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Gurus, What is impact of declaring personal bankruptcy...
- Thread starter helge
- Start date
waytoolong
Registered Users (C)
As far as I know your bankruptcy has nothing to do with your visa status - but everything to do with your credit history. Bankruptcy can protect you from debtors, but for 7 years you can forget being approved for anything that requires a credit check. After 7 years you start to rebuild your history from scratch. There might be some assets you can hold on to during a bankruptcy, but varies from state to state. It is a long hard road that only the most desperate venture on, so be careful and make sure you (or whoever is planning one) consults a very good lawyer.
Does declaring bankruptcy have any implications regarding immigration? (Like being a 'good citizen', no burden to society, etc...). Anything along the line "So you declared bankruptcy 5 years ago and now you want to become a citizen?" or "You are declaring bankrupcty but want us to approve you for a greencard?".
A very good friend of mine had really bad luck in the stock market and will loose his job most likely in April on top of it. I am concerned he might jump off the balcony as he has difficulties finding a new job in the current economy and is fairly stressed out.
A very good friend of mine had really bad luck in the stock market and will loose his job most likely in April on top of it. I am concerned he might jump off the balcony as he has difficulties finding a new job in the current economy and is fairly stressed out.
GeeCee Saga
Registered Users (C)
Helge sorry about your friend.
technically it should not affect your visas and will nto affect his greencard. I am not sure if they do a credit check for citizenship. Goes with the whole background thingy. It will be tagged on your social security number for 7 years. Simple solution apply for citizenship after your 7 years are up.
It's a far shot but it probably will not affect citizenship either.
Trust me bankruptcy is the last of all resorts your friend wants to use. Finding an apartment and getting it will also be difficult for him.
technically it should not affect your visas and will nto affect his greencard. I am not sure if they do a credit check for citizenship. Goes with the whole background thingy. It will be tagged on your social security number for 7 years. Simple solution apply for citizenship after your 7 years are up.
It's a far shot but it probably will not affect citizenship either.
Trust me bankruptcy is the last of all resorts your friend wants to use. Finding an apartment and getting it will also be difficult for him.
waytoolong
Registered Users (C)
I agree with GeeCee Saga. Bankruptcy is not illegal. Only thing that matters for INS for GC is that
1) The applicant has not done anything illegal
2) Never lied on his/her application
3) Will not become a charge of the state
Bankruptcy creates a invalid credit score (9999) at your credit reporting bereaus. That will make renting an apartment or buying a car almost impossible. However, it is no more illegal to have a score of 9999 as it is to have a score of 700. INS cannot possibly deny any application based on invalid score. A person with a credit history < 6 months will have NO score at all. That will be the case 7 years after bankruptcy. However, that does not stop applicants (under some categories) from being a naturalized citizens.
Before bankruptcy, some folks apply for as many credit cards as they can and max out all credit cards. It is perfectly legal since bankruptcy, if approved, will protect the person from debtors. It is a good idea to keep at least one credit card in good standing since for 7 years all your credit apps will be rejected. Then at least you don't have to pay everything using cash. After bankruptcy, the applicant will almost invariably need a cosigner to be approved for anything that requires a credit check.
Again - best to consult a lawyer and maybe talk to a couple of folks who have been thru it. The downside is huge.
1) The applicant has not done anything illegal
2) Never lied on his/her application
3) Will not become a charge of the state
Bankruptcy creates a invalid credit score (9999) at your credit reporting bereaus. That will make renting an apartment or buying a car almost impossible. However, it is no more illegal to have a score of 9999 as it is to have a score of 700. INS cannot possibly deny any application based on invalid score. A person with a credit history < 6 months will have NO score at all. That will be the case 7 years after bankruptcy. However, that does not stop applicants (under some categories) from being a naturalized citizens.
