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Hi, I have over 10,000 in credit card debt, and i have no way to pay
it off. I am considering bankruptcy but I have heard horrible things
about it. How fast can I start to re-build my credit. I am looking
forward going to harvard, but I would like to know if a backrupcty
will have any effect in me getting a student loan. (By the way most
of the 10,000 is fees and interests) I would like to know of anybody
who has gone through this and how hard life becomes after bankruptcy.
I have no assets but books
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In article <041670h9e3kcre48jgddalbhehrsv35sii@4ax.com>, JC
<jccenyc@aol.com> wrote:
Hi, I have over 10,000 in credit card debt, and i have no way to pay
it off.
How could that be? How about getting a job? If you cannot work,
how about applying for disability or SSI? $10,000 isn't really
that much money. Even with a part-time 2nd job, you should be
able to pay that off within a year. There are a lot of pizzas
out there, and every one of them needs to be delivered.
I am considering bankruptcy but I have heard horrible things
about it.
Bankruptcy is like a nuclear bomb as far as your life goes.
Yes, it can get rid of some of the debt. But it costs money to
do this (you have to pay an attorney), and you have this black
eye for 10 years or more. In the long term, you will pay far
more than $10,000 on increased auto insurance premiums, additional
rent, and high-risk interest rates on loans. It simply isn't
worth it for a piddly $10K. For $100K or $250K, that is a
different story. If you had a medical issue and got wiped out,
that is also a different story.
How fast can I start to re-build my credit.
Bankruptcy will dog you for the rest of your life. From then on,
every time you fill out a credit application, and in many cases,
every time you fill out a job application, they are going to ask
you if you EVER have filed for bankruptcy. It may very well
eliminate you from certain jobs in the future where you would have
to handle money, be bondable, or handle funds for a client.
The shorter term impact is much higher interest rates on anything
you buy, a 10 year credit record listing, and a dark cloud hanging
over your head.
I am looking
forward going to harvard, but I would like to know if a backrupcty
will have any effect in me getting a student loan.
Of course it will. Call the school financial aid office and talk
to one of the advisors. They will give you the full scoop.
-john-
--
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John A. Weeks III 952-432-2708 john@johnweeks.com
Newave Communications http://www.johnweeks.com
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Hi, I have over 10,000 in credit card debt, and i have no way to pay
it off. I am considering bankruptcy but I have heard horrible things
about it. How fast can I start to re-build my credit.
A personal bankruptcy sits on your record for 10 years. Don't worry,
you'll still get plenty of credit-card solicitations in the interim.
Anybody with a pulse can get credit in this country, and I've even
seen credit cards issued to dead people. Home loans on the other
hand, you'll just have to wait.
Best thing you can do is try and work out a deal with the credit card
companies. Maybe you should put off Harvard for a semester and work
off the debt?
I am looking
forward going to harvard, but I would like to know if a backrupcty
will have any effect in me getting a student loan. (By the way most
of the 10,000 is fees and interests) I would like to know of anybody
who has gone through this and how hard life becomes after bankruptcy.
I have no assets but books
Fees and interest can sometimes be reduced and/or forgiven if you work
with the credit card companies.
Yes, bankruptcy will have an effect of your getting a student loan.
At the very least, you will have to pay higher interest rates through
private companies and won't be able to get anything like a Stafford
loan. At the very worst, no lender will touch you. A personal
bankruptcy, by the way, could affect your ability to get a job in the
future because you will be viewed as not very dependable or
trustworthy.
Are you going to Harvard Law School? I hope not. I met a few people
from there and they were some of the most arrogant people I ever met.
God forbid they should ever have to associate with someone with a
non-Ivy League education, was the attitude I saw.
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Hi, I have over 10,000 in credit card debt, and i have no way to pay
it off. I am considering bankruptcy but I have heard horrible things
about it. How fast can I start to re-build my credit. I am looking
forward going to harvard, but I would like to know if a backrupcty
will have any effect in me getting a student loan. (By the way most
of the 10,000 is fees and interests) I would like to know of anybody
who has gone through this and how hard life becomes after bankruptcy.
I have no assets but books
I've was in this situation many years ago when I was a student at MIT.
