When is bankruptcy the way to go?

[Justin89]

I know people who have filed bankruptcy, and they have lived fine since. But I am curious to know what exactly happens when people file for bankruptcy. Does it destroy your credit score and everything else? I know you can't get loans for a while, and other support. What exactly happens after one files for bankruptcy? 

[Mila]

Your score tanks and you are stuck with that for sometime. I think after 4 years, you will be able to start building up your scores though. You can usually get a credit line at a store after 2 or 3 years, then with good history, companies will start sending you cards again. It will be off your records after 7 years I believe for most states and which time you can have full control again. 

[James]

Bankruptcy is only the way to go when it is your last resort. It is a horrible system that seems to reward people that over leverage themselves but if it is your only option then the rules are made already to play the game. 

Bankruptcy will stay on your record for up to 10 years. Now the older the bankruptcy is the less impact it will have on your overall credit score. 

Chapter 13 bankruptcy stays on your record for 7 years

Chapter 7 bankruptcy stays on your record 10 years

Foreclosures stay on your record 7 years

Collections will stay on your record for about 7 years

All will remain on public record for 7 years

Be responsible and plan well. Do not take on so much debt where bankruptcy looks like the only the way out. 

[Carson]

Yeah, it's definitely a last resort type of thing. Make sure you do everything in your power first before you ever decide to file, because it can be a long time before you can recover. My friend had to file years ago, and it wasn't easy to do or get out of.