What will happen to Bankrupt People?

[powayseller]

I spoke with a realtor’s spouse today, and he told me how bad it is out there now. His wife works in real estate/lending, and there are too many people with ARMs. We discussed what they would do.

What will they do?

Once you file bankruptcy, your credit score is shot, and you can’t qualify for a rental. Landlords run a credit check before they let you rent.

We will have thousands of San Diegans in foreclosure and unable to obtain a mortgage or a rental. They won’t have money to pay the costs of moving + deposit + 1st months rent, at least $8K. How can a bankrupt person have $8K?

Will they all move back in with their families?

I think the government will have to step in somehow.

[waiting hawk]

ya so more tax payer $ can go to stupid people.. great idea.

[PD]

The government should not have to bail people out of their financial stupidity.

Perhaps you could start a private charity.

[tucker…]

Bankruptcy people. You can get a new car after bankruptcy the day after it is dismissed you want to know why because it is like you have no credit obligations I had to file last year because I used credit card money to finance the stock market boom in 1999. This was a disaster I lost all of my money .i see the housing market the same way it like they say people are like herds of cattle. Buy because you can be rich. I only had 30000 dollars in debt I stopped paying my cc bills in 2000. five years after a collection agent came after me even after I sent them a cease and deist letter I got a letter to go down to the Chula vista sheriff department. I was debating about going into bankruptcy ,after hearing the laws were going to change and a court hearing by the collection agent to have my wages garnished. I said the hell with this file. Oh even though I owed all that money in 2004 .I was allowed to have credit again I had about 4000 worth of debit in cc bill’s then I researched bankruptcy and found out all my cc debit can be erased.. I felt bad about the newer cc I had. but I had said to my self they can write it off. Any way rent before you file so your credit doesn’t look to bad. I see a prospective land lord having a renter that has filed bankruptcy and that has a stabile job like working for the govt or state. Cause you can’t file again for a seven years.  Bottom line bankrupsy is not as bad as you think. Even though I haven’t checked out the new laws its better than somebody garnishing your wages.

 

Powayseller you have good posts ( a little long though) but very very  good!!!

 

[Beach Rat]

Do you even have to file bankruptcy if you have a foreclosure? Maybe I’m wrong what’s to keep you from handing the house back to the bank? If it sells for less then you owe then 1 you would end up with a house payment on a home you don’t own any more. Sad but again this happed to a good friend of mine out in Temecula. Or 2 if it is a large enough debt the bank will realize it will force you into bankruptcy and they will probably never see a cent of the money so they will write the debt off and move on. Sure you will get taxed on that as income. Will that change with the new bankruptcy laws? If it doesn’t then as long as you go into foreclosure early there is no reason to not walk away at the first sign of trouble. Foreclosures stay on your record for about 7 years so if you walk out in the first years of the down turn you should be ready to get back in as the market is turning around. I don’t see the problem.

[anxvariety]

The best response I’ve heard from someone when asking them this question was.. people are like rats, theyll find a way…

The goverment will probably throw some twist in IRA and tax sheltered savings to say that bankrupt people can use their savings to buy a house without penalty.. (Get it? It’s a joke..)

The US trains its sheep well.. from elementary school on, kids are told about the american dream… ”owning a house”.. so eventually in 10 years or so they’ll have enough fresh meat to do a shakedown of the middle class again..

This is some list!!!
http://www.amazon.com/gp/richpub/listmania/fullview/1BJTXO2QSI82T/104-9010536-4773519?%5Fencoding=UTF8

[lendingbubblecontinues]

From Merriam Webster’s dictionary, the first listed definition of “dream” is:

” a series of thoughts, images, or emotions occurring during sleep ”

NOW I understand…. the entire f’ing population is ASLEEP.

[MANmom]

My dear, late Grannie from Seagoville, Texas was a simple woman, born of the depression, lived in a railroad car at one time and didn’t have much education. But she had more words of wisdom than most folks these days. She often told me “Judy, you can’t save people from their own stupidity.” I wish the government would learn that simple phrase, we would all be better off if we took responsibility for our own bad decisions.

[carlislematthew]

I think that once you realize that you can’t pay the mortgage anymore, and you miss the first payment, then why bother making any more payments? You have several months before you’re in REAL trouble, so why not save as much cash as possible and makes plans for the exit?

I suspect that’s what I would do in that situation. If you’re not paying the mortgage or the HELOC, you can save quite a bit of cash, and the payment issues probably haven’t made it onto your credit report yet, so renting a place shouldn’t be too hard.

I’ve known a couple of people that have gone bankrupt, and these people were never short of cash. Hardly a representative sample of course, but that’s been my experience. They had crushing amounts of credit card debt and phone calls from people demanding money, but they were always wearing nice clothes, eating out at the best sushi places. OK, so I’m thinking of one particular ex-girlfriend here. 😉

[Anonymous]

You are saying that they will be bankrupt because their ARMs will readjust and they cant afford the payment correct? If they are bankrupt depends on when they bought the home. If recently as in last summer, yes they have little equity and cant sell. If they bought lets say 3 years ago, they can sell and payoff the loan and debt and prob still have some cash for moving and the 1 month deposit to rent. So it depends on what the persons specific situation is really. Not every ARM holder is screwed if they run into tough times.

[Author]

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