Bankruptcy and Credit Recovery Has No Clear Roadmap
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)
“My close friend is financially illiterate. Not her fault; no one taught her how to be responsible with money. She was recently evicted from an apartment after losing her job. Due to the eviction, her credit score is suffering between 450 and 500. She now…”
“Bankruptcy is not 7 years of bad/no credit. Where did you learn that from? Most bankruptcy filers get a mailbox full of new credit offer immediately afterwards; they won't be at good rates & terms but credit is usually much MORE available post bankruptcy because lenders understand that somebody who just filed bankruptcy is a much better risk than the average low credit debtor(mostly because they cannot discharge debt again for 8 years if they just filed Ch 7). It may stay on your record”
“Hey there. My chp 7 was just discharged. I had ALL of thr credits cards as well including ollo. To my surprise ollo has already offered me a new card. No yearly payment, of course the interests is 34% but I have a credit limit of 1500 and it reports to all 3 bureaus. Im on the search for two more as the 720 rebuild your credit class recommends doing so, even if its secured.”
“It sounds like you’ll benefit from closing credit accounts for a year or two, friend. I mean this as friendly (life experienced) advice and not judgement. Those companies have over a hundred years of experience getting people to spend money like crazy… it’s tough to build financial grit and stability when those jerks keep letting us get credit we shouldn’t have yet!”
“Wife lost her job 5 days after my major knee surgery. Same thing they wiped out over 6k after providing income docs etc. I was shocked. I was hoping just even a 10% discount would have been amazing. They went 1 step further for us too, and gave us free healthcare at any of their facilities for both of us for the next 12 months. I got a free nose surgery for deviated septum out of it too. Always call. Never pay right away.”
“There are all kinds of things that you can do, but the first on your checklist should be getting a lawyer who can help you with exactly what you need and how to get it.”
“Same thing happened to me years ago. Except I didn't get anything taken off the bill because I lived with my parents. They asked for their income. Sold my car.”
“So he has absolutely zero assets? No house or real estate? No will? If no will, then let the creditors deal with the courts on their own. No need at all for you to get involved. From my experience, the creditors will fade away. I didn't pay a penny of any of my father's bills.”
“Well unfortunately is does happen, even (especially?) In the west. Shit, 'collectors' you don't even owe will chase you for 'debt' while you're alive on the assumption you might make a mistake and not realize who bought your debt”
“I’m 18 but it still limits my options because I had zero credit before this”
“Her credit is likely not too great if she’s behind on mortgage. Not everyone gets approved for new credit that easily.”
“I’d be combing through my credit report to see if she committed any other instances of identity theft. I’d lock my credit on all agencies. Then I’d file a police report for identity theft.”
“Did you tell them you a victim of identity theft and did not take about the loans? That needs to be your next step.”
“My mom has bad credit, I don’t know the details but I’m assuming she just made bad choices in the past. I wanna help her rebuild her credit. Right now I know she has one open card but it’s one of those store cards. I really wish she would’ve talked to me about it before she got that card. I’m assuming her score is in the mid 600’s but that’s just based on her banks vantage score. I wanted to check her fico but she’s paranoid about putting her social on Experian. She makes good money around 60k a”
“You just reminded me why I only do commercial bankruptcy work unless there is major fraud or a lot of assets involved.”
“Claims don’t get filed in no-asset chapter 7s. I’m a lawyer who did consumer bankruptcy work for over seven years. Like I said, vehicle ride throughs are a gray area, but if the debtor gets a discharge without getting a reaff approved by the court, I would not want to be the creditor going after any deficiency.”
“Some attorneys now offer bifurcated fee agreements to get around having to pay money upfront. Some even offer installment plans too. It may be worth looking into.”
“I filed it two years ago. It cost $2,400 total. You really should get an attorney for this”
“You can file without an attorney but I would at least try to get a free bankruptcy consultation first. With your income and that $530 minimum payment, it sounds worth talking to someone who can look at your situation and tell you what your options are. You may also qualify for Legal Aid or other free help. Have you checked for any bankruptcy clinics or Legal Aid offices near you?”
Have you looked into a hardship program with your credit cards?
“You need an attorney. Maybe you can borrow the money from someone? That's what I had to do. You are also going to have to start bringing in more income you cannot live on $500 a week and bankruptcy isn't going to fix that you'll just immediately be right back in the same position.”
