Hello, I have a problem in that I received a charge-off on my credit report six months ago. I was unable to pay the defaulted interest rate after a late payment and was unsuccessful in renegotiating this with the creditor for over a year. It was charged off by their in-house collection department. I offered a payment plan they they did not want to accept in light of the interest charges every month. They felt it was futile. They charged it off and I am now getting collection calls. In addition at this time, I have heavy debt for the first time (28K) from job loss in 2003. My FICO score has dropped 120 points from the charge-off, and the heavy debt load. And lastly, I have lost my good interest rates everywhere. I am paying almost 600/mo in interest on credit cards. I am sad that one charge-off can hurt as badly as bankruptcy. I am teetering on just wiping it all out after 20 years of good credit. I'm worried I can't even do that because I have a new job and am just barely getting by in this scenario. Worried about wage garneshment and judgement. I am too entangled to see clearly through this. Does have anyone have an opinion on the best plan of action? I would like to avoid bankrupcty. I would appreciate any thoughts.
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If you are barely making ends meet, you might be a candidate for bankruptcy. You will certaintly want to explore your options before October 17, 2005 (that is when the new BK law takes effect).
If your credit is already shot, there really is no down side, credit wise, to filing Bk, and you will eventually have to deal with this debt, either by relentless collection activity and the inevitable law suit. Even if you end up in a chapter 13, that is still better than doing nothing.
What is your overal income to expense ratio, the expenses being your living expenses? -
Bankruptcy vs R9
Thanks for your response. I work as an independent contractor now and make 2100 to 2400/mo before taxes. I have also gotten a second part-time job which pays up to 1000/mo on a good month. My auto-pay expenses for bills, utilities, car, etc. are roughly 2400/mo. I also estimate about 875/mo in taxes, and will be also incurring self-employment tax for 2005. (I have not been paying these taxes so far, to hit my debt, and my better judgement says this will backfire before long). As far as my credit is concerned, I have become ineligible for 100% financing on a mortgage this last year. I am very self conscious after years of good credit. I want to muster the courage, do the best thing for my future and MOVE ON.Comment
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