What is the downside to bankruptcy

[drowning123]

I see a common thread here - no pun intended. To the OP: I guess your answer is "There isn't really a downside."

[andy158]

1. We will be debt free in 3.5 years. No payment to anyone after that except mortgage payment.
2. Crammed down vehicle to 1/2 of loan balance and am no longer paying $400/mo for a 6 year old car.
3. Learned what is necessary to live and have become quite the frugal shopper. Gave up no creature comforts.
4. Not concerned about FICO scores. The credit card banks wrecked that before we filed.
5. Have an empty mailbox most days and a phone that doesn't ring 18 hrs a day.
5. Best of all we learned to manage money and not live paycheck to paycheck. We even have a small savings.

Can you say nirvana? No downside here.

[drowning123]

Yes, when children are involved, I guess it can be touchy when it comes to moving. My son is 10, and I've made it all sound positive, which it is. Right now I live 2.5 hours from work and I've told him that we can move somewhere where I can be a half an hour from work, which means more time with him! He's not totally for it, but he understands what I mean about it being a good thing. He doesn't know about the bk, though.

[hughewil]

We will lose our house, the only home my daughter has ever known. We will have to move out of the small town where we live (no houses for rent) so she will have to switch schools and leave her friends. It tears me up that it will have such an impact on her, but There is nothing else we can do at this point we are to far in the hole.

What really sucks is there are so many empty houses in our neighborhood selling for 1/2 of what they cost when we bought 9 years ago, but no way we could get a loan to buy one.

[debee]

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.

This reality is inflated just right for me. It's an issue in the company that employs my spouse. Being frank about it is the best way to go. Once that's done, there's no need to worry about it coming back to bite - anything, anyone, anywhere.

[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.

[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.

[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.

[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.

[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.

[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.

[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.

[frogger]

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

[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!

[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!).