Is bankruptcy something I should consider?

[Anonymous]

Hello everyone,

So, I've been working hard paying off collections and old debts. My Credit scrore was sitting below 400 about a year ago. Today all 3 are around 600. I have a $200 Secured Cap One and just got a non secured $375 from my Credit Union and a $300 Pier 1 card. So I'm really trying to and have recovered from my mistakes when i was 19-20. So, now the bad. I have recently been hit with a old account from Sprint (1-2 years old) for about $1300. I was able to get a settlement offer for $600, but havent jumped on it yet. I also have an auto loan that im 2 years into with 4 more left with perfect payments. The bad of that is it's from Drivetime and I have stupid high APR and Im about $6000 upside down. I recently tried to purchase a new car with trading this one in, but since I'm so negative with it, I cant get approved without A LOT of $$ down. Is Bankruptcy something I should consider to get out of the loan? Will continueing to work on my Credit score allow me an ability to roll over the negative amount into a new loan later down the road? 

Thanks in advance for any info.

[Anonymous]

No, Pay the settlement to sprint. There are other option for getting right on your car loan, easiest would be to just continue to make your payments, as long as you don't have a need for a new car immediately. You can also pay extra to help pay down the loan, and then trade it in and take out a new loan.

~Phil

[Anonymous]

Yeah, I plan on paying the settlement. What are my options for the loan? Will having a higher score/history layer on allow me to roll the nagyive equity to a new loan?

[Anonymous]

Auto loans are based on LTV percentages, many lenders only go up to 100% but a few lenders will refinance you at 120%.

Do you NEED a new car or just dislike your Interest rate? I'd continue to just keep paying it down and throw extra money towards principle when I had the money. You should also head over to the Auto Loan forum for refinancing help.

The other option is to wait until the end of the year, find a car that has huge rebates and it will be easier to roll the negative in if you can get enough in rebates to bury it.