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A series of late CC payments and 3-4 credit card charge offs? Or a bankruptcy?
How severe are the lates? 30, 60, 90, or 120 days?
Are the charge-offs paid or unpaid?
How old are the lates and charge-offs?
Are you considering filing for BK instead of dealing with the lates and charge-offs?
Yes I recently became unemployed and am looking into the possibility of declaring bankruptcy. My other option is to negotiate charge offs with my credit cards. Or I could sign up with a debt management service, but I'm not sure I'll have the income 6 months from now to make the necessary payments.
In FICO scoring, "recency" reigns supreme. So, any major baddie (collection, charge-off, BK, judgment, 90-day-late or worse, foreclosure, etc.) that is less than two years usually tanks FICO scores. That said, from a FICO scoring standpoint, a BK "might" or "might not" tank your scores a bit more.
A debt management company is the worst thing.
No need to pay someone else to do what you can do yourself for free. Also, there are a ton of horror stories about them making your credit worse and perpetuating lates forever.
@mauve wrote:A debt management company is the worst thing.
No need to pay someone else to do what you can do yourself for free. Also, there are a ton of horror stories about them making your credit worse and perpetuating lates forever.
I have to respectfully disagree. One of our long time members marty56 has written extensively how a DMP helped him. DMP's can and do help folks without wrecking their credit. Here are some discussions about DMP's.
From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774
"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".
You are disagreeing with me everywhere today, sir!
OK, I hadn't seen a counterexample yet. Perhaps "be very suspicious of debt management companies" is a better statement.