But since we're so much smarter than you Harvard folks :-), I am
willing to give you some free advice.
Here's are some things to think about:
1) I think people are correct that going bankrupt will end up costing
you more than $10,000. I don't think that's the best approach
2) I don't think you should delay your Harvard education because for
every year you delay, you are trading what you could earn now
delivering Pizza for what you could earn in the first year after
graduation as a professional. Additionally, your raises are usually a
percentage of your salary, so delaying entering the workforce is even
more expensive because of the compounding of all of your percentage
raises over your lifetime. When you are a Harvard graduate and a
professional, $10,000 won't be a lot of money.
Here are a few suggestions, and I don't know you are your family's
situation. I was very poor, so couldn't borrow from family and had to
use the other options.
1) Borrow from parents. I would not let my kids delay their education
or screw up their credit because they made mistakes. If your parents
have the means, I doubt they would either. Suck it up and ask them if
they have the means.
2) Borrow from other relatives, offer to pay them interest. I don't
know you, but if you have relatives that aren't earning a lot of
interest, you can pay them a lot more than they could earn in a fixed
income investment, and pay less than you would through the credit
cards.
3) Borrow from Harvard. Go and tell them your situation and they may
help. MIT helped me. You should know that student loans are not
dischargable under bankruptcy.
4) Get more credit cards, particularly ones with low interest for
balance transfers, and use each card to make the minimum payments to
each other. This could end up being very expensive and time consuming,
but could be an effective way to borrow against your much higher
future earnings. When you get a job after you graduate, clean up the
mess.
5) Live within your means. Take your dates to the Nameless Coffee
House in Harvard Sq. Go see free concerts. Until you start
interviewing, buy your clothes at "Dollar-a-pound". Do what you need
to do to get where you need to go.
6) Study, study, study. Be an awesome student. Learn some practical
stuff too. There is no substitute for knowledge. Maybe if you get
smart enough you can transfer to MIT :-)
Vin
"Better Dead than Crimson"
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Hi, I have over 10,000 in credit card debt, and i have no way to pay
it off. I am considering bankruptcy but I have heard horrible things
about it. How fast can I start to re-build my credit. I am looking
forward going to [Harvard], but I would like to know if a [bankrupcty]
will have any effect in me getting a student loan. (By the way most
of the 10,000 is fees and interests) I would like to know of anybody
who has gone through this and how hard life becomes after bankruptcy.
I have no assets but books
A few points:
1. Bankruptcy will not dog you "forever". It will raise your cost of
credit substantially for ten years, or possibly longer, depending on
the type of filing and your own situation. On the other hand,
bankruptcy is less harmful to credit than some other kinds of
writeoffs because the lenders know you can't file again for 7 years.
2. If indeed you have been, or will be, admitted to Harvard, then
ability to pay will not be a factor in Harvard-supplied assistance.
Bankrutpcy may have an impact on outside, private loans.
3. It is almost never worthwhile for a young, healthy, non-disabled
person to file bankruptcy to discharge $10,000 in debts. Instead, you
should negotiate better terms on your existing loans and perhaps get
some of the interest rolled back. This can be done. You might even get
a "standstill" agreement.
4. Be skeptical of "debt advisers" and "consolidators". You will find
it cheaper in the long run perhaps to pay a bankruptcy lawyer an
hourly fee to try to negotiate terms, if you can't do it yourself. Or
a non-profit (really non-profit, charity) agency may be available in
your area.
5. Many people who are in debt and avoid bankruptcy for now,
eventually wind up filing anyway when things get worse (as they
probably will in your case, before they get better). If you borrow
from relatives, they must be aware that if you do file, their claims
will be discharged unless they are secured in some way. You also would
need to think ahead about possible inheritance: how any inheritance
could become part of your bankruptcy estate (if inherited within a
half year after filing) or lead to inequities among siblings (because
your debt to a parent is discharged and you inherit anyway, or because
the will does not take account of "advancements" on an inheritance.
These are not issues to be resolved on a newsgroup.
6. Your best investment might be caller ID. If you have no assets, no
creditor can actually do anything to you.
