Should I consider BK?

[sprks7979]

First and foremost, these forums are awesome. I do know that only I can decide if BK is the right choice but I do appreciate any opinions on the matter. 

30k in medical debt. Thats it, no cc debt, although I do have a Cap1 cc and am an authorized user on a few other cards. With medical being my only debt, is it smart to go the nuclear option of BK? I have tried to do some PFD but they have been a no go. The debts are validated, and I do owe them. If I pay the collections, will that be any better than filing for BK? I know its possible to rebuild after BK but is it easier to rebuild simply from paying the debts. SOL is not even close. I would hate to spend 30k over the course of a few years and then be just as bad off as if I filed, only years later. Any insight would be amazing, and appreciated.

Thanks. 

P.S. If I do file, and dont burn any CC companies, would getting cc at some major players (chase, citi and such) be feasable, or not simply because I filed?

[sarge12]

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@sprks7979 wrote:

First and foremost, these forums are awesome. I do know that only I can decide if BK is the right choice but I do appreciate any opinions on the matter. 

30k in medical debt. Thats it, no cc debt, although I do have a Cap1 cc and am an authorized user on a few other cards. With medical being my only debt, is it smart to go the nuclear option of BK? I have tried to do some PFD but they have been a no go. The debts are validated, and I do owe them. If I pay the collections, will that be any better than filing for BK? I know its possible to rebuild after BK but is it easier to rebuild simply from paying the debts. SOL is not even close. I would hate to spend 30k over the course of a few years and then be just as bad off as if I filed, only years later. Any insight would be amazing, and appreciated.

Thanks. 

P.S. If I do file, and dont burn any CC companies, would getting cc at some major players (chase, citi and such) be feasable, or not simply because I filed?

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The newest fico scoring models treat medical collections differently than any other debt collection, and its inclusion on the credit report has less impact on the score. Even on the currently most used fico08, one collection account is a lot less harmful than BK, and I do not really hear much about medical debt collectors being very successful in obtaining a judgement in a lawsuit. It is your decision, but I would strongly recommend that you not declare BK if your only bad debt is medical. I hope others with more knowledge will chime in.

[Anonymous]

@sprks7979

Thanks for having the courage to post. You've taken a really big step.

Yes, you are right: only you can decide if bankruptcy is for you.

But at the end of the day, it doesn't matter if it's medical debt,

auto debt, or credit card debt. If you have truly exhausted all of your

options to repay your debts 100 cents on the dollar, and you now

realize that there is absolutely nothing else you can do, then Yes.

BK is the way to go. At that point, you'll have to decide on whether

to go BK7 or BK13. In my case, I went with BK13. I have 2 in plan

auto loans that are now repaid, but I would have lost the cars had I

filed BK7. So your decision is just like mine: individual and unique to you.

Just do what's best for you, and try not to beat yourself up more than

you already have. If you do elect for a BK, it's a season in time, not a

death sentence. So keep your chin up, your eyes clear, and move forward.

P.S. Numerous myFICO members with Capital One credit cards have posted

that Cap One is very BK and thin file friendly (3 or fewer tradelines in credit

reports). So if you do have a Cap One CC that won't be included in BK,

then take very good care of it. It will be a lifesaver to your credit over time.

[Anonymous]

Can you not send in letters for forgiveness? I've researched this when I had a spouse die. He racked up over 100k in debt. I sent them all letters. He had no insurance too.

[CH-7-Mission-Accomplished]

How much is your income?   30K is a lot of debt if you make 30K but not so much if you make 150K.   With collections you should be able to settle for 1/3 so that would cost you 10K out of pocket.   I wouldn't pay a dime more than that and start at 20% offer.

Also do you have health insurance now?    If not you should make sure you have at least some kind of Obamacare catastrophic policy -- that limits your liablity.   If you don't have health insurance and you get into some horrible auto accident with a 250K bill (even if the accident was not your fault) you cant discharge the new debt for seven more years.   So bankruptcy is a one time get out of jail free card and shouldn't be squandered.

Do inquire about "charity care" with the hospital bookkeeping department if this was for a hospital stay.   You have nothing to lose.

Also if you do file for BK, be sure to close that Cap 1 card before filing.   I did this and it saved me from having an included in bankruptcy account with them -- so I was able to get right back in without having to wait.   If you have an open account at the time of filing, even if it has a zero balance, they may claim it's included in bankruptcy and make that notation on your credit report and their internal files.