To file or not to file??

[Anonymous]

I am trying to figure out what my best options are. Due to a previous relationship I have serious credit issues including 2 public records and approx 7 collection accounts. They are fairly new (most reported in the last 1-2 years) The highest debt is $1800 the lowest $400. I'm now a single mom of 4 and I pretty much have no hope of paying them off in full. Which is better for me credit wise, filing bankruptcy or having the debts sit on my CR potentially until they fall off?

[llecs]

I'd first figure out the age of those CAs. Even if they only reported within the past year, they could be beyond the statutes of limitiations by which to sue you. Other than reporting, they could be harmless. Even if you had the $$$ to PIF, they can still report after you pay them. And if you filed for BK, you'd still have the CAs reporting, the two judgments, and a new BK to boot.

Credit-wise, filing BK won't help your credit for those two PRs either. They've already reported and a BK won't remove it.

[Anonymous]

So filing BK won't remove the public records? I'm clueless at how to build good credit when there is so much negative. The negs prevent me from opening new accounts to even attempt esctablishing it. I'm so frustrated because I just don't know how to make this situation better!

[sewmuchdebt]

but llecs, won't the ca's keep getting worse? they'll report for a while, then sell to another ca & process starts all over again. not to mention all the inq's they are putting on your cr's. bk might not remove accts from report, (although i had 3 ca's deleted from mine) but they will have to show iib & show 0 bal. that goes for judgements also. bk also stops the harrassing phone calls & stops all letters.  wished i had filed sooner. might not have lost so much hair!

[llecs]

On the standpoint of your FICO score, if you have a bunch of CAs coming after you on debts beyond SOL, then filing for BK will do more harm (to you score) than good. Temporarily your score will drop if the CAs add inquiries, add new TLs, update, etc. Plus, as mentioned, the calls would come, letters, etc. However, if the financial bleeding had been stopped, and you are dealing with a mess that only occurred during a block of financial instability, then adding a BK will do more harm than good in the long run.

Let's say you have a bunch of OCs/COs that are 3-4 yrs old that resulted from a rough patch, AND you are past SOL, then within 3-4 yrs they will go away anyway. They can't sue you. They can't do anything but annoy you. Your CR won't look any more worse. If you file for BK, then that PR will remain for at least 7 yrs. Within 3-4 yrs you can have a clean CR vs. waiting 7 yrs. That's why I mentioned to the OP to make sure if the debts are past SOL.

And you can fight the baddies too. When I started, DW and I had about $20k in bad outstanding debt. We were careless and it was our fault. It was all past SOL and I knew they couldn't do anything to us. We opened up a second phone line for family and friends and turned off the ringer on the old line. We sent DVs to all the CAs and sent PFDs to all the OCs. Most all the CAs didn't verify and w/ the exception of 2, they all went away and never contacted us again. Most of the OCs deleted after we paid them and in time, everything but 2 baddies went away. Within 2 yrs of effort, our FICO scores shot from the low 500s to the high 600s/700s. We also haven't had any collection calls in months now, despite having over $10k in debt floating out there. If they call or write, then we'll respond.

Our goal was to boost our score as fast as possible and BK would have been an obstacle.

And I understand that YMMV.