Question Should I file Bankruptcy?

[WStuber21]

I live in Kentucky, and I am 23 years old. I have messed up and dug myself in a financial hole. Well I haven't paid on any credit card bills or my one personal loan in over two years. All accounts are closed, and they are show $0 except a few of them. Two accounts were SOLD to collections, the rest were charged off as bad credit. The personal loan account was closed and it says Refinanced, which I don"t know why it has nothing else about it on there. So the main thing showing "bad marks" are the collection debts. I was told you could dispute those with the reasoning being "contract was cancelled" then write no contract in dispute comments.

I would just like to start to fix my credit, and I'm not sure what the best approach would be. This is my first time posting to any forum, ever. So please keep that in mind.

[zelkin]

Hi, this is a challenging question, and I am sorry to hear this, but I am so thankful you are young, so you have plenty of time to dig yourself out. I'd personally recommend doing some sort of [debt relief calculator] (this is a free one) because it allows you to compare all the different options such as Chapter 7 bankruptcy, Chapter 13 bankruptcy, debt payoff planning, debt management, and debt settlement, so you get a sense of the cost of each of the options and the pros and cons.

I really hope to see debt freedom in your future soon!

[justbroke]

WStuber21 first, Welcome to BKForum!

As written above you could try debt settlement if the amounts are low and you're actually able to keep with plans. You must keep in mind that most debt settlement plans fail and you end up in bankruptcy. The question for you, since you're young and you haven't listed the total amount of debt, is that it may be too early to file a bankruptcy. I mean, by early, that you don't have a lot of debt and bankruptcy is the nuclear option.

Whether or not disputing will work is too specific to the debt and collection agency. Most collection agencies want money so even talking to them could extend the statute of limitations and reset the fall-off date for your credit report. That could, if the date is reset, impact your score as it would re-age the bad accounts.

Again, a lot depends on just how much you're talking relative to your income. When I was young and dumb, I never resorted to bankruptcy... just diligently settled and/or avoided lawsuits. I don't know if either is a good option, but bankruptcy isn't always the answer.