Given the effect it has on credit score, it will perhaps be more difficult to accumulate debt — it will be harder to take out large credit card, mortgage, or other loans. Probably not applicable to medical and whatnot.
In theory I think it makes sense: loans should be a privilege not a right, or something like that. But in reality, loans are essentially required for modern life, at least in the US. So the people who can least afford it end up with loans with ridiculous interest rates (even if the total loan amount is smaller than it would be pre-bankruptcy).
I am fortunate enough to be able to pay off my credit card every month, so the interest rate doesn’t really matter. It’s a great, but dystopian, example of positive feedback: those who can afford pay less (no interest), and those who can’t afford pay more (interest).
Could you please elaborate on the claim that loans are essentially required for modern life in the US? You might be able to make the argument for a mortgage but even that is not absolutely required. Possibly student loans could be seen as required but those are largely government subsidized/administered and typically given out to younger people who haven’t yet gone through a bankruptcy.
Credit cards, for instance, are not required but extremely useful. For instance, my recollection is that when booking hotels or rental cars with a debit card they will put a hold on your account for collateral. This could be a problem if you’re living paycheck to paycheck. If you have a credit card, you may get a hold as well — but this is just reducing the amount of available credit. Functionally this is the same, if you have enough money, but if you’re living on the edge and your rent money is in your checking account, this is pretty unfortunate in the case if a debit card.
Additionally, credit cards offer consumer protections, including chargebacks. My understanding is that debit charges are much more difficult to dispute.
And, in the US, for many people not in urban centers, owning a car is essential for life/work. Quick Google search claims, in relation to savings, “The median balance for American households is $5,300.” So if your car bites the dust, buying a new (used) car may not be possible without a loan.
You’re right though, it’s certainly not literally required.
7 year cool down, and unless you are Trump and can afford extremely expensive legal representation, your odds of actually getting a full discharge of debt go down.
Yes, there is NO limit on the number of bankruptcies you can file for. However, there are time limits between filling dates. Here’s what a Forbes article mentions about it:
Just as there are different types of bankruptcy, there are different rules for how often you can file bankruptcy. The waiting period to file another bankruptcy case generally ranges from two to eight years, depending on the type of bankruptcy. In some situations, there may be no waiting period.
However, good luck getting creditors for years after filing for a bankruptcy. I imagine very few will trust you / loan you money, except for the most predatory (i.e. loan sharks). And if you did go with a predatory source, a future bankruptcy may not help you discharge the debt given predatory sources commonly operate outside of the law.
Can you declare bankruptcy again?
Pretty sure Trump has done it 4 or 5 times. Those were company bankruptcies by a nepo baby, though, so probably not the same rules as regular people 🤷
Given the effect it has on credit score, it will perhaps be more difficult to accumulate debt — it will be harder to take out large credit card, mortgage, or other loans. Probably not applicable to medical and whatnot.
In theory I think it makes sense: loans should be a privilege not a right, or something like that. But in reality, loans are essentially required for modern life, at least in the US. So the people who can least afford it end up with loans with ridiculous interest rates (even if the total loan amount is smaller than it would be pre-bankruptcy).
I am fortunate enough to be able to pay off my credit card every month, so the interest rate doesn’t really matter. It’s a great, but dystopian, example of positive feedback: those who can afford pay less (no interest), and those who can’t afford pay more (interest).
Could you please elaborate on the claim that loans are essentially required for modern life in the US? You might be able to make the argument for a mortgage but even that is not absolutely required. Possibly student loans could be seen as required but those are largely government subsidized/administered and typically given out to younger people who haven’t yet gone through a bankruptcy.
Credit cards, for instance, are not required but extremely useful. For instance, my recollection is that when booking hotels or rental cars with a debit card they will put a hold on your account for collateral. This could be a problem if you’re living paycheck to paycheck. If you have a credit card, you may get a hold as well — but this is just reducing the amount of available credit. Functionally this is the same, if you have enough money, but if you’re living on the edge and your rent money is in your checking account, this is pretty unfortunate in the case if a debit card.
Additionally, credit cards offer consumer protections, including chargebacks. My understanding is that debit charges are much more difficult to dispute.
And, in the US, for many people not in urban centers, owning a car is essential for life/work. Quick Google search claims, in relation to savings, “The median balance for American households is $5,300.” So if your car bites the dust, buying a new (used) car may not be possible without a loan.
You’re right though, it’s certainly not literally required.
7 year cool down, and unless you are Trump and can afford extremely expensive legal representation, your odds of actually getting a full discharge of debt go down.
Yes, there is NO limit on the number of bankruptcies you can file for. However, there are time limits between filling dates. Here’s what a Forbes article mentions about it:
However, good luck getting creditors for years after filing for a bankruptcy. I imagine very few will trust you / loan you money, except for the most predatory (i.e. loan sharks). And if you did go with a predatory source, a future bankruptcy may not help you discharge the debt given predatory sources commonly operate outside of the law.