HELP - High Utilization of debt to credit line (UTL)..options?

[Anonymous]

So, I have a question for whoever may have insight...!

I'm been searching for answer to this question:

How long will certain actions effect my credit score?  Thus, how long will it take to rebuild...I've heard 2 yrs (after bankruptcy, the "walk away from it all," which DOES NOT make any sense), 3 yrs (after completing credit arbitration), & I've heard 7-10 yrs for all of these as well!   OMG...I don't know who to believe!

I finally found this site...!   It seems that maybe many of you have gone through what I may need to go thru. 

I've NEVER been late on any account in my life (I have 10 accounts, I know a lot!) & I've thankfully, been able to pay them off 2 different times in my life as well!  I credit score was 729 four yrs ago.  Now my utilization of debt to credit line is very high, thus huring my score.  Also, due to economy & others not able to pay their bills to me...my income is suffering EXTREMELY!  I've been taking out of my IRA (I know, HORRIBLE! I don't have much left now), I'm down-sizing from a large beautiful home w/open space, mtn views to...a 1 bdrm cottage!  I'm REALLY trying to do the right thing...but soon, I'm looking at not being able to make all my bills next month...& I'm TERRIFIED!   I don't want to file bankruptcy!  

I'm considering settling some accounts...but I can't get a concrete answer on how that will effect my credit & how long it will be bad..as I noted above?   

I've gotten several answers from an array of folks regarding what I should do:

1) settle/abitrate w/creditors -whlie still paying these off as fast as I can (3 yrs or possibly less) 

2) Do it on my own, late payments on come accounts (which will happen for a long time, much longer than 5 yrs), while paying off certains accounts SLOWLY! (Meanwhile, I expect these accounts will close & even go into collections!)

3) or bankruptcy

***** All are HORRIBLE....I'm totally freakin' out, but I'm looking at my credit suffering tremendously regardless, so I want to the best thing & pay what I can! *****    

4) win the lotto!!!  (never happening, right?)

So, could I get your comments/advice after those of you who have done this credit abitration (settling) credit card debt?

Really, ANY input on any option (even something I've not learned of or listed here)...I will greatly appreciate!

Thanks...

"Super scared & Nail-biting"

[DI]

---

@Anonymous wrote:

Hi there all...

So, I have a question for whoever may have insight...!

I'm been searching for answer to this question:

How long will certain actions effect my credit score?  Thus, how long will it take to rebuild...I've heard 2 yrs (after bankruptcy, the "walk away from it all," which DOES NOT make any sense), 3 yrs (after completing credit arbitration), & I've heard 7-10 yrs for all of these as well!   OMG...I don't know who to believe!

I finally found this site...!   It seems that maybe many of you have gone through what I may need to go thru. 

I've NEVER been late on any account in my life (I have 10 accounts, I know a lot!) & I've thankfully, been able to pay them off 2 different times in my life as well!  I credit score was 729 four yrs ago.  Now my utilization of debt to credit line is very high, thus huring my score.  Also, due to economy & others not able to pay their bills to me...my income is suffering EXTREMELY!  I've been taking out of my IRA (I know, HORRIBLE! I don't have much left now), I'm down-sizing from a large beautiful home w/open space, mtn views to...a 1 bdrm cottage!  I'm REALLY trying to do the right thing...but soon, I'm looking at not being able to make all my bills next month...& I'm TERRIFIED!   I don't want to file bankruptcy!  

I'm considering settling some accounts...but I can't get a concrete answer on how that will effect my credit & how long it will be bad..as I noted above?   

I've gotten several answers from an array of folks regarding what I should do:

1) settle/abitrate w/creditors -whlie still paying these off as fast as I can (3 yrs or possibly less) 

2) Do it on my own, late payments on come accounts (which will happen for a long time, much longer than 5 yrs), while paying off certains accounts SLOWLY! (Meanwhile, I expect these accounts will close & even go into collections!)

3) or bankruptcy

***** All are HORRIBLE....I'm totally freakin' out, but I'm looking at my credit suffering tremendously regardless, so I want to the best thing & pay what I can! *****    

4) win the lotto!!!  (never happening, right?)

So, could I get your comments/advice after those of you who have done this credit abitration (settling) credit card debt?

Really, ANY input on any option (even something I've not learned of or listed here)...I will greatly appreciate!

Thanks...

"Super scared & Nail-biting"

---

How much debt are you in ?   Are you current on all of your accounts?  If you're terrifed, super scared and biting your nails, BK may be your only way out if your debt is extremely high and little income. 

