Bankruptcy and Credit Recovery Has No Clear Roadmap
106 posts across 21 communities in the last 30 days; 37% from r/povertyfinance.
“Understood. Well, I suppose I'll book an appointment with my bank and give bankruptcy another look. But I know on my student grant profile they ask about bankruptcy every semester. So if that got in the way of my student grants, then I can't pay for tuition. There's a lot of…”
“My partner works in a bank with a bk and this has never been an issue. I guess it really depends on the institution. [re: General distress post bankruptcy]”
“A bankruptcy is a declaration by the entity that the liabilities(debt) it owes cannot be repaid in the given terms of the debt agreement. By declaring bankruptcy it can allow creditor to extract or recover as most of the money they can. In most cases, the business will never be…”
Individuals are experiencing devastating financial setbacks due to unforeseen circumstances like business failures, health crises, divorce, and accidents. These events trigger a downward spiral, often leading to bankruptcy and feelings of shame and inadequacy despite prior financial responsibility. The shared pain is the loss of financial stability and the stigma associated with bankruptcy.
SOURCES (60)
“No i have collections for a personal loan [re: Whats the best credit rebuild card? I don't have enough for a secure card.]”
“You can sometimes discharge federal tax debt in bankruptcy, but not if you haven’t filed the tax returns. Usually it’s better to try to work something out with IRS first unless you have a lot of other debt (credit card & medical debt for example). [re: 4 years without filing, owe IRS about 280k, what are my options?]”
“I’m a little terrified of criminal prosecution. I’m planning on filing bankruptcy this week, hopefully, and am hoping the state will allow me to make payments, which is what I’ve been reading [re: Behind on city income and state taxes]”
“I don't believe that has any effect on owed income taxes, does it? Either way it's the only debt I have now so it doesn't seem worth it. And bankruptcy without owning a house is a death sentence since no one will rent to you with one in the last 10 years. [re: 4 years without filing, owe IRS about 280k, what are my options?]”
“Bankruptcy is also an option if you're getting notices right now. [re: 4 years without filing, owe IRS about 280k, what are my options?]”
“If you file for bankruptcy, will it work on private student loans? What if you have a cosigner on them? [re: Bankruptcy. I'm debating.]”
“All accounts are in collections, end of December is 3 years since last payment. For my state, that's close to the average getting sued mark. With them in collections, they haven't had interest. It's not a promotion thing. Also, I've been on average able to save roughly 200 a week up this past month. With the accounts Ive been paying, I can really do that on their due weeks. Rent has been paid in full on time every month this past year. My big thing, I've been able to substain”
“you threw cash into a ghost loan and now you're stuck holding the bag. just stop paying and ride out the foreclosure, you're burning money that ain't coming back [re: Mortgage loan too young]”
“bankruptcy might give you breathing room to start again and your kid needs you more than your credit score [re: My life feels like the floor is crumbling beneath me with each step!]”
“Right. Typically the statute of limitations is 7 years. [re: Pay my bills or my debt]”
“That debt isn't even collectible, assuming it's not something like federal student loans, as it's many years past the statute of limitations. [re: Pay my bills or my debt]”
“Any non governmental debt from 2009 is way past the statute of limitations for collection. [re: Pay my bills or my debt]”
“Does anyone know if it’s significantly more challenging to get an accounting job (compared to other jobs) after declaring personal bankruptcy? I’m looking at my options for handling debt and may end up having to declare bankruptcy. I’ve been dealing with medical issues that have kept me out of work for the past 3 years and I’ve racked up about $25k in credit card debt. I’m hoping that my health will soon be good enough to allow me to pursue a full time accounting job again, but I don’t know the”
“Once it goes to collections they CAN take your bank account funds and/or get a garnishment from your employer if you have an employer. My husband has one he’s been avoiding since 2009 and all they do is a call all the time, he doesn’t have a bank account or an employer, he’s self employed. It’s from before we were married so I have the bank account. [re: Pay my bills or my debt]”
“But do you have the OP's bad credit history? That actually counts for more than anything. [re: I am up against the wall and have no clue what to do!]”
“Insurance companies also use credit ratings to determine rates. Someone with the OP's credit history would be considered irresponsible and thus high risk. It may not be fair but that's how it works. [re: I am up against the wall and have no clue what to do!]”
