Credit Advice -- HELP!!

[phumanr]

All,

I was laid off about 11 months ago and racked up about $85K in CC debt. I am now employed, but the cc's are now shut down. They are agreeing to work out plans with me to repay the debt, but the cards will be shut down (i believe hurt my score worse).

Before the job offer, I considered BK strongly. I am so far in debt with back payments. Does it make sense to try and get on plans with the credit cards, or file BK and start fresh? My credit scores are 472 (EQ), 553 (TU), and 554 (EQ). They have fallen drastically over the last 3 months.

Thanks for any advice,

Phumanr

[Tooliebell]

Depends on what you want to do personally.  If you pay the debts either on payment plan or Paying in Full, this is not going to help your  credit score unless you get them to agree to delete the derogatory information.  I have just recently paid off all my bad debts and got NO increase in score.  I have to now work on trying to do GW letters to see if they will delete.  If you file BK, the debts are erased, you can start fresh but your credit score is not going to increase either until a couple years have gone by and you are able to make new accounts and pay on them good.  I have heard of people getting all kinds of credit within 2 years of a BK.  Personal choice here.  I am in a bad mood today and wished I would have just filed BK!  But I know I did the "right" thing.  Just won't help me in my quest to buy a new home right now.

[Anonymous]

i filed bk in 97. took me about 6 months to a year before i had credit cards again. by early 99, less than two years i had credit scores close to 700. right now i just finished going the other way. Ive paid back everyone i owed and i have no debt. my eq score is still only 536. 

save your money. the fico score system rewards people that file bk with an easy rebuild of score. ive learned my lesson. i should have filed bk this time and put the 20k in cash that i used to pay off my debts to open a couple big secured credit cards. this would of had my scores up in the mid 600's by now.