Settle or wait it out or file Ch. 7

[Anonymous]

Hello everyone,

For the last year or so I have been going back and forth about settling my CC debt, waiting out the SOL, or just filing Ch. 7.    I read all 37 pages of the 0 - 700 after Bankruptcy thread, and it really got me excited about just "getting it over with" and filing.  However, I just did some math, and my total accounts (either held by OC or CA) are about 11k.  

I have about 5k still with OC's and about 5K with CA's.   (It doesn't appear as if anyone is double reporting, so I think it's about fair of 11k in debt).  All of my accounts went delinquent in Dec. 2010 (give or take a few months).   I'm in Washington, so a 6 year SOL.   The CC's I had were HSBC, Cap1, Citi, and GE.  

I'm looking at buying a house in the next couple years (around 2016/2017) and these tradelines will fall of my CR around then, but then I'll be at No credit, so I'll have to do a couple years of rebuilding (If I wait out the SOL/drop off).  

A bankruptcy will affect me for 10 years, but I qualify for Ch. 7, and 2 - 3 years after filing, I'd be able to at least get an FHA backed mortgage or do a USDA guaranteed loan.  

I have little to none assets, as I've done a decent job living within my means for the last 3 years (sold my expensive car with payments for a little 2k truck awhile ago, no high end anything, I live like any other person who doesn't have CC debt and makes 28k a year, so my assets with be exempt in filing).  

I have the money to pay an attorney for filing Ch. 7, but really, would it be smarter to save up a little more and settle all my accounts?  Would doing this allow me to rebuild/repair my credit in a 3 year timeframe?

A year ago, I was totally in the "I'll just wait out the SOL" boat, but A) I realized the SOL in Wa is 6 years, not 3 and B) After 6 years, I'll still probably be getting calls/mail from debt buyers.  

Whew, that was long, but to sum it up, 11k in CC debt.   In a couple months I could probably have together around 3 - 4k, so would HAVE to settle (not PIF), or just file Ch.7 and begin rebuilding?

Thank you so much.   

[eagle2013]

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@Anonymous wrote:

Hello everyone,

For the last year or so I have been going back and forth about settling my CC debt, waiting out the SOL, or just filing Ch. 7.    I read all 37 pages of the 0 - 700 after Bankruptcy thread, and it really got me excited about just "getting it over with" and filing.  However, I just did some math, and my total accounts (either held by OC or CA) are about 11k.  

I have about 5k still with OC's and about 5K with CA's.   (It doesn't appear as if anyone is double reporting, so I think it's about fair of 11k in debt).  All of my accounts went delinquent in Dec. 2010 (give or take a few months).   I'm in Washington, so a 6 year SOL.   The CC's I had were HSBC, Cap1, Citi, and GE.  

I'm looking at buying a house in the next couple years (around 2016/2017) and these tradelines will fall of my CR around then, but then I'll be at No credit, so I'll have to do a couple years of rebuilding (If I wait out the SOL/drop off).  

A bankruptcy will affect me for 10 years, but I qualify for Ch. 7, and 2 - 3 years after filing, I'd be able to at least get an FHA backed mortgage or do a USDA guaranteed loan.  

I have little to none assets, as I've done a decent job living within my means for the last 3 years (sold my expensive car with payments for a little 2k truck awhile ago, no high end anything, I live like any other person who doesn't have CC debt and makes 28k a year, so my assets with be exempt in filing).  

I have the money to pay an attorney for filing Ch. 7, but really, would it be smarter to save up a little more and settle all my accounts?  Would doing this allow me to rebuild/repair my credit in a 3 year timeframe?

A year ago, I was totally in the "I'll just wait out the SOL" boat, but A) I realized the SOL in Wa is 6 years, not 3 and B) After 6 years, I'll still probably be getting calls/mail from debt buyers.  

Whew, that was long, but to sum it up, 11k in CC debt.   In a couple months I could probably have together around 3 - 4k, so would HAVE to settle (not PIF), or just file Ch.7 and begin rebuilding?

Thank you so much.   

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My first piece of advice is to stay away from the bankruptcy thread. Bankruptcy is far from a "quick fix". It is truly a last resort option when the burden of your debt greatly exceeds your ability to financially manage life's necessities.  Under no circumstances would I, or anyone here (hopefully) recommend filing bankruptcy for $11k in CC debt. NEVER NEVER NEVER. Not even for twice that much. If you have the capacity to get 3-4k in a few months and employed, it is absolutely in your best interest to DV the collections (if you haven't already) and try to settle your OC accounts to 50%. You'll be happy you did.

[gdale6]

As already stated I would not be going the BK route for 11K in debt. I would however lay low until the SOL passes then come out and start settling your accounts for less than owed. While you may be able to get less than owed still inside the SOL you will run the risk of a lawsuit for the full amount + costs. The only thing I would do pre-SOL expiration is to open a secured card, SDFCU is a good place to start. You will also want to be careful of obtaining too many new accounts before the SOL runs out as there is a Collection Score that would tip off the CAs to your new found credit and ability to pay. There are lots of things to consider. Good luck

[Anonymous]

Thanks for the replies.   My biggest concern right now is will settling them for less than full (and therefore assume they won't delete the neg tradelines), allow me to repair my credit by 2017?

I can see now that Bankruptcy would be an awful decision that shouldn't be made in my situation.  

Back to the drawing boards I go, so I can tackle the debt on my own.   

[wop01]

I'm in a similar boat with you. I went delinquent 5 years ago on $30k of CC debt and am now wanting to save for a house by 16/17, which is why I recently joined. I'm curious to see how the seasoned members answer but I've chosen to wait for them to drop from my credit report. I acquired a CC with an annual fee and some soft pull retailer cards using "the shopping cart trick" to have somewhat of a credit history after the "baddies" have dropped from my report. The way I see it, I'd rather have the extra thousands of dollars to put down on a house then using the funds to settle.

Maybe settling will give you a better score, which in turn gives you a better interest rate, which in turn saves you money in the long run on your house. Personally, I don't make the kind of money that allows me to live "in the long run" so on a month to month basis I'll take the extra thousands in my pocket and refinance my theoretical house when I'm where I need to be.

Plus when your cell is always ringing with creditor calls it makes you look really popular Actually though, I haven't received a collection call in like a year so apparently they do give up at some point.