Defaulting v. Filing Ch 7

[hnhlvr]

Just out of curiosity, when I was in my early 20s, I defaulted on some of my credit cards and then a few years later was able to have the discharged debt taken off my credit report and my FICO score went back up. I had no bankruptcy on my report AND I had paid on some credit cards, so I was able to keep working on my score.

My question is, what is the difference in how low my score will drop if I default and do not file ch. 7 OR defaulting and then filing ch. 7?

I cannot recall what my score was back after I defaulted.

Thanks.

Oh, and this is partly based on Citicards raising the interest rate on one of my balance transfers to 38.9%.

[AngelinaCatHub]

Well, before you do any defaulting, have you called and addressed this with them? Perhaps you can work this out or do another CC transfer to all those zero to start cards? Hate to see you bk over this. How much dollars? 'Hub

[hnhlvr]

There is quite a bit total and I owe on more than just Citicards. It's the raise to the higher interest rate that's just put me over the edge and emphasized that I'll NEVER get all my cards paid off especially if any of my other CC companies follow suite.

[epiphany]

Just out of curiosity, when I was in my early 20s, I defaulted on some of my credit cards and then a few years later was able to have the discharged debt taken off my credit report and my FICO score went back up. I had no bankruptcy on my report AND I had paid on some credit cards, so I was able to keep working on my score.

My question is, what is the difference in how low my score will drop if I default and do not file ch. 7 OR defaulting and then filing ch. 7?

I cannot recall what my score was back after I defaulted.

Thanks.

Oh, and this is partly based on Citicards raising the interest rate on one of my balance transfers to 38.9%.

I don't think there is much of a difference between the default and the bk as far as the score is concerned. They'll both last about the same amount of time on your credit report and I have read here that it is actually better to have the BK on there. Your score will start to rise after your BK is discharged while a default can affect it much longer.

If you cannot pay your bills and are truly considering BK, it would be wiser to not worry so much about the scores for now, and to focus on getting yourself into a position where you can actually afford your expenses.

Plus if you default and do nothing else, you could very well be sued, have your wages garnished, etc...sounds like you got lucky last time.

Good luck,

ep

[lrprn]

Right now the last thing you should be worried about is your credit score.

You need to determine if you can afford to pay off the debt you have right now within a reasonable time frame (say five years) if you stop charging right now. Can you?

If you can't live without using your credit cards to make up shortfalls each month, then you only have two choices - either make more money or spend less (probably a lot less). Can you do either of these and be able to pay off all of your current debt? If you can't, then it's time to consider bankruptcy.

Bankruptcy is often only part of the cure. If you get rid of all your unsecured debt but still can't pay your bills, then you have more hard work to figure out how to bring in more income right away after you file.

Your credit score will recover over a year or two after filing. By then you'll be getting offers almost as good as if you never filed, even with the bk on your credit reports. Lenders lend to make money, and they know you can't file Ch 7 again for 8 years. Pretty good guarantee of payment in full in their eyes.