Bankruptcy- Has Anyone Filed and How Bad Was the Aftermath

Updated on March 14, 2012
J.M. asks from Doylestown, PA
12 answers

While going through a divorce (3 years after being seperated) and all debt in my name I am sad to say this may be my only option. My ex was out of work for a while and apparently took out a huge loan and racked up cc debt so around 30k in debt in my name. I would love to pay it all off but I dont see a way. I don't use credit cards and J. use cash and only have a few hundred for gas and food a month left now, so I'm thinking it may be my only option. The thing that worries M. is that I rent and finding another rental would probably be impossible and also I lease my car. If they take that back how will I be able to drive to work?
What was the aftermath if you've done this?

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answers from Dallas on

Almost 10 years ago, we had a medical emergency that amounted to owing over 250,000 of out of pocket AFTER insurance bills. There is no way on God's green earth we could begin to pay all that, so we filed bankruptcy and wiped out all our debt, including credit cards. That was 8 years ago that we filed. (Waited until the health issue had settled down to make sure all the large bills would go in). Anyway - yes for several years we lived on a cash only basis. You are allowed to keep whatever you want, you J. have to keep up on those payments and not list them. Now ours will go off our record really soon now, but since then, we've gotten 2 car loans and an FHA mortgage. We don't have credit cards, mostly because with the bankruptcy, the interest rates are criminal. We only get what we can pay for, other than car loans and mortgage. It isn't insurmountable. It is embarrassing, but we've lived through MUCH worse!

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answers from San Francisco on

I have never filed bankruptcy so I have no information on that, but that loan and the credit cards that your hubby took out in your name had to have been obtained by fraud. Call your local district attorney's office and file a complaint against hubby. (He might have had a femal co-conspirator, and if docs had to be notarized, a shady notary public. The DA will check on all of that). ONce you have filed a complaint with law enforcement. obtain a copy and send that with a letter to the credit reporting agencies telling them that these debts were incurred fraudulently. They are obligated to give anyone who runs a credit report on you a copy of your letter. Also send it to the companies you owe the debts to and see if they can make some sort of a compromise on the amounts owed.

Good luck! I know this daunting!

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answers from New York on

If you can prove you were legally separated at the time he did the loan in your name it may help to get you off the hook if properly pursued. Him using money loaned to you without your permission is fraud (ie. illegal).

Definitely talk with an attorney all of the details around this debt. You may not need to file bankruptcy at all since this is probably a case of fraud if you didn't give him permission to use money loaned to you.

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answers from Dallas on

Hi there....I am sorry to hear about your situation. Hang in here and have faith.
I knew a family that was in a similar predicament and they opted to work with one of those credit card debt consolidation companies.....really worked...this company combined all their cards into one payment that they could afford and also re-negotiated interest rates, late fees etc...took them 4 years to pay it all off but not a smudge on their credit.........another option for you to consider.......

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answers from Chicago on

Well, first you should consult an attorney.

But - you probably won't lose the car you lease. They may alter the terms of your agreement and increase your "interest rate". It will be harder to buy a car, and your interest rate will be several % higher than if you had a good credit score.

It will take you about a year, and then you will be able to get another credit card for emergencies - but you will pay more in interest. So, for the first year it's hard to rent a car, book a hotel or whatever. although with debit cards being what they are, lots of places take them now. except that it holds money out of your checking account.

There will be places that won't rent to you and if you do move you will have to put down security deposits that might otherwise be waved.

I would say the first 4 years are the worst. Then it kind of evens out.

You're sorta dinged either way. If your debt to income ratio / available credit / late payments or whatever affect your credit score that can be J. as bad as a bankruptcy.

You can take your ex to court stating that he took out loans in your name and ask that he split them or whatever. That might be an option - it depends on your situation.

Good Luck

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answers from St. Cloud on

My husband and I came close to filing for bankruptcy a while back. We ended up using a debt settlement company. Essentially, they automatically took like $300 a month and put it in a savings. In the meantime, they'd bargain down the cc debt as much as possible and use the money in savings to pay it off. It took 3-4 years to pay off what started out as $20,000. I have a judgement on my credit history that'll take years to go away. That judgement has been enough to deny us car loans/personal loans. We haven't used any cc for over 5 years. You'd think paying your bills on time for 5 years would show for something but not as much as you'd hope. Also, even if the bankruptcy falls off your credit report after 7 years a lot of places still ask: Have you EVER filed for bankruptcy? You definitely need a consultation from a professional in both divorce and bankruptcy!!

