topic Re: To Rebuild or to File BK? That is the question... in Rebuilding Your Credit

To Rebuild or to File BK? That is the question...

Anonymous — Tue, 23 Jul 2019 01:49:13 GMT

Hello! I have been endlessly searching for my answer in the forum but I just end up even more confused.

In early 2016 we lost our family home after my sibling was diagnosed with cancer and it took a huge financial hit on my father and I. Most of my CC's went into collection and our home was foreclosed, shortly after my sister passed away.

I have about 7 freshly (2017-Present) collection accounts in my credit totaling roughly $7k with my credit score being around 503 on EQ, EX, TU. I am in dire need of purchasing a home in the next 2 years as I am currently paying $2250 for a 1 bedroom apartment (lease ends July 2020) putting a huge dent on my $47k a year which is fine considering my professional is to help, not to become rich.

I have seeked attorney consulations and they suggest I file Ch7 but on the forums I have seen that under $10k it is not necessarily recommended you go that route. My plan is to see if in 2 years I qualify for a first time buyer no deposit grant on a home.

Should I file for BK or pay off my debts and somehow rebuild my credit?

Any assistance is greatly appreciated.

Edit:

Wells Fargo - $969

Plaza Services - $2,717

Contract Callers Inc - $1,074

Jefferson Capital System - $749

The Bureaus - $674

LVNV Funding LLC - $580

Progressive Management - $100

Progressive Management - $75

Re: To Rebuild or to File BK? That is the question...

FireMedic1 — Tue, 23 Jul 2019 00:18:24 GMT

If the total debt is 10g's. That is surely not an amount to file BK over. First thing that pops out is your rent without knowing more data points. When the lease runs out. Isnt there a cheaper complex that has half the rent you pay now at least until you get out of debt? Looks like NYC rent amounts. Living conditions may not be as fancy. But it could be a temp thing.

If you could list who your collections are any other baddies. You may have a few that PFD with a settlement or a full pay off. I'm so sorry about what inspired before. And Welcome to the FICO Forums. Plenty of fine folks that could help you aviod BK.

Re: To Rebuild or to File BK? That is the question...

Jnbmom — Tue, 23 Jul 2019 00:58:50 GMT

Yes I would not recommend filing BK for that amount. I would try to cut expenses, get some extra income, budget and get those debts paid off.

And as @FireMedic1 stated, list yourr debts amounts and who is collecting, so we may offer better options.

Re: To Rebuild or to File BK? That is the question...

Anonymous — Tue, 23 Jul 2019 01:51:51 GMT

Thank you, I just listed the collection agencies and amounts. My 2 year lease is up in July 2020, these San Diego prices are getting higher by the year. At the time we had just lost our home so we needed to get in somewhere immediately and it's a 1 bedroom but the landlord let us use the office as a 2nd room .

Re: To Rebuild or to File BK? That is the question...

Anonymous — Tue, 23 Jul 2019 01:52:56 GMT

Thank you, information requested has been listed. I had a feeling BK was a more aggresive approach to my situation which is why I came here.

Re: To Rebuild or to File BK? That is the question...

Anonymous — Wed, 24 Jul 2019 23:35:26 GMT

Update:

Met with another attorney and they told me the best option was to file because I would not be able to get credit even after paying the under 10k that I have in debt.

So confusing. Help!

Re: To Rebuild or to File BK? That is the question...

ktm214 — Wed, 24 Jul 2019 23:55:59 GMT

The attorney wants to make some money off of you

Re: To Rebuild or to File BK? That is the question...

Remedios — Thu, 25 Jul 2019 02:28:14 GMT

@Anonymous wrote:
Update:

Met with another attorney and they told me the best option was to file because I would not be able to get credit even after paying the under 10k that I have in debt.

So confusing. Help!

That's not true.

You will be able to get credit in time. Once your debts are paid off, you'll probably need a secured card or two to start, but it can be done. I would not be attempting to get secured cards now, because your money should go towards the debt, not deposits

Re: To Rebuild or to File BK? That is the question...

dytch2220 — Thu, 25 Jul 2019 04:14:12 GMT

In case it helps you any, I'm 48k in debt right now with only about 20k of that is active/positive debt due to a car loan and a few other small things. I am rebuilding and not filing bankruptcy and I'd recommend the same for you.

That rent is awfully high, but California. What percentage of your household income is consumed by the rent? Although I don't like everything he has to say, you might want to consider getting on the Dave Ramsey intensive debt reduction plan. The short version of his plan is: get your family on board, get on a tight budgdet, sell everthing, get rid of everthing that has high payments and get something cheaper, beans/rice to eat and second jobs to get debt free.

Good luck, let us know what you decide to do.

Re: To Rebuild or to File BK? That is the question...

Anonymous — Mon, 29 Jul 2019 19:01:22 GMT

Thank you so much. At this time I have rented out a room and my rent has gone down to 32% of my income. I am not moving forward with bankruptcy, I am searching the forum to get more information on the collection agencies on my credit report. I am looking up the Dave Ramsey debt relief plan as we speak and possibly going to start doing Uber in the meantime. Today I received a call from a collection agency at work and it was not taken well by my boss so I really need to get the ball rolling.

of course if anyone has info or suggestions on the CA's I listed on my intial post, please let me know.

Hopefully I can search up settling with these CA's.

Thank you all.

Re: To Rebuild or to File BK? That is the question...

FireMedic1 — Mon, 29 Jul 2019 20:22:39 GMT

Seems like your taking the right steps now. It will take some time. The CA's you listed dont fall under the pay for delete companies. Just start calling and asking for payment plans and settle for less depending on age of the account. Cut back on any spending that you can.

As far as that collectors calling you at work. You can stop debt collectors from calling you at work fairly easily. Simply tell the debt collector that your employer doesn’t want them calling your job or that you're not allowed to receive personal calls at work and they are legally required to stop calling you.

Document the date and time you asked the debt collector to stop calling your job. Following up on a letter will give you additional proof that you asked the debt collector to stop calling your job. If you have to take legal action against the collector, the proof will help support your case.

Keep us updated on your journey. Good Luck!