Unexpected Life Events & Financial Ruin
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)
“Appliances that all had the audacity to break criminally around the same time.”
“I have a job and savings. The point of the discussion is if it is worth to keep bleeding out or just f it and ruin my credit for 7 years tank the house and go bankrupt.”
“Unfortunately, yes I know, I will have to bankrupt. That was the point of the discussion. Is it worth to keep bleeding out or just f it and ruin my credit for 7 years.”
“Life hit hard during the pandemic, job loss, medical bills, etc. I went from around 805 to 590 over the following year(s). I kept missing mortgage, car and even credit card payments. I didn't understand credit and my single credit card was closed by the bank after maxing it out and missed payments. I eventually found work, got a housemate, stoped eating out, cancelled all subscriptions, got a second income to apply to debt, did the debt snowball etc. I am caught up with everything but 1 cred”
“Got rid of all the debt on my cards, 2k to my name. No debt. Crazy to think that a year ago I was sobbing thinking I have no way out. I should never have thought of giving up. Going to doordash myself something celebratory (That's how the circle restarts). submitted by /u/myleftandrightsock [link] [comments]”
“Person loan from Discover went straight to Rausch Sturm hands not even with Discover internal collections. Served on 06/30/25. I filed the answer form on 07/18 Got a settlement offer. Unfortunately after a couple of payments got defaulted again. No trial date had been set. No hearing had been requested. No judgment had been entered. Plaintiff's Initial Disclosures filed twice. Original balance: Approximately $13,460 Settlement reached: for $8,076, payable in installments. I made 3 p”
“I have a friend who is divorced from her ex-husband. Said ex-husband has helped himself to her one and only credit card and maxed it out. He's been paying the monthly charges (she thinks!!!). She cannot report him for theft because he pays her monthly support (sometimes). She is paralyzed in fear. I've told her to close the card but she's concerned if she does that he will stop paying it. This is what I want to suggest but would love some feedback: Run a credit report to see a) her c”
“I'm pretty sure it's either already repoed (again) or he's already hiding it and not using it. Funny thing is, his Grandma is married to my neighbor (and lives there). We're friendly, but I haven't talked to them in a while. And his mom keeps coming to visit and I'm assume help with menial jobs around the house to make money. He's living with his mom somewhere in the middle of nowhere hours away and I'm assuming jobless. He had been coming by for a while after get”
“I’m actually going through the same thing with a client who has a medical and real estate company. He sometimes will inject cash into his business or use his business to transfer money to other accounts to pay off loans. It’s been a real struggle to figure out and glad to know other people had/have a similar problem.”
“Yes! Once the bad debt has been brought current and then paid as agreed, OP should have no trouble getting at least a secured credit card to start rebuilding the credit score. Until then, applying for credit (just to be declined) is only going to ding the score even further. This is going to take time to fix; just a couple months isn’t going to be long enough.”
“You definitely need a lawyer for this one. Not because your divorce will necessarily be acrimonious, just because dividing your assets and figuring out child support/alimony is going to be complicated.”
Hey all. I very recently filed a chapter 7 bankruptcy (discharged last month). I want to rebuild my credit in the smartest, quickest way possible. Looking for advice specifically from people who…
“An emergency fund is there in case your tires blow out, or you get paid late and rent is due, or literally anything that requires cash on hand immediately where credit cards aren't allowed in certain place. I know my landlord doesn't accept credit card as payment, gotta do a direct ACH transfer from a checking or savings account. Having $1,000 in an emergency fund is the Dave Ramsey way. I personally think that's too little. I like having $2,000 in my checking account just in case a”
“My husband had a car accident last year and we had to live off credit cards for several months and it took him a minute to get back to the swing of things at work so our credit took a beating. He's now making 3x the rent everywhere we apply but because we have a few charge offs and debt up to our eye balls, we can't get approved. Are we doomed to stay in Airbnbs or is there something I should be doing or saying to get a place? Every apartment complex and property management company we”
“You keep paying your bills. Don't use any savings to pay for this. Especially don’t touch your retirement. You show up in court, explain and act grateful to work out any options. Take your father to the courthouse with you.”
“You'll probably lose the car but not the house or retirement account. Make them an offer you can afford after selling your car, or tell them to sue you. They'll eventually garnish your wages. Get your dad to help you get out of this mess.”
“i have a question. i still owe on some credit cards but in the next month i will be doing at least 3-6 months in jail. what will happen with the credit i owe. these aren’t for banks just store credit cards. how is it going to effect my credit score and what will happen if i just stop paying completely. Can i build my credit back up when i get out? submitted by /u/Unknow_ru7 [link] [comments]”
“Bankruptcy doesn't just wipe debt lol. Chapter 13 he makes installments payments through bankruptcy and chapter 7 he sells his assets to pay for it.”
