Question about debt & bankruptcy?
Hey everybody,
I’ll be 23 in a few months. I’ve already been married & we bought a house [but due to a pipe busting in the winter & causing a ton of mold & then five trees falling on the house in a wind storm that the insurance company did not want to fix], the home ended up going into foreclosure. The loan was not in my name, however my name was on the deed. I’m not married anymore & the last time I checked my credit, the house did not show up but, I think that was before it was actually foreclosed on.
He & I have two credit cards [probably 00 of debt total] that I have to pay half off of [so, about 00 right there.]
Then I have a Kohls & Macys card [about 0 total].
Then I have three other items that are not credit cards that come to about ,050.
Total, I have just a little under ,000 worth of debt which I know doesn’t seem like much but, after I deduct all my bills, I don’t have much money left. Things keep popping up left & right like medical expenses & tires for the car, etc & whenever I think I’m starting to get ahead, I end up even further in debt. I already have two jobs, I already save as much money as I can. Every bit of debt that I have has already gone to collection agencies so I can’t go online & pay on anything.
I’m just wondering if [since my credit is already horrible] I should just file for bankruptcy. If I did, would the foreclosure still show up [assuming that has affected my credit]? Would it be easier to rebuild my credit after bankruptcy or repair it by paying everything off? If bankruptcy is my best option, how long will it affect me? Will I be able to rent an apartment? What if a few years from now, I want to buy a house or condo? If bankruptcy is not my best option, is there any programs that aren’t scams that I could use to consolidate or something? Not sure if this makes a difference but, I do have a 2007 car that I bought brand new. I have three years left of payments & I’m current on it. I’m thinking about trading it in for a vehicle with AWD.
Serious answers only please. I’m trying to figure out what steps that will help me further myself faster. Thanks in advance.
Don’t file for bankruptcy!!! You don’t need to man. Your debt isn’t that bad at all. My wife and I had $23,000 in debt and we paid it off in 1 1/2 years. We were only working part time each and I was going to school full time. Bankruptcy is just a cop out. $5,000 in debt is nothing.
The best advice I can give you is to read Dave Ramsey’s book: The Total Money Makeover. It will give you a step by step plan on getting out of debt. You aren’t in that bad of a situation compared to many I have seen. I’ve seen people get out of MUCH worse situations.
Bankruptcy will affect you for the rest of your life. While it may fall off your credit report, you will be asked at most jobs if you have ever filed and that’s not good. You’ll be fine. Keep working hard.
Get some savings. I know it seems like a struggle but if you get $1000 in the bank as an emergency fund all these little things will stop popping up.
July 9th, 2010 at 4:36 pmIf you declare bankruptcy it will be reported for ten years (Chapter 7), seven years for Chapter 13.
The foreclosure is an item of public record, so that may stay on your credit report for ten years, also. However, if you were not on the loan, there is a chance it will not show up on your credit report. It depends on how the local jurisdiction reports foreclosure actions.
You will not be able to purchase a home for at least three years. You may also have trouble getting a job (most employers run credit checks), renting an apartment, and qualifying for cell phone contracts, utility services, etc.
An alternative to filing bankruptcy is to contact a community-based, nonprofit consumer credit counseling agency and ask to be set up on a debt management program. Stay away from debt reduction firms and debt consolidation firms. They charge huge upfront fees and you have no control over whether they pay your bills. Often, they do not.
A debt management program by itself does not impact your credit score. It will, however, prevent you from getting any new loans during the time you are actively in the debt management program (2 1/2 to 5 years).
You can locate a legitimate consumer credit counseling agency by contacting the National Foundation for Credit Counseling at 1-800-388-2227 or go to their site at http://www.nfcc.org.
Even if you do not do the debt management program, it will be helpful for you to ask advice of the credit counselors at a local consumer credit counseling agency. I have volunteered at our local consumer credit counseling agency for about ten years.
July 9th, 2010 at 4:36 pmhope this helps bankruptcy may help you they have options to pay good luck
July 9th, 2010 at 4:36 pmPersonally, I would file chapter 7. Your credit is destroyed and you are in debt. Use the situation to get out from underneath your debt and start building a future. Either way, it will take a loooong time to rebuild a worthy credit history and if you are going to have to suffer through it, might as well wipe out the debt in the process.
July 9th, 2010 at 4:36 pm