best financial decision I have ever made. The only downside, and it is a very minor one, is that if you work in certain professions, your workplace will most likely find out about the bankruptcy if you ever switch jobs or if your company is acquired etc, and they do a background check. I found that being honest about my bk when appropriate (ie before a background check) and not trying to hide it, removed the stigma for me.

But even that reality is overblown.

[Egr61]

One downside is that you can't file again for 8 years. If some kind of huge unexpected bills, such as medical bills, were to come up, you wouldn't have the option of filing a Chapter 7 BK. So that's an argument for not filing unless you absolutley have to.

I just racked up several thousand dollars in medical bills from an ER visit. This was just after my discharge. I expect the vast majority of it to be covered by insurance though. I guess it's especially important to have good medical insurance after BK.

[stormy]

Filing bankruptcy was the best thing I ever did; so far, I can't think of any downside to it. I'm debt free; working on rebuilding my credit and actually have money in my savings account! This Christmas I actually have money to splurge a little bit on my kids and my grandbabies; something I haven't been able to do in a very long time.

My oldest daughter is struggling and it feels so good to be able to step in and help her because I'm financially able to.

[helpme2010]

while explaining my dire financial situation to a friend the other day, and ending with... ' so, it looks like we'll be filing for bankruptcy in the first quarter of 2011' he responded with, 'so then, what is the downside to filing bankruptcy?' - - to which I had no answer.

Can anyone offer insight? ? ?

For me:

1. I lose a future lifeline (e.g. no credit cards, no loans, no bk for 7+ years)
2. Bad credit will hurt my chances of getting a job
3. Losing my house

But the good far outweighs the bad.

[mommi2many]

No downside as far as I'm concerned. I sleep soundly now because I can pay my bills. My stress level has plummeted. My husband and I have date nights without worrying about what bill won't get paid because we wanted some couple time. My kids can now do some extra-curricular activities. I will finally be able to enjoy Christmas this year because we won't be in debt afterwards. All presents are bought with cash only. I see now downside, just absolute relief from the hell we were in.

[mamaluv]

Let's see-

I am debt free - paid my car off ahead of schedule, I have acquired 2 cc's post-BK that are paid in full every month, credit score of 679, money in the bank, planning a couple vacations for 2011...yeah I don't see a downside.