I am writing here about bad credit, because I have been through the process and through the system, including bankruptcy, and I have bad credit now, but my credit was worse. I've done everything I can to bring up credit scores, and for me, this happened before the bulk of Americans today fell short on their mortgages or lost their jobs. So, I figure I'm about three years ahead of the curve and I hope people can learn something here.
Also, I'm a lawyer. I'm not a bankruptcy lawyer or credit lawyer, but I understand the law, and still I made mistakes I can't believe I mad. I can swim through rules and regulations and legalese, but still I messed up – so I can't help but assume there are many many people out there who are completely confused about what they should do, and don't know where to go for help. If a lawyer can't figure it all out perfectly, probably no one can.
It started when I declared bankruptcy; this was a mistake. I had a lot of debt,but student loans I couldn't discharge, and I wanted to keep my house. (which in the end was unsuccessful). I filed for bankruptcy before the laws changed so I could discharge everything – but I'm sorry I did. A year later I lost my job and my house; I could have tried to be on a payment plan, or something besides having the bankruptcy on my credit report.
My feeling about it is, even if I had been seriously delinquent, I did have some alternatives to bankruptcy. I could have made some kind of small payments until I got another job (which too my 9 months). But having that bankruptcy is a HUGE red flag – even though my credit score is creeping back up, slowly, lenders see that bankruptcy and today they just say no.
Right now, I could have gotten my past due debts paid up, and had a shot at borrowing for big things like a car or house. Today, I can't, not for a few more years. And paying cash is tough, but I did learn my lesson. I keep no credit cards now, am paying off my existing car loan and student loans, and swearing I will from now on deal in cash, even if it means driving a crappy car or not taking the vacations I dream of. At least I owe no one, and can even save a little today.
The point is, before I declared personal bankruptcy, I didn't really understand what it would mean afterward. My bankruptcy lawyer did not explain enough about the ramifications of having this on my credit report; he did say that about half my debt I'd still have afterward, but I didn't listen. So, if you are thinking about bankruptcy, think twice. Figure out if there is any real reason to file, because you can just be late on payments and catch up when you can, you don't have to ruin your credit for ten years, and it will be easier to get back on track if you avoid bankruptcy altogether.
