Help! Bankruptcy or Pay of all debt!

[Daveon93]

I have a bit of debt. 

In and out of collections is about 6-7K.

If I pay these things off over time, will my score go up? Or should I apply for a bankruptcy?

[Anonymous]

Well, I can only speak for myself....

I was in dire financial harship little over 2 years and all my credit cards were closed  charged off for a grand total of 23k debt.   Macy's saved my ass and had mercy on me.

How I did it,

* Coupons are your best friends, and treated myself once a week for a burger or subway to keep my sanity.

* Highest APR had priority, the rest min payments.

* Once I knocked out 1 credit card, I took 1 month off and used the months $ to treat myself as a reward.

* After a year I applied for a CC,  I got turned down left and right but I got approved for QS1 cap1 - Great for rebuilding, Treat it well, if you go this route

DId it increase my CS?

* No, I don't think it did,  but lowering my debt gave a sense of taking responsability for my actions. It was mine after all. 

* Staying current and paying on time and in FULL. 

* Many here will tell you that increasing your CS is a marathon not a sprint.
Good Luck

[sarge12]

If there is a choice between paying or BK, it is best to avoid BK....many times the choices are BK and never ending debt.

[rmduhon]

To give you the best advice you should list your debts (collections, charge offs, cards) along with any DoFD's and what extra money you may have monthly.

[MrsCHX]

Sometimes BK is the best option - but it depends. Most BK lawyers will tell you you need to file NOW. Beware.

I agree with listing important info like each debt (creditor, if it's with a collection agency, date of first default, amount) and how much money you have per month to put towards debt after your monthly expenses are met.

I'm on mobile so can't see if you have scores in your sig. what are your FICOs?

[MrsCHX]

Lost my train of thought. I asked about your FICOs because I had about $9k in cc debt with about $400 minimum payments across the cards. I took out a personal loan for $8500, paid them off and have a payment of $233. I pay more than the minimum on the loan and will have it paid off in 2 to 2.5 years

[Anonymous]

When I was in a similar situation with a bit more debt, I used the company MMI  (Money Managment International). They were able to talk with creditors to lower interest rates and provide a payment plan. The plan is usually what your minimum would be to be out of debt in 5 Years + $41 per month which is their fee so they can make the payments for you. The cards do be come closed but there is no penalty to pay early, and you can pay directly to the creditor if you want to while you are on the MMI Plan. This helped me tremendously as I was able to complete a five-year debt management plan in 3.5 years. I'm now working to bring my credit back stronger than ever. 

[MrsCHX]

Honestly, whatever those debt management companies do, you can do yourself. I know some people have a tough time getting on the phone and making those calls but you CAN. Not to discount your experience bookworm; you obviously made the right choice for you. But, for example, you paid almost $1,800 to them for that and your cards got closed.

Many can save their current accounts. Sure, the bank may CLD / balance chase or end up closing you depending on how bad you've fallen in their eyes, but maybe not.

But all that doesn't really matter until OP posts full details. 

[RobertEG]

I would recommend an initial consultation with a BK attorney.