[Anonymous]

I suppose I'm super scared & all....because (thankfully )I've NEVER been int this situation before.   I've always paid my bills & ON TIME.  : )   But now...life has drastically changed.  : (

I'm looking @ $60,000 in debt...yes, I'm current on all my accounts & still never been late, BUT...I know the cash flow will not be adequate this next month, thus the following months as well.  I figure...I better get educated now on what looks like will happed to me.  And start addressing this HUGE problem now as well.  Right?   Currently, my income is ~ $65-60, 000.

AND...THANK you for responding to me!

[DI]

I think you can make it without filing BK if you downgrade your lifestyle.  You have a nice income.   Have a garage sale and start selling things you no longer need. 

[Anonymous]

Yes...I am.  I'm also downgrading from house to a 1 bdrm.  I feel BK is not an option for me...but the numbers are still not working for me.  I'd really like find an answer to my question.  How long does your credit score suffer if you're late on payments, or go to collections?  How long does it take to re-build, as I will have to do?

How about those who have done arbitrations?  How long does that clear up?

thanks...

[llecs]

Ditto. I'm certain you can get through this without a BK. Many of us have been there.

I'd do whatever it takes to increase your income (change jobs, add a second job, do some side business somewhere, etc.).

And I'd do whatever it takes to decrease your expenses (e.g. cancel your landline or cell, eliminate a car payment if applicable, down grade your cell plan, your insurance(s), temporarily cancel cable, put off some hobbies, cancel any travel plans temporarily, cancel anything that results in dues or subscription fees, tighten the budget by changing your eating habits, stop eating out, etc.)

Finally, I would reposition money to pay off debt. I'd suspend contributions to any 401(k) or IRA plans temporarily. I'd cash in any non-retirement accounts. If you got a tax refund, then I'd adjust your W-4 to get more money on your check and do the same for state if applicable. I'd sell an extra car if you have two. I'd sell off any stuff around the house you don't use or need and make eBay or Craigslist your friend.

I'd also cut up all of your CCs. I necessarily wouldn't cancel, but I wouldn't use them until debt free and if my habits didn't change to where I'd use them again, then I'd cancel them for good.

[DI]

---

@Anonymous wrote:

Yes...I am.  I'm also downgrading from house to a 1 bdrm.  I feel BK is not an option for me...but the numbers are still not working for me.  I'd really like find an answer to my question.  How long does your credit score suffer if you're late on payments, or go to collections?  How long does it take to re-build, as I will have to do?

How about those who have done arbitrations?  How long does that clear up?

thanks...

---

I don't have the answers to all of your questions, but I do know that late payments and collections affect your score until the day they no longer appear on one's credit report.  Regardless how old the late payments and collections become, they still have significant effect on one's credit.    If you can stay current on your oldest revolving account, that will help you recover a lot quicker if some of your accounts end up in collections.

So the bottom line is, keep your oldest revolving account open and free of blemishes.  Hopefully, the bank you have your oldest account with won't close your account if they see trouble with accounts you have with other banks.

[Anonymous]

Thank you for these suggestions!  I've been living this way already for last 2.5 yrs (no trips, eating smart cheap, cell, no landline, cable, etc) & now going to the 1 bdrm (this will be complete in ~2 mo's).   I'm hoping this will help too...but, still concerned that the cash flow in will continue to decline as it has!  Thus, I need to prepare for the worst. 

Do you know where I can learn how long my score will suffer w/the results I listed before?

thx 

[Anonymous]

What about going to a crappy apartment for a few years? Sell everything you don't absolutely need. It's just stuff. Then try snowballing your cards. Pay the minimums on all but one (starting with the highest interest rate or balance first), then move on to the next after that's paid off.

You haven't been late yet. There's so much you can do. Don't just throw in the towel. Fight for your credit. Otherwise it'll be years before your BK stops haunting you.

[DI]

---

@Anonymous wrote:

Thank you for these suggestions!  I've been living this way already for last 2.5 yrs (no trips, eating smart cheap, cell, no landline, cable, etc) & now going to the 1 bdrm (this will be complete in ~2 mo's).   I'm hoping this will help too...but, still concerned that the cash flow in will continue to decline as it has!  Thus, I need to prepare for the worst. 

Do you know where I can learn how long my score will suffer w/the results I listed before?

thx 

---

http://www.myfico.com/CreditEducation/