What does filing bankruptcy do to your credit report?
Wilson asked:
A non professional gave me the advice of filing bankruptcy for debt i have totaling $5000. His argument was that with these debts that i have are obliterating my credit score anyway and that bankruptcy wouldnt be any worse. Is this true? What does filing bankruptcy do to your credit report and would it damage it more or less than leaving these debts sit as i do not have the money to pay them off at the moment. Thank you for reading and any help.
A non professional gave me the advice of filing bankruptcy for debt i have totaling $5000. His argument was that with these debts that i have are obliterating my credit score anyway and that bankruptcy wouldnt be any worse. Is this true? What does filing bankruptcy do to your credit report and would it damage it more or less than leaving these debts sit as i do not have the money to pay them off at the moment. Thank you for reading and any help.
June 25th, 2011 at 12:08 am
Ok, I know your going to think I’m crazy when I tell you this, but $5,000 isn’t a lot of money to owe. Now, before you call me crazy…lets explore a couple of options.
Who’s asking you to pay $5k TODAY? The answer is probably “nobody”. Continue making your payments if you can. If you’re having trouble with the payments contact a reputable credit counselor in your community. I would deal with a local company over one that’s on the internet. This way you can go to their office to make payments or ask questions.
You should also know that under the newer bankruptcy laws, you may have to pay off your debt anyway. Depending on your income and other circumstances, a judge may decide that you have to pay all or part of the debt. Credit counselors can usually get your interest rates down, and may even be able to negotiate late payment fees, etc. So, when it’s all said and done, it might be just as cost effective to deal with the counselor.
I don’t know how old you are or what assets you have; but if you ever want to buy a car or a house you should do everything in your power to avoid bankruptcy.