Hello, I am desperately seeking advice on what to do. I have 8 credit cards, totaling $25,000. They are all behind 4 months now, the late/over limit fees adding on each month. I have no job. I do not own a home. I have a car worth $3,000. My credit score is 530. My question is do I settle out my higher cards, and pay on the smaller ones? Some of my smaller cards are $1,500, $2,500. I can't touch the bigger ones. Do I just declare Chapter 7 Bankruptcy and start fresh? I have no income or assets other than my car so I may be able to do a Chapter 7. I have no money saved or anything to garnish. Bottom-line is which would be BETTER for my Credit Score to improve the quickest? I'm not sure how settling my higher cards out (eventually) and paying the smaller ones would work, if that would even improve my score any or not. Any input would be helpful. -Sabrina (31, female)
How likely is it that your situation is going to improve eventually? If the creditors get judgments, they can't collect for now because you don't have anything they can take. But those judgments won't go away. If you ever get a job, they are likely to show up and garnish your wages. IMHO, increasing your credit score should be the least of your worries right now. You need to deal with these bills. If I was in your situation, I would seriously consider the Ch7.
If you have nothing and don't expect to have anything shortly or be able to negotiate payment, then yes it may be wisest to see a bankruptcy lawyer. Many times bankruptcy helps a person if there is no other alternative and this may be the case with you. Thing is as I have seen it in the past with friends and family, they get their clean slate and start all over with their bad credit habits.You're *ID* says it all STOP SHOPPING ; ) You need to learn how not to spend more than you can pay back,when they going gets tough. BTW why don't you work? Ill health? Good luck Woofer
You could probably qualify for a Chapter 7. However, you need to see a lawyer to determine your eligibility. But Woofer makes a good point. If you get discharged in bankruptcy, you can't just go out and start running up your cards again. You need to first learn to live within your means. This may mean no cable TV, no eating out, no going to the movies, anything else you can think of to cut. And definitely no more buying anything just because you want it.
I have nothing against bankruptcy, but chose not to do it despite I had high 6 figure debt. I never was much of a credit hog, but some of us can get into problems even though we were always a *thrifty Yankee* I think the reason I got to maneuver all my debts *almost* was the fact that I was ALWAYS someone that didn't buy things I couldn't afford and I have always hated paying interest on purchase. I'm still like this now, that is why this last darn problem of mine is really bugging me so As for friends and family that have screwed up more than once, I think if you file bankruptcy they should make you take a course in credit and how NOT to get back into debt. Anyway for me, you never have security if you live on credit. A good thing to live by IMO. Woofer
Hi Woofer, Thanks for your response. I have a college degree. I have been looking for work for 8+ months now. I'm currently actively in temp agencies. It gets rough when you even miss one payment, and I was also very close to my credit limits at the time which only adds other fees. Soon, you're buried and I'm just looking into options on what would be best to move on with my life. I had my tonsils out last year, and had to take off a couple of months, it was very painful as I wished I'd had them out when I was younger. One tonsil was very large and it took a long time for that to heal once it was cut out. Getting back into the job market, and getting paid OVER $7 an hour is proving to be more challenging than I'd anticipated, this is true. I don't feel very good about bankruptcy, never have really, but if it's a fresh start, with my credit score already tanked, I'm leaning towards it at this time. As for my shopping habits, I'm slowly learning how to use cash again. The abuse of cards comes with not only using cash for blowing on shopping but for basic living. It's the biggest no no and I've always known that. Putting gas, food, even paying other bills with your credit cards is also what helped to snowball the downfall. I'm tired of the collector calls, and yes I know that I owe them but this would be my first and last bankruptcy. Everyone always says that I'm sure. Needless to say it's personally just not worth it to me to deal with the bs everyday and better imo to just wipe the slate clean and take the hit. As for getting any cards again, I would get one and begin to rebuild my credit. I've read alot on this, and personally it's been devastating to realize you have to admit defeat, and admit that you're not a responsible person. I'm just a realist and this is the now, and what I can do in the now and for the future and above all else, move on. I've been paying on these cards for several years, maybe even 8-10 years now. I didn't just get them all and charge them up and run to declare bankruptcy. The thing that really hurt is when the cards raised up all their minimum payments to (help you) supposedly. Yes, that would be helpful if you could afford to pay that. I was maintaining a credit score of 700 by paying on all 8 cards, minimum payments. They raise the minimum payment to $300+ and you're s.o.l. I don't have any sympathy for the credit card companies. They will rape you until you bleed and I wish I had never owned mored than one, keeping it below $1,000. So yes, I have a level head on my shoulders and I'm not some shopcrazy fool, as my name may have suggested to many of you. I used that in a sarcastic sense, afterall without a sense of humor about all this, I'd be sitting in a corner crying all night...and life's too short for that. =-)~
Look at many people have been in your position. Nothing to be ashamed of.It happens. What you do AFTER bankruptcy is what it is all about. : ) Why not tell us what you owe and to whom. Tell us who is calling. We can have the calling STOPPED. You should go see a lawyer to advise you. I am not a lawyer, and form what you have said you have NOTHING, correct? So you either can ride it out... Hoping they will not sue you and get a judgement, or you can try to negotiate, or you can file bankruptcy. I think the latter may be a good option for you. Woofer
Thanks for your insight. As to who and what I owe, here's the line-up: BOA 7,000 Sears 5,400 Juniper 4,400 Capital One 2,700 Citibank 2,500 HSBC 1,700 Chase 1,300 Best Buy 500 Why so many cards? I was transferring balances for a while....for better interest rates, trying to get things paid down but the transfer runs out and you're back where you started again. The most harassing has been Chase from India, guys calling and I can't even understand them. Sears has been the most cooperative surprisingly offering a debt settlement offer which I wish I could accept but I did not have the funds by the date they wanted them by. (they gave me one weeks notice) so to any of you that do debt settlment, the funds must be there to be able to do this. Yes, all I own is a car worth $3,000 if that, it has an antifreeze leak, timing chain needs done, and I doubt anyone would buy it because of that. I think I will make an appointment with a lawyer this week to see what my options are.
