What is the difference between bankruptcy & now not filing for bankruptcy when in debt?

If you are keeping up your payments and then file bankruptcy usually in about a year or two you can get small lines of credit. A credit card with $500 limit, etc. If you let your bills pile up and don't pay them....and don't file backruptcy they will look at you as a high risk for any and everything. If you always pay on time and only have the bankruptcy, they feel like it was a one time mistake and not that it is your lifestyle to not pay bills. I know of people who have filed bankruptcy and have a higher credit score for the 10 years the bankruptcy is on their credit then other people who have never filed bankruptcy but never pay their bills on time.

Once you are a bankrupt, your trustee can sell any assets you may have to pay off creditors. This includes property, cars etc. However, if you own nothing and you are heavily in debt then it's a viable option as the non-stop phone calls and threats from creditors will stop. Your credit rating will be affected for a number of years but in today's world there is always someone willing to lend money although be very wary of the interest rates being applied.

Lets keep it simple. If you file bankruptcy and you qualify for chapter 7 all your debts go away.....and you are debt free. If you dont qualify for chapter 7 and must go through a chapter 13 then you will need to pay at least $100 per month for up to $5 to $6K to your creditors...it all depends on what they now call the ''mean'' test. If you have no assets that can be attached there is very little your creditors can do, in this case you will probably be in chapter 7 and be done....if your income is from social security, disability, veterans benefits and erisa pension then your income cannot be garnished...so if you were not to file bankruptcy and you would be sued for collection of money, and even if a judgement is obtain what are they going to do with it....nothing, since it is basically not enforceable...most companies do a research to see if they can get something from you, if not why go after a law suit and judgement....also in a bankruptcy you will have to wait about 10 years for it to clear from your credit report. As far as future credit is concern, you should not have any problem in getting a car loan and some ot her type of credits, even a small credit card...of course interest will be high...and if you pay this well for a couple of years...you are on the way again...good luck

I found interesting information about your answer & options here. (this article: Personal Bankruptcy, the myths and facts:) http://all-debt-consolidation-loan.blogspot.com/2007/08/personal-bankruptcy.html

Your credit rating won't go up from a bankruptcy, BUT your debt to income ratio will improve when you get your discharge, which can make a difference in getting credit. You WILL be offered credit cards right away, and it typically takes two years before you can get a mortgage.