“I knew paying for secondaries was going to be expensive, but I got a reality check today when my credit card started to decline my payments when submitting an application. I checked my bank account and my payment for my secondaries were marked as suspicious activity and my card was put on hold bc I was making too many $100 payments in the span of a few days 😭 submitted by /u/muffin_button112 [link] [comments]”
“Hi, all! I'm having a lot of financial issues thanks to having to drop out of work due to a disability flare-up coming on. I've been hoping it's temporary and I can go back to work some time, but my doctor says that's not likely to happen. I was getting paid through my work's disability insurance, but they stopped payments because they said I didn't seem to be taking care of my health because I didn't have enough doctor's appointments scheduled, which is only beca”
“Of your credit is already fucked, you can revoke ACH on all of them besides your title loan - and then after a few months they will settle for less. But the ones you mention will report to credit, unfortunately I am about to file chapter 13 due to similar problems. It's a relief tbh, you have a trustee and you can't just blow money. I need a babysitter for it, so I cannot wait!”
“There’s a bankruptcy subreddit. I highly suggest checking it out. Lots of good info there, and a couple lawyers reply to pretty much every post. Bankruptcy isn’t a bad thing. I did it two years ago and was very happy with the results. It cost me about $2400 total to file and to pay the attorney”
Other than the bankruptcy, do they otherwise meet your requirements?
“yes you open these with personal guarantee. yes this debt is your responsibility and it will ding your credit if you do not pay.”
“So I made a bad choice. Recently my mother passed away unexpectedly and I did not have the funds to have her cremated. The GBI was pressing me telling me I needed to find the funds ASAP or they were going to give her to the state. So I made a dumb choice and got approved for an Imagine Credit Card. I didn’t even mean to. It didn’t even do an approval or anything when I pressed to see if I was applicable it just immediately gave it to me. Now I see all these posts about how it’s a horrible credit”
“That’s the plan. I just got to get through until next year. I also posted an update, because I left a lot of information out”
“I never thought I’d be making a post like this. I’m 42 years old, and two years ago my life looked completely different. I had a credit score around 750, a stable job bringing in about $10,000 a month, and I was paying $3,000 a month in rent. I know that sounds expensive, but in the Bay Area that’s actually pretty normal. Then I lost my job. I went from making $10,000 a month to living on about $1,900 a month in unemployment. I was still locked into my lease, so I burned through my savings tryin”
“I never thought I’d be making a post like this. I’m 42 years old, and two years ago my life looked completely different. I had a credit score around 750, a stable job bringing in about $10,000 a month, and I was paying $3,000 a month in rent. I know that sounds expensive, but in the Bay Area that’s actually pretty normal. Then I lost my job. I went from making $10,000 a month to living on about $1,900 a month in unemployment. I was still locked into my lease, so I burned through my savings tryin”
“Thank you. Since I claimed her as a dependent, and if she files for that year, would this create an issue as far as being audited? Could this be seen as fraud? If I would’ve realized sooner, I would’ve amended it”
“I think the poster above is trying to impress upon you that the letter is not only for getting them to fix their end of the problem, the letter is to get them to fix the mis-reporting to the credit bureau and actually erase the "missed" payment reports, you can also add a note to your credit report yourself with explanation, but getting the bank to do it erases it.”
“some go to collections, some get repo'd, some you get your service cut off. depends on the bill obviously.”
“As you do this Id focus on two things. Pay your current taxes first. Bankruptcy or any relief you seek will require being up to date on your current filings and payments. The second thing is take care of the state first. They’re usually harder to work with and if you do settlement payments to them are allowable expenses to determine your ability to pay the federal government. Also plan. If you might be filing for relief know what an allowable expense is. Cutting your rent or house payment before”
“I was on one of their cards, they just didn’t tell me and apparently didn’t know how much debt was on it. Thank you for letting me know this is a possibility”
“I would add to get a free copy of your credit report, to see what's going on in full scope.”
“I don’t know where to begin. Just feel lost. Our bank acct is negative. My husband doesn’t handle any of the finances. We’ve had this fight in the past, I literally don’t buy myself anything as a treat, I don’t spend money on myself. He’s complained about savings before and when I try to say you handle the finances he says no you do it. So when money is low suddenly he doesn’t understand. It feels like he thinks I just spend on BS but I really don’t. I always put him and our son first. And our d”
“My friend has accrued around $40K in debt, and has debt collectors reaching out to him. He is moving back to Germany, where he grew up, to avoid paying the debt. What is the likelihood of debt collectors going after him? I have no clue how this works between those two countries. submitted by /u/OpinionSensitive2242 [link] [comments]”
“That sounds incredibly overwhelming, especially after a serious health crisis. I’d definitely talk to a bankruptcy attorney, even just to understand your options. A nonprofit credit counselor could help too. This isn’t a moral failure. You’re trying to stabilize your life again, and getting professional help makes sense.”