From your list, I think talking to an attorney is a good idea. B of A and Citi at least pull the trigger for a lawsuit rather quickly. Sears is Citibank, so who knows.
Save the BK Option until the very last second... Your credit's already blown, and BK would not really clean your slate like the BK laws intended it to (google an article called "prisoners of debt" to learn the real scoop). IMHO, hold off on doing it unless and until something miserable is happening that you need to put a stop to ... a wage garnishment you can't knock down to nearly nothing using exemptions, or some other calamity ... even if they seize a $3k car (which likely they won't 'cause it isn't worth it to them), it might make better sense to just go out and get another car. Be careful not to bank locally (pick a small bank in any other state). Don't apply for any new credit until SOL (for suing, not reporting) passes on these accounts. Then you can start rebuilding. Remember, BK can't be done again for 8 years and medical calamities can happen anytime. The BK card won't help you if you've played it prematurely. Try riding this situation out for a while. Learn the FCRA and FDCPA ... you may actually make money on some CAs and JDBs rather than paying them. And in so doing, you'll be doing good and helping others ... keeping 'em honest and punishing their misdeeds. There are people for whom BK at an early juncture makes sense. These are essentially healthy people with some assets to protect and who have had a major financial hit (business-wise or medical) that is a one-time, one-off and they've never missed a payment in their lives ... those folks can be 700+ FICO scores on the day they get their BK discharge. Early BK is a boon to them. For others, waiting as long as possible makes more sense. Wait long enough, and you may never need to use it at all...
Y'know, when a dozen cats realize they're all running at the same cat door, it's likelier they'll all disperse rather than any of them sticking with the plan and making it through. In other words, the BK score is likely so in the red that nobody is going to sue unless and until it improves.
Flacorps makes some good points here. Probably not much reason to file for BK unless someone is not just nipping at your heels, but about to bite you someplace a lot higher. You don't have anything to take, so what are they going to do? You can file at any time. So why not hold off for a while. Flacorps, I love some of your analogies!!
Just wanted to thank everyone so much for their thoughts. I really have no one to talk to about this and I appreciate your responses. I'm reading everyone's entries and it always takes me a while to make any sort of decision especially one so life-changing. I like to know as much as I can before coming to any sort of decision so this is nice to be able to read over different viewpoints. I'm certainly not a person to give up about anything let alone financial hardships. Some of the terms Flacorps was using, FCRA and FDCPA, I'm sorry but what are these? -Sabrina
Google and Wikipedia are your friends. This forum is for people who will learn on their own and help themselves as well, not for spoon-feeding.
Sabrina As I wrote I did not file bankruptcy and waited it out until I was sued. THEN because I have read and read and read and have had a LOT Of help, I got about 75 percent of my debts dismissed with prejudice and like flacorps wrote, you may make some money back. I did ; ) The only thing is unless you are gutsy it is hard to go up against the lawyers and the court system, so you may want to hire a lawyer IF you get sued. Now here is where keeping a record OF everything is a very good thing. Write down the day and time and phone number of the caller, plus a name if they leave it. If you decide to demand validation, keep a copy of your letters and send EVERYTHING CRRR. I believe the MAJOR reason I have won and gotten MORE than I had to pay out is because I kept such good records. If you have the stamina to wait it out and be diligent and also have some money to pay a lawyer if needed, then just going with the flow is a good thing. If not you may want to seek out a bankruptcy lawyer for a consultation,or a lawyer to help with violations in the future and suits. Woofer
Good points on either side of BK. But something that was not discussed was your career. You mention you are a recent graduate, and although I don't know your career path, an ugly report could be a hinderance. Just something else you should explore...
No one can give you specific legal advice, but general information is possible. It would help a lot to know which state you are in. If you plan to sit and see what happens, the lower the score the better. You don't want to improve your credit score yet. Please do state your state, however, this is very important.