7. Student loans are virtually always non-dischargeable; it is
unlikely the extreme hardship exception (basically: disabled and never
likely to have assets or income) will ever apply to you.
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A personal bankruptcy sits on your record for 10 years. Don't worry,
you'll still get plenty of credit-card solicitations in the interim.
Anybody with a pulse can get credit in this country, and I've even
seen credit cards issued to dead people. Home loans on the other
hand, you'll just have to wait.
Why does it work that way, that the secured loan is impacted so
strongly, while the unsecured loan (with the $59 to $150 annual
fee) is less impacted.
This is related to the question of "Why do we send people to prison?"
but "Why do lenders punish bankrupts?" Given that the bankrupt
can't file another Chapter 7 for 7 (?) years, one might think
they're only doing it because it is the best available tool they
have to discourage other people from declaring bankruptcy.
In any case, I agree with the other responses, that $10,000 isn't
worth it, especially to someone who can reasonably expect his income
to rise sharply in a few years. Given the circumstance, the lenders
would probably be very willing to accept a payment plan. You
probably only need about $200 a month to keep that debt from going
into deliquency.
Being a student expecting a lucrative academic degree in the near
future, or even the vocational training another poster suggested,
is one time when living on credit cards makes sense. I knew one
student, Harvard College, then Law+Divinity, who made the choice to
live well (relatively well, as starving grad students go) on credit
cards, on the rational basis that he could enjoy the CDs and such
right now, and paying $50 each three years hence would be easier than
paying $15 each right now.
--
- David Chesler <chesler@post.harvard.edu>
Iacta alea est
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David S Chesler <chesler@post.harvard.edu> wrote:
Why does it work that way, that the secured loan is impacted so
strongly, while the unsecured loan (with the $59 to $150 annual
fee) is less impacted.
Possibly because there is less money at risk for the unsecured loan?
Also the fact that the $59-150 annual fee may be enough to cover the
risk for a comparatively small unsecured loan.
This is related to the question of "Why do we send people to prison?"
but "Why do lenders punish bankrupts?" Given that the bankrupt
can't file another Chapter 7 for 7 (?) years, one might think
they're only doing it because it is the best available tool they
have to discourage other people from declaring bankruptcy.
Or because a bankrupt has shown an inability to manage debt? The
lender(*) doesn't want to foreclose on property. They want a nice,
trouble-free loan that keeps payments (income) coming in on a regular
basis. A bankrupt may not be able to do that, even with the best of
intentions.
The above ignores, of course, the fairly large proportion of
bankruptcies that result from unpredictable events like job loss or
severe illness/injury. In a case like that, it's likely that the
bankrupt will be a good risk again as soon as hesh finds another job
or recovers from hiser illness/injury.
(*) Most lenders. There are a few that specialize in making loans
that are impossible to repay, so that they can foreclose on them and
get title for a fraction of the true value.
--
I pledge allegiance to the Constitution of the United States of America, and
to the republic which it established, one nation from many peoples, promising
liberty and justice for all.
Feel free to use the above variant pledge in your own postings.
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This is related to the question of "Why do we send people to prison?"
but "Why do lenders punish bankrupts?" Given that the bankrupt
can't file another Chapter 7 for 7 (?) years, one might think
they're only doing it because it is the best available tool they
have to discourage other people from declaring bankruptcy.
Or because a bankrupt has shown an inability to manage debt?
The above ignores, of course, the fairly large proportion of
bankruptcies that result from unpredictable events like job loss or
severe illness/injury. In a case like that, it's likely that the
bankrupt will be a good risk again as soon as hesh finds another job
or recovers from hiser illness/injury.
Indeed. Of people who have never become bankrupt, how many will
become bankrupt in the future? And of people who have become
bankrupt N years ago, how many will become bankrupt in the future?
Is it a good predictor? What's the repeat (recidivism?) rate?
For all the talk of reform, it may have become more difficult, but
I'm not sure if there's much distinction made between "lost job,
got sick, crop failed, all together" versus "lived the high life,
figured I'd worry about repayment when it came" versus "incurred
the debt with the not-quite-provable intention of defaulting through
bankruptcy"?
--
- David Chesler <chesler@post.harvard.edu>
Iacta alea est
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