Before bankruptcy, some folks apply for as many credit cards as they can and max out all credit cards. It is perfectly legal since bankruptcy, if approved, will protect the person from debtors. It is a good idea to keep at least one credit card in good standing since for 7 years all your credit apps will be rejected. Then at least you don't have to pay everything using cash. After bankruptcy, the applicant will almost invariably need a cosigner to be approved for anything that requires a credit check.
Again - best to consult a lawyer and maybe talk to a couple of folks who have been thru it. The downside is huge.
Chapter 7 Bankruptcy stays on one's credit report for 10 years, not 7. The derogatory information is what gets dropped after 7 years.
http://profs.lp.findlaw.com/bankruptcy/index.html
My ex roommate did it in 1996. He reaffirmed his car loan, and did not include any of his department (sears, hects etc. etc.) when he filed for his Chap 7. He also reaffirmed the debt on one of his visa cards. He got an offer from Capital One to opena secure visa card account. For depositing $200 he got a credit line of $500. After 3 years Cap One made the account as a unsecured account and refunded his security deposit.
He was able to lease new, and even obtain a new car loan (American Honda Finance). This was recently 2 years back. When he filed for Chap 7 he had a Car loan from Volkswagen Credit, and he never missed a payment. He was able to get a new car lease (Audi) in Jan 1998 again from VW Credit.
AT&T Universal Card was the one who would not let him declare their account. They said that he has taken cash advances to pay other bills or spend it. His debt on that card was approx 8k. AT&T settled for $2400 payment on the account, and he paid it on installment.
I know everyone goes through a bad phase in their life. So it's not a sin to declare Bankruptcy.
Your friend needs to do is to get a good Bankruptcy attorney. He shouldn't be signing an agreement with a $500 attorney. If he is current on all of his accounts, and never been late on any of his accounts, then he can always go through credit counceling (CCC). They might be able to get the debts reduced and even reduce the interest. I am not sure, but if he's been current on all of his accounts, then it might be tuff to declare Chap 7.
http://profs.lp.findlaw.com/bankruptcy/index.html
My ex roommate did it in 1996. He reaffirmed his car loan, and did not include any of his department (sears, hects etc. etc.) when he filed for his Chap 7. He also reaffirmed the debt on one of his visa cards. He got an offer from Capital One to opena secure visa card account. For depositing $200 he got a credit line of $500. After 3 years Cap One made the account as a unsecured account and refunded his security deposit.
He was able to lease new, and even obtain a new car loan (American Honda Finance). This was recently 2 years back. When he filed for Chap 7 he had a Car loan from Volkswagen Credit, and he never missed a payment. He was able to get a new car lease (Audi) in Jan 1998 again from VW Credit.
AT&T Universal Card was the one who would not let him declare their account. They said that he has taken cash advances to pay other bills or spend it. His debt on that card was approx 8k. AT&T settled for $2400 payment on the account, and he paid it on installment.
I know everyone goes through a bad phase in their life. So it's not a sin to declare Bankruptcy.
Your friend needs to do is to get a good Bankruptcy attorney. He shouldn't be signing an agreement with a $500 attorney. If he is current on all of his accounts, and never been late on any of his accounts, then he can always go through credit counceling (CCC). They might be able to get the debts reduced and even reduce the interest. I am not sure, but if he's been current on all of his accounts, then it might be tuff to declare Chap 7.
Very informative replies from all! I wanted to highlight the same point on bankruptcies being reported for 10 years .. NOT 7! But, I'm not sure if this is the case in all the states.
Also, is using the debt consolidation services a better option than to declare outright bankruptcy? It will spoil the credit history(and the score of course) but may not be as bad as bankruptcy! Please correct me if I am wrong. The consolidation service would negotiate a settlement with all the creditors and basically lower the total monthly credit payment down to a manageable level thereby helping one get out of debt.
Also, is using the debt consolidation services a better option than to declare outright bankruptcy? It will spoil the credit history(and the score of course) but may not be as bad as bankruptcy! Please correct me if I am wrong. The consolidation service would negotiate a settlement with all the creditors and basically lower the total monthly credit payment down to a manageable level thereby helping one get out of debt.