topic Re: To file bankruptcy or not? HELP! in Bankruptcy

To file bankruptcy or not? HELP!

Anonymous — Sun, 07 Jun 2009 03:30:54 GMT

So I am a 24 year old. I have about $50k in debt half of that being school loans which I understand cant be filed in the BK. For about 3 years I did nothing with my bills because I was part of a debt settlement program that got me nowhere and so I took myself out. I recently had a judgement put against me for with one of my creditors. I was able to work out with the lawyer to do a settlement with broken payments for 7 months, although the judgement is on my credit report.

At this point I just want to get out of debt as quickly as possible and work on getting back on my feet with my credit score. Money is hard, I mean...every penny counts for me each month as I set aside rent, bills, and paying off portions of my settlement. At this point I would love some advice on what would be a better situation for me in the long run. I mean I would love to file BK so that I could have some room for money without stressing, however I know that the consequences of BK will affect me in the long run as I am young and ofcourse want to purchase and get a loan for a house in the future.

However paying off my debt will take me atleast 5-7 years or more. Is it better to truck it through and pay it off one at a time by settling accounts or is it better to file BK so that in time I can be debt free faster, improve my credit by paying off my school loan and concentrating on that only? I am very torn. In the long run what is better..to pay off a large debt that will take forever or to file BK have that on your record, be debt free (minus my school loan which I can pay off and rebuild my credit) and work to improve my FICO score?

Any advice and experience would really help me a lot. thanks!

I have been so torn.

Re: To file bankruptcy or not? HELP!

medicgrrl — Sun, 07 Jun 2009 21:51:58 GMT

BK is such a personal choice and nobody can really give you the answer on what you can do.

Is there any way to put your student loans in forebearance so that you may concentrate on paying off and settling the other acccounts? Can you consolidate to lower the payments?

Are all of the outstanding debts past the SOL?

Chapter 7 stays on your reports for 10 years. If these accounts are several years old then they will drop from your credit report long before the BK would. Look at all your options to increase your net income, such as obtaining a second job, doing something with the student loans, getting the judgement paid off so that money can then be used to pay down or off the next creditor. If you take it one step at a time then you may be able to manage the debt and get it taken care of sooner than you think.

I would go over to the rebuilding board also and start putting out specific information to get some additional insight on how to take care of the situation.

Re: To file bankruptcy or not? HELP!

HindSight_20_20 — Fri, 19 Jun 2009 16:48:54 GMT

csong,

I agree that BK is a personal choice one in which I'd not let anyone make for me. Having said that, and also being a BK ch7 person myself 'charged off in 04' if I had to do it all again, i'd wait and truck through the debt ALL of it! Sure you can rebuild your credit after ch 7, as I am doing as well, but that big black mark on your CR is a KILLER for everything from jobs, insurance ect.! and it doesn't go away for 10 years, ... let that sink in 10 YEARS.

So, should you do it? - no one can answer but you.

Would I do it again? No

Can you rebuild afterwards? Yes and approx. about two years after.

Sure I'm rebuilding and it's coming along pretty good so overall i'm fine. Just think about it completly before you make your choice.

Re: To file bankruptcy or not? HELP!

Anonymous — Sun, 28 Jun 2009 20:23:15 GMT

I agree you should get a forebearance and work on paying off debt. The BK will hurt you for a long time in getting a house. I would start with any small debts and see about doing some settlement ofers if they are already charged off. Then get them taken care of. Then you can make whatever arangements you need to make to get the other debt paid. You can basicly keep getting economic deferrments or forebearance until you get caught up on your debt. In the end you will be better off.

One thing that people with alot of debt that file BK sometimes forget (especially if you have alot of C debt) is that although the debt may be forgiven or reduced and although ti drops off your FICO in 7-10 years, the originating company does not forget Alot of people get effectively blackballed from most of the major cc companies because of accounts that were included in a BK

Re: To file bankruptcy or not? HELP!

HindSight_20_20 — Mon, 29 Jun 2009 01:23:41 GMT

@Anonymous wrote:

One thing that people with alot of debt that file BK sometimes forget (especially if you have alot of C debt) is that although the debt may be forgiven or reduced and although ti drops off your FICO in 7-10 years, the originating company does not forget Alot of people get effectively blackballed from most of the major cc companies because of accounts that were included in a BK

Yes I have seen this done, but I have to say that I also have seen people and 'know them personally' that have gotten credit cards with the 'exact' same company that they filed on with no problem at all. So I've seen it both ways. But nevertheless it's something else to consider.

Great point Mickie!

Re: To file bankruptcy or not? HELP!

MzDandylion0527 — Mon, 29 Jun 2009 21:56:24 GMT

As far as the house situation goes (I know this because I have talked with a few lawyers and have done a great deal of reading up on this and am looking to purchase soon myself) You should be able to qualify for a FHA loan 1 year after a chapter 13, two years after a chapter 7. Same rules apply for NACA which has a great purchase program--if you are willing to stay the course.