Finance advice...bankruptcy or? (1 Viewer)

[southbound]

Not going to Em this up but basically I have approximately $12-$13k in credit card debt that was charged off around 2009/2010. My credit report shows most of it being removed around 2016-2017 from my report.

Should I contact the companies and try to settle for 50% of balances, ride it out until they clear off my report, or declare bankruptcy?

I can likely pay off at 50% within the next 12 months if I went that route.

 

[Stinger Ray]

I am almost certain your credit won't improve if you try and settle. It will still have an adverse affect on your credit. Why would you consider bankruptcy now if the debt was written off 4 + years ago?

 

[southbound]

Hadn't really considered bankruptcy but when I got my credit report last night it's first recommendation listed was bankruptcy.

 

[johnnycakes]

You sure you're a real FBG?

 

[jon_mx]

Bankruptcy????? That is nuts....I don't think it is worth settling for less. It will still show up on your credit report. And it might even reset the date and it could prolong the time it is on there. Just ride it out at this point, unless you want to pay it all off.

 

[tjnc09]

Do you have a lot of expendable income and/or assets?

 

[Juxtatarot]

Hadn't really considered bankruptcy but when I got my credit report last night it's first recommendation listed was bankruptcy.

Credit reports are giving financial advice these days?

 

[jon_mx]

Hadn't really considered bankruptcy but when I got my credit report last night it's first recommendation listed was bankruptcy.

Let's just go ahead and swallow the cow to catch the fly. No reason to get the spider, cat, dog and other involved here.

 

[Stinger Ray]

Hadn't really considered bankruptcy but when I got my credit report last night it's first recommendation listed was bankruptcy.

So you had these debts written off 4 years ago but last night was the first time you checked your credit report? If those creditors that wrote those accounts off aren't bothering you now then let it go.

 

[southbound]

I didn't have much expendenBle income until the past few months which is why I was considering paying them off now but I'm also at a point where I don't need credit in the near future which is also why I was considering saving the 6-7k and urging it out.

 

[southbound]

I've checked it before then yeah but I just I let it go. I've gotten a new phone and moved so they haven't been able to bother me really.

 

[southbound]

Yeah, it suggested bankruptcy, then a secured credit card, then an auto loan. I may do the secured card though to at least rebuild something until they clear off.

 

[tjnc09]

I didn't have much expendenBle income until the past few months which is why I was considering paying them off now but I'm also at a point where I don't need credit in the near future which is also why I was considering saving the 6-7k and urging it out.

Depending on the type of bankruptcy you file, if you have a lot of expendable income or assets, you are going to have to pay as much possible to the trustee in order to satisfy those debts.

Filing bankruptcy isn't ok I filed, I owe $0 and I'm done with it. If you have $400 left over each month after taxes bills loans etc, that $400 goes to pay off your debts.

I really doubt it's worth filing it if you owe only $10,000. Either try to settle or pay it off.

 

[Juxtatarot]

I've checked it before then yeah but I just I let it go. I've gotten a new phone and moved so they haven't been able to bother me really.

Warning, you may run into tax issues soon. 1099-Cs may have been issued on the debts (that you haven't received because they don't know where you live) and the IRS might ask why you didn't add this to your income on your returns.

 

[jon_mx]

I didn't have much expendenBle income until the past few months which is why I was considering paying them off now but I'm also at a point where I don't need credit in the near future which is also why I was considering saving the 6-7k and urging it out.

What are you trying to accomplish? You just want to good credit score so you can tell your friends. Are you trying to clear your conscience? If you are not purchasing a house for the next few years, this is meaningless.

 

[southbound]

Fair enough. That's kind of what I thought was just seeing if that was pretty much correct that it'd be meaningless to do anything about it now. Thanks for the advice.

Sooo throwing the extra $ then into HEMP would be the way to go?

 

[msommer]

Fair enough. That's kind of what I thought was just seeing if that was pretty much correct that it'd be meaningless to do anything about it now. Thanks for the advice.

Sooo throwing the extra $ then into HEMP would be the way to go?

Not really, it's been through the pump and dump cycle so now it'll probably just languish

 

[southbound]

I wouldn't put anything into hemp as is. More aiming to pay off my car, my student loans, and setting up an emergency fund over the next few months.

 

[msommer]

I wouldn't put anything into hemp as is. More aiming to pay off my car, my student loans, and setting up an emergency fund over the next few months.

pay off which ever costs you the highest interest rate

 

[southbound]

Student loans only thing with interest. Car I bought at a buy here pay here where you pay 10 equal payments no interest so I'll hit the loans before the car.

 

[Long Ball Larry]

I am no expert, but I think that the effects of the bankruptcy on the credit report would be longer lasting than 2016-2017.

 

[jon_mx]

I am no expert, but I think that the effects of the bankruptcy on the credit report would be longer lasting than 2016-2017.

I think it is 7 years for a ch. 7 and 10 years for a ch. 13....or maybe the opposite.

 

[Juxtatarot]

I am no expert, but I think that the effects of the bankruptcy on the credit report would be longer lasting than 2016-2017.

I think it is 7 years for a ch. 7 and 10 years for a ch. 13....or maybe the opposite.

Other way around. 10 years for 7.

 

[SacramentoBob]

Talk to a bankruptcy attorney. If you qualify for a Chapter 7, go that route. You basically get off scot free. Those are a lot harder to qualify for now, so you might only get a Chapter 13, which is the equivalent of a court ordered repayment plan. Chances are none of those accounts are still with the originating bank, so contacting them won't do anything. Kind of surprised you haven't been sued over the balances already. You want to get on top of this unless you happen to live in a nice state like California where you're almost outside of the time you can be sued over the debt.