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answers from Fort Wayne on

you dont have to claim your car under the bankruptcy, its only what you want to claim, like all the cc. When is your lease done? J. stay at your current rental and you should be fine. I think it takes like 7 yrs for it to get off your credit, but if you show good faith by paying your rent utilities and car on time here on out you should be fine. you J. wont be able to open any cc accounts or bank accts for awhile.

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answers from Williamsport on

Go to an attorney for a consultation with all of your information (they'll tell you what you need when you schedule). He will tell you exactly what you can do and what will happen. Everyone's case is a little different, so that's the best way to find out before doing it. He'll also tell you if you'll need a chapter 7, 11, or what, and the ramifications of each.

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answers from Champaign on

Ok, I'll admit it, I love to watch Judge Judy. Not sure why, it's J. one of my guilty pleasures.

I'm pretty sure she would say that all of the debt, be it in your name or in his, is considered "marital debt" and should be listed that way as you proceed with the divorce. She made it sound like you list all the debts, you list all the assets and you work it all out together (or in mediation or in court if you really can't do it any other way) so that it's as close to 50/50 as possible or close enough that you are both satisfied.

Good luck!

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answers from Oklahoma City on

The only person who can truthfully answer your questions is an attorney who specializes in bankruptcy. We were going to file a few years ago when hubby had his heart attack and was off work for over 2 years while trying to get the SSDI going.

The attorney is expensive and there are fees and all kinds of things that legally have to happen. Our attorney let us pay him $50 each month until we were ready to file the paper work but in that time frame the laws had changed so we decided to J. let the businesses we owed money to to sue us.

They cannot take more than X% or your income each month. For us, hubby didn't have the money to file taxes, they would have owed us he J. didn't file. They charged us fees and all kinds of charges for not filing. They take $50 per month out, they will be taking that out probably for the rest of hubby's life.

The other businesses we owe money may each and every one get a judgement against us but as long as we already are paying a garnishment out they cannot take anything. Not until the IRS is finished. Then the next in line starts taking $50 per month out.

The attorney will be able to tell you what will happen to you and your possessions. I can't imagine why a car would be taken back if the payments are on time. If they take it back then J. go buy one. As it happens they often will sell you tons of stuff after a bankruptcy, you can't file again for years so they are pretty much guaranteed they will get the money one way or another.

Good luck, I know how hard it is to make a decision like this.

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answers from Washington DC on

My mom had to file many years ago for a variety of reasons. At the time, her lawyer told her to go buy the newest car she could afford BEFORE the paperwork was filed. At the time, her credit was stellar, so the loan was easy. Then, she J. had to mail the check to the loan agency (Toyota credit, maybe) 'cause they wouldn't send her a payment book. Was weird, but she had reliable transportation while waiting for the "aftermath" to clear. Good luck and be sure to explore all the options with a reputable bankruptcy lawyer. Best wishes.


answers from Pittsburgh on

I came very close, when I found my (first) husband cheating, and he/his gf opened up credit cards in my name and maxed them out to about $35K. After a year of fighting M. on the divorce, I couldn't keep racking up attorney fees and finally dropped everything but the divorce.

To file bankruptcy, I would have had to pay for any legal fees without using credit cards and had no way of coming up with the funds. I would have lost my car, and had no way to work. I would have lost my house and had nowhere to live.

I worked two full time jobs to pay down the debt little by little and worked on moving back home to PA. Once in PA, I started listening to Dave Ramsey and followed his techniques. I closed all accounts, paid them what I could, wrote them letters, etc. This followed M. into my next relationship and we did it together, paying off all debts (including cars/house) and paid for our own wedding. It took MASSIVE amounts of work and I don't know how it could have been done with children.

It doesn't cost anything to get legal advice from a bankruptcy attorney - so, I would start there and see where it leads you. Good luck!

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