Showing results for 
Search instead for 
Did you mean: 

Bankruptcy or work with what we’ve got?

Frequent Contributor

Bankruptcy or work with what we’ve got?

About 4 years ago my fiancé and I started our journey of rebuilding our credit. We did great and within 2 years we had many lines of credit and were getting preapproved for a house with scores in low 700s. That summer sh*t hit the fan. We unexpectedly became guardians to his niece and nephew, and then 2 short month later our infant son was attacked by a dog while at daycare. I left my job to take care of him during recovery, and a few months later my fiancé was laid off. Long story short, we’ve spent the past 2 years living off of our credit cards and struggling to make ends meet. In the midst of this, our dog was diagnosed with Addison’s disease and we incurred a $2200 vet bill after he went into a crisis.

I am back at work at a new job as is my fiancé, but we are making significantly less money than before. Our credit is now shot, our expenses are through the roof considering our debt, and we are doggy paddling just inches from going completely under. We’ve considered BK, but I think we are in a position now to avoid it, unless that would be the better route to go?

I need to know where to start. Here is a breakdown of my credit profile:
NFCU cc- 10k balance (closed, current, 3 30 day, 1 60 day lates)
NFCU cc- 9k balance (closed, current, 3 30 day lates)
Both of these have been closed voluntarily and a payment plan is in place as I am trying to keep my relationship with NFCU.
NFCU navCheck-1400 balance (my only open revolving account currently, 1 30 day late)
NFCU auto loan- 23k (open, current but 3 30 day lates)
NFCU Auto loan- 12k (open, current but 3 30 day lates)
Those are the only credit accounts I am currently paying. The others are beyond our budget, and I had to let them go.

Closed cards (all CO mid 2017)
Credit One- 787 balance CO
Capital One-5000 bal CO
Amazon- 1000 CO
Walmart- 1000 CO
Synchrony (furniture)-700 CO

I have 3 open collection accounts
Vet bill- 2200(3 mos reporting, TU only)
Credit one- 787(3 year reporting, TU, EQ)
Gym membership- 500 (1 year reporting, TU only)

I also have 2 student loans totaling 3000 in deferment as I am a student. There have never been any lates on these accounts.

My tax return allowed me to bring all my NFCU accounts current, so now I am able to make the full monthly payments again. However, those payments have not yet been reported to the bureaus. I’d like to get a secured card with some of my return money to increase available credit and have an account with no lates. I also paid off a bunch of other medical bills that were about to go to collections.

According to CreditKarma, TU 435 and EQ 431 (lowest EVER!)

What should I do with the COs? I would like to eventually have a relationship with Capital One and Synchrony again (I don’t care about CreditOne).

Is it time for bankruptcy or can we make it?
I don’t want to lose our vehicles either.
March 2018 - EX: 419 EQ: 456 TU: 423
February 2019 - EX: 537 EQ: 547 TU: 509
March 2019 - EX: 625 EQ: 555 TU: 579
April 2019 - EX: 640 EQ: 637 TU: 642

May 2020 - EX: 690 EQ: 688 TU: 700
Message 1 of 4
Regular Contributor

Re: Bankruptcy or work with what we’ve got?

Yeah its BK time.  You will wonder (as most do), why you waited so long.  Its the same story over and over.  Doubt and fear, followed by anxiety.  Then once you get the discharge, the relief sets in and you reflect on why you waited so long to file.  


There is no honor in repaying your debts to major corporations.  If the general public knew how many times major companies filed BK in some form or another, there would be riots.  Some businesses file over and over as the law allows.  


You are not going to miss Navy either.  They have tightened their guidlines over the last year and are no longer as (BK) friendly as they once were.  Penfed is another one that has tightened up the guidlines for credit.  Especially unsecured.  You are no better going with them now, as if you were going with BOA or Chase.  


I say file and get your new start.  Kiss Navy goodbye though.  They are never going to lend you a penny going forward until you pay them back in full, even if you get a discharge for those debts.

Message 2 of 4
Frequent Contributor

Re: Bankruptcy or work with what we’ve got?

I agree with @CreditNewguy ... with two caveats:


1) You listed how much you owe ($67k if my math is right), but not how much you make. In other words, it is probably time to file bankruptcy, but before making that decision, I would hope you reviewed your expenses and sought ways to reduce costs. It's not clear to me what amount is left over that could go toward debt repayment. If excessive spending had anything to do with the debts (I didn't overlook the situation with job loss, etc.) then it would be good to address this before filing bankruptcy. 

2) I would also focus on your secured debt at this point. How much are the cars worth vs. what you owe. If you file, you will need to decide what to do with the cars. Your options likely include abandon, redemption, reaffirmation (usually a bad idea), and retain/pay.


As far as Navy Federal goes, if you cause Navy Federal a loss (get a card charged-off in bankruptcy), you will not be approved for secured or unsecured credit until that loss(es) is repaid. 


Message 3 of 4
Valued Contributor

Re: Bankruptcy or work with what we’ve got?

You are probably looking at a chapter 13, I just got finished with one. Hard couple of years but it will all clear up and feel good.

Message 4 of 4
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.