Im about $8,000 in debt, mostly medical bills. Im 23 and I want to get my credit back on track.
2006-07-20 00:57:33 · 6 answers · asked by Anonymous in Business & Finance ➔ Credit
depends were you live.
it is different for each country.
sometimes different in each state
" " " " province.
2006-07-20 01:00:28 · answer #1 · answered by rottentothecore 5 · 0⤊ 0⤋
These days, with the new bankruptcy laws, you have to stay in bankruptcy longer (to give the creditor a chance to collect their debt) an average of two to three years depending on what debt repayment plan has been arranged for you. Also, it is much more difficult to totally liquidate debt via Chapter 7 (almost impossible).
Bankruptcy should of course be a last resort because it does cause your credit score to take a dive and stays on your credit report for at least 10 years.
Some alternative tips would be to always try to make payment arrangements and keep in close contact with the medical bill creditors to manage your debt and to keep it from effecting your credit. Managing debt is a part of keeping yourself on track in the future, too.
If you were without insurance and were withing a certain income bracket, some states will pay for prior medical bills if you qualify and did not have any other coverage when the bills occured. Check with your local Human Servicece office for info.
If you have to file, if you have any student loans, they cannot be filed but can be an asset because you are able to use the regular payments to rebuild your credit faster. Perhaps you can use a student loan to help to arrange to repay the medical debt? If you don't already have a degree and want to pursue higher learning. Community college educations allow you to pocket some of the extra cash while you learn and grow. Proprietary schools, private schools and universities are more expensive and will have you scrounging for cash to pay them. Also, once you are in a credit building mode, be careful and dont apply for a lot of credit. Even if you are declined, each inquiry you allow take your score down. Paying on time on a credit account at a small local retailer who reports to the credit bureau is great to rebuild your credit too.
Lasly, remember, whether you manage your credit better or file bankruptcy, nothing is a quick fix!!! Either way, it will take a little time; perhaps a couple of years and hard work to repair, properly manage and protect your credit.
Good Luck
2006-07-20 01:28:30 · answer #2 · answered by Alecia M 2 · 0⤊ 0⤋
It's true. $8,000 is really not that much debt. We filed bankruptcy about 10 years ago, and it cost us $1,000. (Yes, ironically it costs $ to be free of debt.)
We had to default on a mortgage because the condo market had dropped and to sell it would have meant a loss of $60K. Our family was growing and we needed a bigger place. (Since then I've seen the real estate values rise back up again, but it's taken 10 years.)
Lots of credit unions and other places are helpful in getting you a consolidation loan. You'll have a plan for paying it off in a specified time with payments that you can anticipate. Perhaps you could find an extra job for a few years to put towards the loan.
The other drawback is you'll have bad credit for 7+ years after filing. This makes it tough to get a car loan or other types of credit in the future.
2006-07-20 01:27:31 · answer #3 · answered by donna03079 3 · 0⤊ 0⤋
If you declare bankruptcy, your increased costs down the line may dwarf your $8000 debt. $8k sounds like a lot, but it isn't outrageous. If you can get to the point where you are not incurring any increased debt (your budget is balanced) you can start chipping away at the $8k. Hospitals are usually quite reasonable in dealing with debt. Talk to them and work out a payment plan.
Remember, lawyer fees will eat you alive and it is like throwing money down the toilet. Stay away from the courts and try to reason with your creditors. Get to work, spend wisely and be patient. For encouragement, make a chart showing your debt and mark its progress toward zero.
I wish you well.
2006-07-20 01:29:08 · answer #4 · answered by Anonymous · 0⤊ 0⤋
bankruptcy is not the answer for you. you are 8k in debt save the bankruptcy for 80k make arrangements with your creditor to pay it back. take out a personal loan with a co signer if necessary but bankruptcy is not the answer for you.
2006-07-20 01:02:16 · answer #5 · answered by donna 4 · 0⤊ 0⤋
My brother, you are a liability. try and make money wisely and spend it foolishly, bankrupcy works that way.
2006-07-20 01:02:01 · answer #6 · answered by Nnamsco 3 · 0⤊ 0⤋