“I was surprised to find out shortly after our marriage that my wife had a $6k maxed out credit card from when she was a kid. In this case, she was fully aware that her parents had given her a card and that she had maxed it out, so not as big of a deal. But it was unfortunate that they made it seem so normal that my wife (who honestly 20 years later still doesn't know much about personal finance) didn't even think to mention it to me until a couple months after our marriage. Not that I wo”
“I'm going through a high conflict divorce with my abusive ex. Then you have a lawyer. Can he actually report the funds as fraudulent and will the bank freeze it right away? Tell. The. Lawyer.”
“I’m 44(m) and my SO is 42. Without going into details, I battled a life-threatening disease for 1.5 years at 38 that essentially left us with nothing saved. We currently have 150k in tax-advantaged accounts and are saving roughly another 46k each year (but only 36k in investments; the rest is building an emergency fund). Additionally, I’ll probably receive a bonus that would raise our total tally to 40k investments. I worry about staying employed. I worry because I’m so far behind. Sometimes I w”
“My husband got defaulted in court to pay 16,000$ and something from a car he let them repo. We have 5 kids and rent a one bedroom house. I feel like we are flat out stuck at this point. Any other options out there? submitted by /u/Long_Loquat_565 [link] [comments]”
“You contact the credit bureaus and they will remove it. My mother took an electric bill out in My name. She never paid it. The utility company claimed that since I lived there it doesn't matter if I did it or not. It's mine. I had a police report claiming it was fraud. I had a voice recording of her saying that there was a mix-up somewhere and that the bill was supposed to be on her daughter's name (she doesn't have a daughter). Utility company still refused to budge. I call Equi”
“At least with a 5x multiplier in the near horizon it could make sense to keep current payments low now - so you are not committing financial suicide, you are just trying to balance a few competing layers in your 1-5 year plan. I'm glad you have options to consider and the financial outcomes are "good, better, best" and not "barely survive or die".”
“for most banks they mainly care about stuff like fraud, recent charge offs or unpaid debts in collections, not a single medical thing and some old lates if you’re fixing them and can explain they’ll probably just ask what happened job hunting sucks right now”
“The credit score itself isn’t a dealbreaker, it’s the stuff associated with it. Like if you ever had any cards go to collections, bankruptcy, stuff like that. I personally don’t think you have anything to be worried about.”
“Bankruptcy and some serious financial counseling. Maybe sell both of the vehicles and get a rust bucket.”
“Someone mentioned SCRA. If you haven’t applied for it, please do so asap you may receive money back from all the interests they have charged you throughout the years and this goes all the way back from the moment you went to BMT as long as you incur the debt during your active duty time. To apply, all you need is all your active duty orders from the moment you join and send them to each creditor. boa, chase, Sofi, Wells Fargo, should all have a SCRA department just google it. I really hope you h”
“Stop taking out loans you can't pay. Stop using your credit cards. Sell a car, or both. Then pay for one in cash. Is your wife working?”
“Brief background: in the middle of a divorce; husband likely going to jail so will lose his income. My husband and I are divorcing and I am trying to figure out my best moves financially after years of planning joint finances. My divorce attorney is recommending bankruptcy but I have major concerns about it. Here's the details: House: we are hoping to sell our house but will likely only cover the existing mortgage ($267K) and seller costs. We only bought 2 years ago and the market where we&#”
“I opened my solo private practice, mental health, 12 years ago. Worst mistake I ever made in my entire 65 years of life. I’m 30,000 in debt to the IRS. I wish to God I could go back to being a decently paid employee and tell my ambitious dreams and thoughts to go to hell. Being in debt is a nightmare of a cloud that lives in your brain 7 days a week, 52 weeks a year. It’s a perpetual swim up stream for most folks. Live and learn but you can’t turn the clock backwards.”
“You say you take responsibility. Does that mean you've paid them back every penny you owed them? If you haven't paid them back, you have not taken responsibility.”
“Regardless you still owe each bank money. Until you pay that, you’re on chexsystems. However, you are also most likely blacklisted so any bank you “did wrong” will almost certainly not onboard you again regardless of what you do. I know my bank (mid-size regional) once we kick you out you’re permanently banned”
“If you go back to any bank you still owe money to, even if it dropped off your credit report, they will take back what you owed after any account opening and money deposited. After your account is settled with the previous bank and money owed paid back, then maybe they will reconsider your relationship with them. .”
“Debt accrued by one are owed by both. This depends on what state you live in.”
“I don't own one anymore because I sold it. It was a mushroom farm so I know the struggle as well as anyone. But I did it debt free so I know it can be done.”
“No that was his only income. Not sure if they even required showing anything. I went to buy a car in 2020 with mid credit and they didn’t require me show any income. Just proof of residence in the form of a bill or bank statement. You’ll be fine! I think showing proof of income is for young kids with no history or people with really poor credit or for more expensive cars!”