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When does BK make sense instead of just paying off?

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When does BK make sense instead of just paying off?

So I'm at a crossroads and not sure what to do.

 

I owe collectively between everything, probably less than 25k and that includes 7k student debt, 8k repo & probably 10k for other various old debt which includes judgements.

 

I know I can't BK the student loans, so the rest is my concern.  I'm not paying back 8k for a repo and I'll be damned if I'm going to pay more thank 2k to clear that up.

 

But other overall stuff like judgements and various old old credit cards.  By the time I would pay all of this off it would be a few years anyways and could be halfway through the 8 year BK cycle clearing itself up and well onto rebuilding/reestablishing my credit that entire time and putting that money towards paying off the student loans.

 

I am not planning on buying a house any time soon and I did file BK before about 10 years ago.  My credit is trash and has been for years, it's the low 400's so I have lived without it this entire time, but I am looking for finally clean it up once & for all.

 

Thoughts?

Starting Equifax Score 5/12/14: 585
Starting Transunion Score 5/12/14: 553
Starting Experian Score 5/12/14: 544
Goal Score: 680-700
Message 1 of 6
5 REPLIES 5
Regular Contributor

Re: When does BK make sense instead of just paying off?

I think it would depend on how old your debts are - if they're close to falling off then I would guess there's no need to add a BK if you can wait it out.


Maybe in the meantime, work at paying off recent debts and also create a plan to aggressively start saving and improving your credit moving forward - adding any positive tradelines you can and keeping them positive.

 

My two cents.

Personal:| Business:
Filed BK7: 3/24/17 Discharged: 7/3/2017 (Starting scores | EQ: 493 | TU: 496 | EX: 441)
7/17/17 - EQ: 563 | TU: 549 | EX: 570
8/08/17 - EQ: 589 | TU: 630(!) | EX: 585
3/09/18 - EQ: 659 | TU: 680 | EX: 665
3/20/18 - EQ: 662 | TU: 692 | EX: 670
Message 2 of 6
Valued Member

Re: When does BK make sense instead of just paying off?

I agree. Since the debts are close to falling off imho I wouldnt file bk just to have that public record for the next 10 years as it has been almost the same amount of time you've already been dealing with them. 

 

I agree with SportsMom77 again, start by tackling your newest debts and paying those off and then start rebuilding by creating positive tradelines and getting an emergency fund started to prevent anything like this happening ever again. As you see in SportsMom's siggy CreditOne is a decent lender to get back to rebuilding- I'll let you read more posts on CreditOne but they will give you an oppertunity to begin creating positive tradelines and getting back on the right track. 

Chapter 7 Filed 1/19/2018
Chapter 7 Discharge 4/30/2018
Starting FICO: 582EQ,528TU,532EX
Current FICO Scores: 652EQ,640TU,640EX
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Message 3 of 6

Re: When does BK make sense instead of just paying off?

The debts might be getting old, but I don't think they're getting ready to drop off, I continue to receive mailings on various debts, so when this happens, it resets the drop off clock correct?

 

If I have my credit pulled to get a full overview, I should be able to tell which ones will drop off soon right?

 

Also, once they drop off, there is no way for a debt collector to buy this old debt & revive it?  The major one I'm worried about is the 8k repo from almost 7 years ago.  I could swear my mother had a repo debt come after her 15-20 years later - I'm going to verify this with her.

 

Things like the judgement is hurting pretty good I'm sure, but with or without BK, these stay on my credit right?

Starting Equifax Score 5/12/14: 585
Starting Transunion Score 5/12/14: 553
Starting Experian Score 5/12/14: 544
Goal Score: 680-700
Message 4 of 6

Re: When does BK make sense instead of just paying off?

Does anyone have any input on my last post?

 

I didn't make much improvement in 2018, hoping to really tackle this in 2019.

 

I think the first step is to pull all 3 bureaus to really see what's still attached to my credit.  

 

If I use MyFico to pull all 3, I can post my 3 bureaus here so that someone with more experience than me can review and see what my best options are?

Starting Equifax Score 5/12/14: 585
Starting Transunion Score 5/12/14: 553
Starting Experian Score 5/12/14: 544
Goal Score: 680-700
Message 5 of 6
Senior Contributor

Re: When does BK make sense instead of just paying off?

Get your scores and list what debts and baddies there are in your reports. No one here will really say yes go file BK. We can help you figure out the best route to clean up your files. And go from there. BK is a personal decision.





My posts are JMHO. I DO NOT claim to be a FICO expert. Just sharing my experiences from rebuild to recovery after BK DC. My siggy is not to brag at all. Just to show fellow members what can be accomplished when you do it right and play the FICO Credit Game.
Message 6 of 6
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