Will I regret filing bankruptcy If I can settle?

[Anonymous]

Hello folks!

I consulted with an attorney about chapter 7 and I am good to file. I just have to make the decision.

The fact is that I owe around 50k in credit card debt, but have been able to negotiate on my own with most collection agencies and I am able to settle them.

Settling will cost me around 13k. vs Filing that will cost me around 4k (filing, attorney fee, plus paying off a 2nd mortgage so I can keep the house)

I am concerned about life after filing. I have seen some people qualifying for a home after just 2 yrs after filing and they have been able to get credit cards and everything as nothing ever happened. Which is great, but what is the hidden cost of filing bankruptchy? I mean, does it really affect you spiritually, or will hunt you? and for what things have you felt it more? Like in what situations have you wished you never filed.

If you would have a chance to do it all over again would you have filed or settled? Settling will mean exhausting every penny you have saved that you are using while unemployed and getting back on your feet, you'd be making an extreme effort to pay them, but you can---- that is the scenario on settling. Or keep the money and just file and move on.

Second question.

If I settle my accounts. Is it slower to rebuild my creditworthyness vs filing? Is it more damaging to my credit as viewed by employers or lenders in the near future?

I am thinking it might look better than filing, but might be worse for getting credit again since lenders don't know what else is yet to come and may think it might hurt my ability to pay them if they give me credit... thoughts?

Thanks for your replies.

[aussiesareforever]

BK gave me a fresh start. I have no regrets but if I had to go back in time, I would not have filed. I didn't really know what I know now and I didn't pursue any other options, like trying to settle.

My credit is decent four years post BK. I'm smarter about my credit and determined never to get into the same situation again. Never, ever, ever. I could buy a house if I wanted and for most part, I can get approved for additional cards- other than a few BK unfriendly creditors.

However, I still have moments I wish I didn't have that stain on my credit. Like now, I'm in the process of getting a new job. They are actually just running a background check and would not pull my credit report. But the BK will show up as a public record on the background check. I know the law does not allow discrimination based on BK but it is still not something I'm proud of and something I want my future employers to see.

Then I will likely need to rent a new place when I move to this new town. They will probably want to pull my credit and despite decent scores, I will likely have to explain away the BK. Again, not the worst thing in the world but something I would rather not deal with.

If you settle your accounts, the negative marks will come off seven years from the day of first deliquency. So lets say you stopped paying on the accounts two years ago, you'll be good to go in 5 years. Brand new credit report. Granted that you continue to stay current on everything. If you file BK, you have to wait 10 years. 10 years is a very long time.

Everyone's circumstances are a little different but if I were you, I would pursue my options and try not to file BK. Especially if your loans are past their SOL. I will definitely work really hard to settle and pay them off. Those accounts will stop having a huge impact on as time goes on. AND if you are going to settle, definitely try to get a lot of PAY FOR DELETE. Check the rebuilding section of the forums for information on this but essentially the CA will delete the negative tradeline in exchange for you settling. 

Welcome to the forums and goodluck!

[Anonymous]

thank you for your comment. I really appreciate it.