“Question- is there a way to file bankruptcy without an attorney and if so, how do I notify my debtors? I’m very confused as to how to start this process, as there is a ton of conflicting information online. I don’t have the $2000 to pay an attorney. If I did, i probably wouldn’t be considering filing for bankruptcy. I make so little money a month, that I can barely afford food and gas. I’ve applied for Tenncare (state insurance), but they’re giving me the run around. I picked up a food stamps ap”
“I come from a very poor background and have never had any financial help from anyone other than myself. I’ve worked like a dog to have any kind of scraps. It took me five years to save 3k due to the nature of life and living in poverty. I had an 06 Corolla I drove until she refused to get back up. I had to get to work and knew my car was going bad so for a year I looked for different car options. My same car was going for over 6k in my local market so it just did not make sense to drop cash on a”
“I was at 487 in January today I’m sitting at 710 .. delete negative items on your report depending how much negative you have it take about 6 months .. simultaneously try and open up some credit building programs like kick off self and credit strong .. once your score goes up a bit try and get a couple of secured cards and make on time payments .. keep disputing .. call collections and offer pay to delete .. pay off your cards before statement ending date .. and you should see some major improve”
“30F, I'll keep this as short as I can. Supported unemployed mom and took care of my grandma for most of my 20s. Did my best to manage, but debt caught up with me due to losing a high paying job in 2024. Mom finally got a part time job at 62. I never recovered. Got CDL A with all endorsements in June 2026. Got hired at a mega. Got placed on a home daily account. The account does some questionable things. On 8/25, my manager gave me an ultimatum when I called and said I felt too tired to conti”
“I just filed bankruptcy and I looked at my bank statements and hate what i see. I started making a budget and i want to open multiple accounts to organize my money better. tips on improving money habits and organizing money for better money management? submitted by /u/maninurturer1992 [link] [comments]”
Hi! I sent you a message since I’m on the boats and have 3 accounts in collections. How did you go about getting a repayment plan? And get proof of it to…
“That sounds awful. My spec is to pretty much exclusively go through a third party where we have controls over who handles our collections. Surprisingly, I've actually found a couple. The briefing was also incredibly clear... no outsourcing to India . I'm so far encouraged by the Philippines, though it seems the main concern with PH is management. Do you know how much your company pays? Would like to get some benchmarks.”
“It’s in collections but still through the original creditor? They haven’t sent me a letter verifying the repo, the repo happened beginning of July. They call 3x a day asking if I want to get it out of repo but we just can’t afford to. And so I keep telling them to proceed with auction because they want 2300 to get it out of repo, and because it broke down, it would cost an additional 3k to have it towed and it still doesn’t run. We currently owe 24k on it. On the preexisting loans even though he”
“Can read the article - but having debt via an LLC is very different than having personal debt. And most large companies run with debt - and that is usually fine when the assets are worth more than the debt.”
“My son had been living with his partner for approximately 10 years and recently needed to leave the relationship. They lived in the city and shared one vehicle, so we offered to let him move in with us temporarily while he worked things out. We also offered him the use of one of our older vehicles, a 2008 Toyota RAV4. Unfortunately, while driving the RAV4 through a roundabout, my son was struck by an 81-year-old driver. She was insured and was cited by the police for causing the accident. Her in”
“I was in a situation about a year ago where I was unemployed and ended up evicted. I am now applying for a new apartment with my girlfriend. We make a combined income of over 4X the rental amount which exceeds requirements but one of us (me) credit is in the dumps. submitted by /u/Iswhatitis80 [link] [comments]”
“Been feeling pretty stuck financially lately. I owe some back taxes from a few years ago and then got hit with a medical issue that drained my emergency fund. Im back on my feet and working but between everyday expenses and medical payments I feel like im constantly playing catch up. Looking at my income alone you'd think I was doing okay but thats definitely not the reality. Anyone here dealt with IRS debt while also paying off medical bills? Did the IRS take your actual situation into acco”
“Short answer is, you pay it. You can reach out to the bank and see if they hold the debt still, or if they sold it to a collections company yet. If they contact you, do not ignore them…answer their calls or call them back. If you owe the remaining $4k, if you don’t ignore them there are usually options to get out on a payment plan or have the amount reduced possible if you pay a larger amount at one-time. The way that this gets worse is if you ignore it thinking it will go away. Work with the co”
“I’m trying to rebuild my life. 7 years in collections will destroy my early 30’s. I’m trying to solve this within the year.”
“I filed in 2020 as well and I had unsecured card with no fee's within a week. I also had a mortgage 2 years post bankruptcy. APR on a credit card is irrelevant if you use them correctly. Always pay the statement balance in full to avoid interest charges. Avoid getting a credit card with any sort of account fee's. You have been cash only for a long time so you should be used to living within your means so just keep doing that when you have a credit card.”
“Thank you! Yeah that’s just fine, and honestly understandable they would put me on a secured card…though I am not 💯 sure what that is (I will look it up 🫡) and would guess the 500 you mentioned I would perhaps give in order to receive the secure cc?”
