1 Account in collections or file bankruptcy??!!!

[AllThingsRPossible]

So my income has changed which has made it impossible to meet my monthly debt obligations.  For the first time i am considering bankruptcy which would wipe out all the progress ive made and the relationships built with the various creditors.  Then the thought occured that really it was only one loan payment that would be neglected versus destroying the relationship with all the creditors.  The payment is 480/mos and I just cant swing it with my new income.  Question for the group would be do file bankruptcy (6 cards at 99% UTI approx 14000 in debt) or one account with the multiple 30/60/90 day lates and potential chargeoff.  Which looks worse?  Which would be "easier" to bounce back from?  Ideally I could pay down the CC debt by June next year, maybe sooner.  Its just that darn loan pmt...  Or is to Bankruptcy court i go.......

Thanks for any opinions/advice

[krielly]

Maybe I am missing something, but how can you pay off $14,000 by next June, but are unable to afford the $480 monthly payment? I'm not trying to be judgemental, but this just stood out to me....

K

[Anonymous]

Here's my thoughts. IF you let that one account go into collections, are you able to pay down your other debts so you aren't at 99% uti? If you can't then you're just prolonging filing bk. If you truly can't afford all your debts, then it might be worth looking into. I assume the large payment is a CC. With my experience doing collections and banking, I really wouldn't put hopes that you could start paying down next year. Depending on the creditor they may move it quickly into collections after 90 days, or it could sit in their office until it's assigned a year later. Your eally have no way of knowing. If it does go to collections, that's another baddy on your credit and there's no way of knowing how "nice" that collection agency is going to be towards you. I personally was always nice, but I worked on comission so I always told people what they had to pay or I would sue them unless they had some traumatic life event that justified a lower PP monthly.

Have you thought about credit counseling, to see what if anything they could help you with? I know when I lost my job when I was younger I had about 14k in CC debt and I contacted Debt Reduction Services and about 90% of my creditors were willing to work with us to get lower monthly payments due to them decreasing the APR on the cards. It took about 4 years paying it off and I always threw whatever I had extra at it. The only down side is if you decide to do credit counceling the cards woudl be closed and reported that you were in a credit counceling program, but that's really not bad in the larger picture. If you can't swing credit counceling, I think you should seriously look at BK. Even though you have built relationships with creditors, depending on which cards it is generally they take you back rather quickly. PLUS if you aren't paying out all that money into nothing since it's cc's you could save it, and re build smarter. You really aren't doing any good just paying minimum payments on the cc's if they're maxed out since the APRs are high most of your payment I guess is just going to the interest vs principal, so unless you can pay more every month to one card till it's PIF then move on to the next one there really isn't any point to just keep paying vs looking into BK.

[mrsjr]

I would avoid bankruptcy if at all possible.  Just keep in mind... if you let that loan charge off, the creditor will likely sue you and possibly gain a judgment against you for it.  If that happens, they can garnish your wages.  I would try to come up with other ways to save money every month so that you can afford that loan payment.  Can you get into a car with a lower payment than what you currently have?  Can you get into a home with lower payment/rent than you currently have?  Can you sell household items that you're not using anymore (yard sale) to pay your loan?  Debt consolidation?  Also, I would cut up all of your credit cards until they're paid off.  If you file for bankruptcy, you will have to start all over and you will have long waiting periods before you can buy a house among other things.  Hope you can work things out.

[Vegas4Play]

There are many factors to consider with filing a  Bk...depending on income that would give you an indicator of Chapter 7 or 13, I would speak with a BK lawyer ( can not hurt ) I would try to avoid the Bk. honestly, 14K is not a lot of debt, You may have to pick up another Job if at all possible, but it is not an amount that I woud consider BK over. I would also try to speak with family to see if they can help out at all.

You just need to find a way to generate more income to lower your debt.