“I had a bankruptcy discharge in late 2019. I got an auto loan for 7% in January 2020 (my paid off car worth $900 bit the dust and needed a new motor and transmission - was straight up told to get a new car). I had new CCs within a year. They were small limits for sure, but it was possible. I also work in local government, was able to get a new apartment in March 2020 (right before COVID hit, like…two weeks lol), and again in Jan 2023. Bankruptcy well and truly saved my life. I was being sued for”
“Has anyone bgv failed due to bank case against loan default, I am considering a job opportunity and has few cases against me filed due to default submitted by /u/MeanExpression3011 [link] [comments]”
“Hi everyone I owe Virginia a little over $2,000 for the 2025 tax year. I had set up my payment plan and made my first payment back in July 2026. Unfortunately I had to file chapter 7 in August 2026, which stopped all payments. I had my 341 in sept, no creditors showed. Now I’m patiently waiting for my discharge letter which should be coming sometime mid November. So anyways I was trying to make a payment today for the taxes but obviously I’m locked out of my account for the bankruptcy so I calle”
“My ex wife(33) and I (34) divorced about 2.5/3 years ago and she left me with all of our debt. I unfortunately had to enter a consumer proposal which severely damaged my credit resulted in my score dropping from 780 to 420. My consumer proposal is almost complete and I’m looking for ways to rebuild a healthy credit profile. Does anyone have tried and true methods that rebuild credit? submitted by /u/Old-Resolution-1514 [link] [comments]”
“I will second this. Don't make the mistake of calling bankruptcy on that amount. First thing you do is get rid of that car and find a beater. Then, stack that debt from lowest amount owed to highest amount owed and start paying off each one, lowest first. Then working to the highest. You need little wins to keep your momentum and every time you close an account, all of the money that was going into that one rolls forward to the next one. It's called a debt snowball, and you can very quic”
“Posting this for my boyfriend. He’s been quite lost lately and I could use some advice to pass onto him. For context his whole dream was shattered when he was denied from the military due to an astigmatism. After the dream shattering denial at 18 he went off the rails and got a DUI and a felony fleeing conviction. His mom is a meth addict and he wants nothing more than to be successful to provide for his grandparents that raised him. He’s on probation now and has not had a single interaction wit”
“So here’s my credit situation. I’m at a 539 fico. I have 6 collections closed over time. 4 open collections totaling a little over $16k I can’t pay those back because I’m stuck paying a high interest car, plus, my rent was raised. I’m basically paycheck to paycheck right now. Looking for some financial advice also I’m open to listening. Thank you! submitted by /u/McManman01 [link] [comments]”
“Sounds like you might want to look into bankruptcy and food banks. Usually bankruptcy lawyers will add their fees into it and iirc they're one of the first debtors to get paid. r/bankruptcy is a great place for info if you'd like to start looking into it. [re: We are not surviving we are struggling]”
“Don't use the credit cards anymore cut them up if you have to. [re: Financial debt help!]”
“I left in 2021 to travel the world. Thinking about returning back home and jumping back into credit control work. I remember it being grueling - endlessly chasing debt and reissuing documents. Is that what it's still like in 2026, or has the landscape changed now with the advent of AI? submitted by /u/TennisSkirt1628 [link] [comments]”
“So what is worse? Bankruptcy or just collections and a low credit score. You still wouldn't be able to bounce back right away after everything is paid off cause your credit will take a while to heal? [re: Struggling to pay credit cards bills even with financial hardship program]”
“Understood. Well, I suppose I'll book an appointment with my bank and give bankruptcy another look. But I know on my student grant profile they ask about bankruptcy every semester. So if that got in the way of my student grants, then I can't pay for tuition. There's a lot of things that could impact, and in ways I'm not capable of predicting yet. So it's definitely not a silver bullet, but I will look into it further. [re: 31 year old student, need advice on my financial situ”
“xposting from legaladvice, just thought I'd see if anyone has any insight here thank you! submitted by /u/OhhNooThatSucks [link] [comments]”
“Had a bankruptcy 3 years ago , Ch13 and need to have a way to expand the business. Funding is limiting growth. Most of it is startup costs and regularly overturn of inventory. It's been running for about a year now and we just need more money to grow it. Most of the money earned is going back into the business, several thousand a month usually. How can I get a pre approval for a lone, credit card or line of credit? I looked up some but don't meet the income requirements for standard bank”
Bankruptcy seems like a viable option [re: Bankruptcy. I'm debating.]
“Bankruptcy may be the only path here--Otherwise, you can just stop paying your credit cards totally--Either choice is going to tank your FICO score, but you can easily raise it again later by being more responsible with credit cards [re: Struggling to pay credit cards bills even with financial hardship program]”
“Start by pulling your credit reports from http://annualcreditreport.com and find out what debts you have. Your reports will list the contact information of the creditor who owns your debt. Depending on your state, the debt could be past the statute of limitations. [re: I ruined my Credit at 18 now I’m trying to fix it at 22]”
“I have credit cards and a large line of credit that I can’t afford to pay. I have nothing to sell since it was all sold years ago. If I stop paying everything but the car loan, will I get sued for the balance and how fast will it happen? I lost my job and I’m ineligible for unemployment. Should I just not care at this point and worry about my survival and mental health? submitted by /u/UnlikelyPotential516 [link] [comments]”
“I have a 501, it's simply because of medical debt I'm waiting to fall to a debt collector that'll work with me. Some people don't have a choice but to have a shitty credit score, I couldn't afford $500/mo, we already were uninsured when the cancer hit. Judging people off credit scores for living somewhere it's dystopian as fuck in the modern day, I mean I certainly didn't ask for my wife to get cancer. [re: Tenant applicant has debt but her salary is more than enough”
“Do they care about paying their debts, is different than are you going to get paid…. The nature of, and reason for, the debt is likely more important. E.g. I had a former tenant who was in foreclosure which is obviously a bad sign but his income was good and it didn’t make sense so I asked. The house in question was a new construction home built during a drought. When it rained his house had 18” of water in it (I saw the pictures). The builder declared bankruptcy and his only option was to do th”
“still the OP of the underlying post seems to be mistaking unprofitability with bankruptcy since he claimed at the end they mined millions. Unprofitability precedes bankruptcy, and he only mentioned revenue, not cost. They could've mined "million" but still lost money for every Bitcoin they mined. The owner himself might be rich because he paid himself out. And maybe that's why the business was unprofitable. Either way, that would still make the business an unprofitable failure.”
