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I don't know anyone who filed

A family member did. I don't know a lot of the details though. He bought a house when the market was super hot and then lost his job, and couldn't pay his mortgage. He has since changed his habits and was able to buy a nice (affordable) house last year!

My MIL did twice. Once long before I knew her, and once before she moved in with us. She went to a bankruptcy trustee. In the end, the amount of money she claimed and had to pay back she probably didn't need to claim bankruptcy, but she did. Three years of payments and that was done, she's managed to buy a house (at a high interest rate) and start her life again.

I believe it will be on her credit file for 14 years because it's the second time.

I know one person who did (well, it was a couple), but I don't know all the details. I know they were in some sort of program afterward where they were supposed to rebuild their credit, but they ended up not paying their mortgage on time and got behind on payments and so they didn't meet the requirements of the program anymore. Needless to say they're not in good financial shape now...but I'm led to believe if they'd stuck to the program ad it was laid out they would have been able to rebuild their credit and have the claim removed from their report...

I know a couple who did. I think they had a company that just didn't succeed and they had to file. Not sure about the lawyer business, but knowing them, I would imagine they'd have had one.

@Crisark: I definitely think it depends on the situation, but for the most part, I hold no judgements towards people who have needed to file for bankruptcy.

I'm willing to be most people know someone that has - they may just not be aware that the person filed.

I agree about the stigma! Bad things happen to good people all the time.

@Crisark: I will say, the couple who did file, they have more than risen above their money matters. They are doing quite well from what I can see. Anything is possible.

ETA: I don't want to sound misleading, they are very comfortable considering their past. They are not "rich" by any means.

I've worked in bankruptcy for 5 years. You'd be shocked at how many people of all walks of life file bankruptcy.

I know a few people - work related- that have filed for bankruptcy. Every single one of their financial woes stemmed from divorce.

@Crisark: It is separated by the federal districts, and there are a few that span my state that we file in

MIL did during the recession. My old boss did as well. I don't know the details though.

ETA: MIL was still able to buy a new car a few years later and my old boss bought a new house only 2-3 years later too.

My parents did in the mid 90s. My father had started a construction consulting business and had trouble getting work during the recession. I didn't really know what was going on because I was in high school, knew they were upset and tried to stay out of it. They are both retired now and living comfortably.

@gingerbebe: I'm glad you're parents were able to bounce back. My dad lost his business and they almost lost the house, too. It was a pretty unsettling and scary time.

I know plenty of people who have filed. All stemmed from either divorce or failed businesses during the recession. All walks of life and all ages. And I know tons of people who have lost their house. This area was hit really hard in the past 5 years. We had one of the worst housing markets in the country. It was awful and it made me so much more empathetic to people's financial troubles. I feel grateful every day that we're still doing ok.

No one has shared it with me, I bet I would be surprised, though.

This is one of the reasons I am a big proponent of teaching money management in schools. I think a lot of the time, people don't understand financial instruments and debt. There's no shame in not understanding, but there is no excuse for not standing up and saying "I don't understand" to your lender.

I know someone that has, and they filed twice!

I personally know people who have filed for bankruptcy, and I used to work at a legal aid clinic for low income (poverty level and below) clients and helped prepare many bankruptcy filings. The majority of people who file for bankruptcy in the US file because of medical bills - *and* the majority who file have insurance! Sad, huh?

It did get frustrating preparing filings for people who were disabled and whose only source of income was SSI/SSDI, and who filed every 6 years (min amount of time between times you can file for bankruptcy) and who had racked up 60, 70, 80k or more in credit card debt in that time. On one hand, it was frustrating that there was a total lack of financial understanding or responsibility, on the other, those credit card companies should never have been lending to those customers.

I think there needs to be more education on finances in high school and college, and much stricter regulations on the subprime lending industry. When you have car lenders who charge 20%+ in interest for car loans, payday lenders charging more than 300% interest, credit cards that jack the rate to 24% upon 1 late payment, etc. how do you expect people to get ahead? The people most likely to use those services are the same ones most likely to get in trouble and not be able to meet their lending obligations. Then they turn to bankruptcy. It’s a nasty cycle.

I know a couple of people personally that have been through bankruptcy. I work in bankruptcy, so I see it all the time and can tell you it's pretty common. Most people do (and should) retain an attorney. Bankruptcy is a fairly complex world of it's own rules, so there are some landmines you can miss if you're pro se (representing yourself). The cost depends on the type of case the person is filing and how complex it may be. How long it takes again depends on the type of bankruptcy. A chapter 7 bankruptcy is one that liquidates all non-exempt property and they're shorter usually, unless there are some issues. Chapter 13 bankruptcy (what people often do if they're trying to save a house or some other type of property) take longer for you to receive a discharge. A confirmed plan doesn't take that long (a matter of months typically), but then you make payments for 3-5 years depending on if you are above or below the median income. You're not discharged until you've completed all your plan payments. Chapter 11s are a different deal, but the average individual doesn't file for Chpt. 11.