[BobbyH]

I work in the bankruptcy niche, and I wanted to tweak your statements...

Chapter 13 bankruptcy is deleted from your credit report seven years from the discharge date, which comes 3 to 5 years after you file (because there's a 3 to 5 year payment plan). So if you measure from the filing date, Chapter 13 takes 7 + 3-to-5 years to come off your credit report, which is 10 to 12 years from the filing date.

Similarly, Chapter 7 bankruptcy is deleted 10 years from the discharge date. In a typical Chapter 7 bankruptcy, the debtor receives a discharge 4 months after filing. So your statement is actually quite close, but to be pedantic, it's 10.33 years from the filing date.

In my experience, most Chapter 7 filers can fully recover after about 2 years, provided they are able to make their payments on-time after the bankruptcy.

[cconstantine]

This is a lie that needs to die. Bankruptcy might get removed from your credit report, but the public court records never do. Anyone who does a credit check can (and will) search those public records.

Bankruptcy stays with you forever.

[throw__away7391]

Some friends of mine declared bankruptcy a few years after the financial crisis due to their business failing. They eventually lost their home, but were able to save up some money by not paying their mortgage while their case was in processing). They rented a place for a few years, but after some time, like 2 or 3 years they were able to qualify for a new mortgage with apparently a decent enough rate and bought a house. They were also somehow able to decide which loans to declare bankruptcy on, so they kept their car loan for example.

I mean, I don't know that it is perfect, but I think the bankruptcy laws in the US are pretty decent at least.

[cconstantine]

I'm not saying bankruptcy is bad. It's a necessary escape hatch for the credit industry, and shouldn't have the stigma it does. maunder is absolutely right; the consumer credit industry in the US is nothing but predatory. Good for you if you haven't been bit yet, but their goal is to eat everyone. Whenever I see someone brag about their credit score all I see is a mouse begging for the cat's approval.

More and more you can't even opt out of consumer credit. I have attempted to opt out of it by not holding any credit, except I apparently need good credit to live somewhere, or a credit card to rent a car or do some kinds of money transfers.

Telling people they can file bankruptcy, "reset to 0", and have another chance to redeem themselves is bullshit. The only place it disappears from is your credit report, and implying that covers it is a brazen lie. It really doesn't. Fuck credit scores. What about the ability to get a job, or not live on the street? Having a bankruptcy from 30 years ago can negatively impact your ability to do either of those things.

The credit industry is so deluded that they think your credit report is all that matters, and that's how they want you to think. In reality, it's all that matters to them and they can't wait to get you back in the game.

[ethbr0]

> but their goal is to eat everyone

Their goal is to make money.

If you go them and say "I want to make a very unfavorable to myself deal, that will make you lots of money" then they'll say "Yes."

Caveat emptor by default, with specific exclusions for some worse cases, generally governs financial contracts in the US.

In other words, you have the right to agree to whatever you want to agree to. If you choose to use that power to blow your foot off... well, that can happen.

[hkt]

The contrary view is that the state has at least two jobs: to create an environment where you're in a position to turn down bad deals, and to prevent the very worst deals from being offered in the first place.

Really it is about whether the government's job is to forcibly not govern, or to get involved.

[ethbr0]

The former I'd agree with, the latter I'd question.

Because "very worst" (or even just "bad") deals is a loaded term. Why? For whom? When?

As discussed in this topic, a high-interest rate loan is a bad deal, unless it's the best option you have. Would no loan be better than that loan? Maybe. Should we take away someone's ability to make that decision? I'm not convinced.

At some point, the cost of freedom is freedom to fail. So it's always a balancing act between not making that failure hurt too much or too easy to inadvertently stumble into... and giving people autonomy.

You'd think engineers would understand that you can't optimize for everything at once.