 

[Sand]

I didn't have much expendenBle income until the past few months which is why I was considering paying them off now but I'm also at a point where I don't need credit in the near future which is also why I was considering saving the 6-7k and urging it out.

Whatever you do don't contact the creditors before a consultation. If you make any payments they are going to try and claim what they can - big can of worms to open there.

 

[Juxtatarot]

I guess it's not surprising but it has been interesting to see how bankruptcy has shifted from a measure of last resort to, now, a financial strategy.

 

[Long Ball Larry]

I guess it's not surprising but it has been interesting to see how bankruptcy has shifted from a measure of last resort to, now, a financial strategy.

Reforms in the past few years have made it a far less debtor-beneficial strategy, as far as I understand.

 

[Juxtatarot]

I guess it's not surprising but it has been interesting to see how bankruptcy has shifted from a measure of last resort to, now, a financial strategy.

Reforms in the past few years have made it a far less debtor-beneficial strategy, as far as I understand.

The reform curbed some of the abuses, particularly for those with above median incomes. I wouldn't agree with phrasing that as "far less" though. Perhaps "a little less".

 

[jon_mx]

I can believe people are seriously suggesting bankruptcy for $12k worth of debt.

 

[dozer]

Crying about 12 racks of CC debt..... sheesh.

 

[johnnycakes]

Crying about 12 racks of CC debt..... sheesh.

IIRC, it's closer to 4 racks.

 

[eoMMan]

Work and pay it off a huge decrease from $12k. You don't want to and really shouldn't file bankruptcy.

 

[Maelstrom]

It's not worth filing Bankruptcy for $12k/$13k debt that is already charged off.

But, I would have a settlement account where you stash as much $$ as possible (I saw $6k/$7k liquid?) as a buffer just in case you get sued. At a very least, keep as much liquid assets as you can until you know for sure that you are outside the statute of limitations in your state and they can no longer sue you.

That way, if they sell it to a more aggressive collector, you can work out a settlement (probably at 30%-50% given the age) and have the cash to follow through before it goes to court.

 

[southbound]

It's not worth filing Bankruptcy for $12k/$13k debt that is already charged off.

But, I would have a settlement account where you stash as much $$ as possible (I saw $6k/$7k liquid?) as a buffer just in case you get sued. At a very least, keep as much liquid assets as you can until you know for sure that you are outside the statute of limitations in your state and they can no longer sue you.

That way, if they sell it to a more aggressive collector, you can work out a settlement (probably at 30%-50% given the age) and have the cash to follow through before it goes to court.

Thanks, this is the likely route that I will take. I had always thought to stay clear of bankruptcy considering I'm already 4 years in as well but when I saw it as a suggestion on my credit report thought I would seek a second opionion. Here's to not getting sued in the next 2-3 years and hanging onto that 6k/7k. (Yes I know I should have paid off my debts before but #### happens and my past is a perfect one.)

 

[The Z Machine]

I guess it's not surprising but it has been interesting to see how bankruptcy has shifted from a measure of last resort to, now, a financial strategy.

That's how it's been for businesses for a long time, so why not consumers?

 

[Maelstrom]

I guess it's not surprising but it has been interesting to see how bankruptcy has shifted from a measure of last resort to, now, a financial strategy.

That's how it's been for businesses for a long time, so why not consumers?

It definitely is always part of a valid strategy. The "punishment" is worse or no credit, higher prices when you do need a loan, maybe even trouble getting a job if they rely on a credit score as part of their hiring data (not that I think it's right, but it is a thing.) I'd recommend it as a last resort only, and things like your credit report saying you may want to check into it are not helpful. People definitely underestimate the emotional turmoil it causes, and it is something that sticks with you even after the BK is off your report. It's not something to be done lightly, but at the recommendation of a (good) lawyer or accountant. Unfortunately, too many shady lawyers prey on the unsuspecting and desperate folks who are usually associated with bankruptcies, turning it into a commodity business instead of the kind of thing where it is a valid strategy after taking some risks that didn't pan out, or running into some sort of emergency situation (medical, disaster, etc).

 

[Dr Oadi]

Bankruptcy is always the answer. Paying off your debts is for suckers.

 

[Maelstrom]

Bankruptcy is always the answer. Paying off your debts is for suckers.

Quite flippant, howabout you quit with the schtick and actually try to have a real conversation. There are times where the burden of debt would be too great to bear. In situations like that, Bankruptcy is an answer. When you are able to pay off your debts, you should do so, even if it means being uncomfortable for a few years. It isn't something you can say, hey, that person was irresponsible because they filed for bankruptcy. Sometimes (too often?) irresponsible people do file for bankruptcy, but in many cases it is because of situations that are now out of their control.

 

[Dr Oadi]

Bankruptcy is always the answer. Paying off your debts is for suckers.

There are times where the burden of debt would be too great to bear. ....

Id say being able to pay off 50% of your debt in a years time is not one of those times.

 

[Maelstrom]

Bankruptcy is always the answer. Paying off your debts is for suckers.

There are times where the burden of debt would be too great to bear. ....

Id say being able to pay off 50% of your debt in a years time is not one of those times.

And I would agree with you. The OP has gotten good advice that it isn't a wise decision to do that.

 

[southbound]

Bankruptcy is always the answer. Paying off your debts is for suckers.

There are times where the burden of debt would be too great to bear. ....

Id say being able to pay off 50% of your debt in a years time is not one of those times.

And I would agree with you. The OP has gotten good advice that it isn't a wise decision to do that.

Nor do I intend to and was always kinda skeptical about doing so hence why I haven't done it at anytime in the past 4 years I've had the debt.