“And what is a loan? A hit on credit. I must be arguing with a bot with no logic. [re: Drowning in debt]”
“Also if youre married they need to sign off on it (ERISA waiver) [re: Got a new job but I need help securing funds (despite bad credit score) for moving. What can I do???]”
“Does anyone know of a roofer in the Philadelphia area that will replace a roof through financing to someone who has bad credit. My mother is 78 years old and recently just got out of Bankruptcy and her house needs a roof replaced really bad. Thanks Mook submitted by /u/mookdawg7374 [link] [comments]”
“What kind of debt? To me this matters a lot. [re: Tenant applicant has debt but her salary is more than enough to cover the rent and such. Should my family and I consider her or move on?]”
“Debt is whatever, LATE debt is a giant red flag. That's a clear no for me. [re: Tenant applicant has debt but her salary is more than enough to cover the rent and such. Should my family and I consider her or move on?]”
“My partner works in a bank with a bk and this has never been an issue. I guess it really depends on the institution. [re: General distress post bankruptcy]”
“If you are a person that chose bankruptcy over a consumer proposal, please understand everything is okay. The first year sucks ass, but everything will get better. I chose bankruptcy in 2024 and things are starting to look up. You got this. submitted by /u/Puzzled-Phase-2834 [link] [comments]”
“I suspect my mother took out federal student loans in my name and used the refund money. How can I prove it and get my loans out of default? I'm 33 and trying to resolve a situation involving federal student loans from when I was around 22. I attended a private art university online for only one quarter and took two classes. I recently reviewed my federal student aid records and discovered multiple loans associated with that school, totaling approximately $28,500 in original principal, with”
“Payday loans have overtaken my life. I am on a fixed income (SSDI). I was sharing expenses and care with my dad who died last November. I didn’t pivot fast enough into “emergency” mode when he died, and just kept spending what I was used to spending. To sustain my lifestyle I took out numerous payday loans, and thus started the endless cycle of being broke month after month. To correct myself I have reduced my spending on car/renters insurance, and streaming. My cats have also taken hit as I mig”
“Just wanted to share my experience with debt consolidation. Debt consolidation really gave me that stopgap to catch up on other bills and necessities. Not paying and waiting is kind of scary, but it is part of the game. It makes the people who gave you the loan the "okay fine we will settle on what we can get, and not profit off the interest" feeling, and this helps with the negotiation. Credit score does go down during that time, but once I pay this 6k off I should see it go up again.”
“They’ve already sold the debt to a collector who’s just trying to scare you into paying today. [re: A lawsuit over a $300 payday loan?]”
“Howdy! I am a casual day dreamer. My thought process started with thinking about those individuals that randomly pay peoples debts for them, and I was curious if like a car, they were obligated to pay taxes on the value of the debt forgiven. Specifically for this hypothetical, I’m asking about TAX debt to the IRS. Person 1: accumulated $50,000 debt to the IRS for taxes Person 2: accumulated $50,000 debt to the IRS for taxes Person 3: pays $50,000 to the IRS to settle the debt of Person 1 in full”
“I just want to know if o can include this in a bankruptcy if the judgement has been made in court. And it’s been about 7 months since the judgement. Can they go after my bank account or tax returns? Any advice or comments are appreciated. submitted by /u/alfymo88 [link] [comments]”
“Worst case the house is foreclosed. You're young in 7 years this will history on credit record and you'll still have not hit 30. The lesson here is don't sign your name to any thing you can afford by yourself. Hard lesson. I hope the the advice others have given works out. All the best. [re: how to not lose my house?]”
“I’ve never filed bankruptcy but my credit is awful. Like in the 500s, and I’ve had charge offs with other banks that I don’t work at. Got hired no issues. [re: Preliminary Adverse Reaction]”
“You can manage things on your own, clearly very capably, it's just someone tied a ball and chain to you in the form of 18k of debt. And anyway, using the food bank doesn't mean you failed. [re: 20F, left extremely abusive relationship a month ago]”
“Thanks for your input. I will check some of the resources you've provided. [re: File Bankruptcy?]”