Would you file?

[ScotTheRoc]

Hi All,

I'm sure this question has been asked a thousand times. Let me give you some general info regarding my credit background.

I am in debt of approx. $23,000. $1900 of it is in student loans and the rest is in unsecured credit card debt. My credit scores are now in the 560s (as of a couple of years ago they were in the low 700s).

A couple of years ago I went through some problems, like many of us do, i.e. lost my job broke up with my girlfriend. At this time I went into a downword spiral and started making late payments and then no payments at all. Most of of my creditors have charged the debts off.

Most of these debts have been sold off to various collection agencies, and I receive calls all of the time (some of these guys are very creative). I also just received a couple of settlement offers (around 50% on one of my Discover Card accounts of $3900).

At any rate, I was going to file Chapter 7 pro se last year before the new laws took effect. I didn't do it because I thought (and possibly still do) that things were going to change for the better for me. So far they haven't gone as well as I had hoped for, but things are getting a little better. I also didn't file because I knew in my mind that I had created these debts and got myself into the situation I am in today. I feel as though it is my responsibility to get myself out of this mess and pay these debts off.

I undestand if I file Chapter 7 (with the assistance of an attorney) I can eliminate the credit card debts and start over. I will still be responsible for the student loans, but at $54 a month that is not a problem. In fact, I believe that because I have been making the montly payments my credit scores are as high as 568. So I file for bankruptcy and my scores drop a little more.

OK, so what if I don't file for bankrupcty and begin paying off my charged off debts? Will this increase my credit scores faster, or will this not really matter because they have been charged off already? Is $23,000 of debt really worth going bankrupt over? Or is it foolish paying on debts that have already been charged off?

I guess I am just trying to stay as positive as I can and find the best solution on getting myself out of a bad situation. I know I had a combination of bad luck and poor decisions, but this is debt that I created. I have to get myself out of it, one way or another.

I know of several obvious reasons of why I should file BK, but I would be curious to hear from anyone who thinks I should not file. Are there advantages to not filing and paying these debts slowly but surely on my own?

Thanks for taking the time to read, guys, and have a great weekend!

Scott

[Minnymouth]

The fact is you have already destroyed your credit.... so a bankruptcy is not really going to hurt you that much....
In fact, it will give you a "fresh start" in life - discharging everything but the student loans.

You will be able to file a Chapter 7 if you have no disposable income, otherwise you will be forced into a Chapter 13 repayment plan on the debts.

You can attempt to pay the debts yourself, but it will not help much on your credit report because they are already past due, charged off, and your credit is now "crap"....

Check out your options, make a decision...

Keep us posted what you decide to do.

[StewieGriffin42]

Well the way I look at it, the negative stuff will come off your credit report in 7 years, and MAYBE in 7 years you will have paid off all that debt (probably tons of it in interest), or you can wipe out the debt NOW and start fresh...

[SinkingFast]

First, DO NOT make any payments to any Creditors until you do a little research. You need to know your State's Statute of Limitations on CC debt. Some State's I've seen are 4 years. That would be 4 years from the last time you made a payment on the account. You need to know the SOL first then figure out where you are timewise there.

If you're close to reaching the SOL, I personally don't know if I would file. Your wages haven't been garnished at this point. Do you have any assets they can sue and place a lien against?? If not, and your close to being home free legally, there would be no sense to file. With a good track record of timely payments and some time, you could rebuild your credit without BK being on your Credit History for 10 years.

Plus, you can address the old credit issues with the Credit Bureaus directly yourself. Have them make the appropriate corrections on you Credit Reports as needed.

I may be totally wrong here. Maybe someone else will chime in and correct me if needed.

[cana]

Florida Debt Statue of Limitation is 4 years. Another 2 years ...

Expect to be sued before that.

If they were not suing me I would have been able to negotiate everything, but they don't wait long enough.