“Recover like credit wise? Unfortunate there is no recovery, you are fried , you can try to get it removed from your credit report but that’s unlikely , once it gets sold to collections you can negotiate a pay to delete deal with them”
“Good to know thank you. Definitely will be paying off every month/ only purchasing what I already have cash for.”
“Be real with yourself. If you didn’t spend the money would you just waste it? If so, know that and be smart with it. Otherwise, me personally.. I would let them all go to collections and just wait 7 years until they fall off your report and use this as a fresh start. 7 years flys by lol”
“Hello all, I am about 28k in the hole in CC debt. I work but I only make $40k a year. I qualify for chapter 7 in my state and I was going to go that route until this week I find out I am inheriting $30,000 from a life insurance policy on a family member who passed away. I owe about 6 different creditors Discover-$8,100 they’re settling for $4,800 CITI-$4900, they’re settling for $2500 Amex-$2,500 they’re settling for $1,400 A local community bank-$,3800 they’re not willing to settle and the acco”
“ran a service business through this exact spot, so take this as one operator's opinion, not advice from anyone qualified. the thing that jumps out to me isn't the credit history. it's the $600 months. a lender looking at three years of $600 to $5k swings sees risk no matter how clean the file is, and honestly they're not wrong. borrowing 30k into that swing means the payment is also due in the $600 months. before the loan conversation I'd spend 60 days on two boring things. f”
“I was a stupid 18 year old and defaulted on 2 credit cards for a total of around 4k. It has been almost 7 years since these went to collections. Is it true that after 7 years these will disappear from my credit history? If so, how will it effect my credit score? The defaults effected me for quite some time, but after meeting my current partner I wanted to get my shit together and rebuild my credit. I did the secured discover for a few years to prove to myself I could handle it. Since then I have”
“People here really have been through it all, and I’m glad you’ve gotten some direction. A lot of times it feels like we’re playing a game no one bothered to tell us we were playing. The whole credit thing is bullshit at the end of the day, and I’m proud of you for looking for answers and in general trying to better your life. This is a weird situation in the sense that the lien holder would have had the right to take it to auction up until you paid the car off. But because they’re the ones who t”
“Bankruptcy may be your best bet. Get a free consultation with a lawyer. There are definite downsides but probably not worse than what you are dealing with. You are very young and can start over.”
“Yes you can freeze your credit so no new credit accounts can be opened. And you can sign up for monitoring services to flag if your information is used.”
“So when I was a minor I gave my SSN to my older brother who was into stocks and he opened a Robbinhood credit card with a 20k limit. I just checked credit klarna for the first time and it says I have a good credit score BUT 20k in debt from the Robbinhood credit card. It says it gets paid every month but I’m still in that debt. I got the physical card but never activated it and is still inside my room. I don’t know what to do. I was 17 when he opened the credit card. He said it was for me and my”
“talk to your creditors, and tell them your having a hardship .See if the can go come down on the i interest .Most of the time they will work with you .”
“So a question. Currently considering a debt management plan for credit card debt, but I’m worried about what it does after the plan starts. For anyone who finished one or was on one for a while, did it come up later when applying for a car loan, apartment, mortgage, or new card? My bigger concern is future approvals. If the cards get closed or restricted, that could hit available credit and utilization. But does anything about the DMP itself show on the credit report, or is it just the account s”
“I did books for this company that recently went bankrupt. I rang the alarms to the owner last year that the cash flow is nowhere where it needs to be to continue to be sustainable and its heading in direction of closure, cant operate in the negatives. He floated money from his other company that does similar work to this one, enough to pay employees and minimum expenses, money bled. He basically took contracts under the new one and contracted this companys man power to work on some of these cont”
“Has anyone gone through a hardship request with a credit card Company? A friend has an addiction to grocery shopping & has maxed out her card. She lives on social security & can't pay it off. $20k. Has anyone had experience with this? Thank you in advance. I know..how did she let this happen?! She only gets $2,200/month Social Security. Please don't give opinions on how this happened, just looking for someone who may have gone through the process. WHY am I GETTING A MESSAGE THAT”
“After quite a few harrowing years, I sold my house and paid off the IRS, State Taxes and all my charged off credit cards. While my credit is shit right now, we did do somethings right. Kept paying the mortgage and car always and are rebuilding. So now that I am done paying everyone i have cleared about $260k. Plan is to rent for a year maybe two then buy. Where is the best spot to park that cash? submitted by /u/Sea-Communication705 [link] [comments]”
“Can anyone explain why one might file for bankruptcy, what that process is like, what are the various outcomes? Bonus points if you explain like I’m 5 years old. Extra super bonus points if you can explain what it’s like in Alabama, USA. If this leans too far down into a legal hole, please direct me where I can ask this. I’m NOT implying I’m filing for bankruptcy. submitted by /u/coldhandswarmh3art [link] [comments]”