What should I do about this debt?

Question

I ran up more debt than I could handle a year and a half ago. Right now, I am paying back two of them, and combined with my other bills, is leaving me with not much leftover. Another creditor (I owe them $5000) hired a law office who is bugging me for $, but I can't afford to give them payments every month, too. If I pay nothing, the debt will be off my credit in 4 1/2 years, but I risk them taking me to court. If I make small payments, it will take forever to pay off (they're still charging interest), and will be on my credit even longer. Should I file bankruptcy? What should I do?

Answer 1

98% of people that look into filing bankruptcy nowadays find out that they don't qualify due to the income that they earn.

You are behind on the bills. The creditor has to make a decision. Spend more money to sue you for the outstanding balance that they already know that you don't have.

Or

They can Settle with you for less than the balance owed. Many debt settlement companies can work with consumers that are facing some sort of financial hardship. They can way out with the creditor a settlement that satifies both you and the creditor so that you can have the account paid off in 12-18 months and hopefully avoid you filing BK and getting sued.

Credit counseling only helps for people that are on time with the bills and just need lower interest rates. You need debt relief ASAP.

Answer 2

With the change in the bankruptcy laws, creditors are filing lawsuits more and more. They know it will be harder for you to get out of your obligation. The people who mentioned debt settlement companies have the right idea though lawfirms don't settle as low because they have to get their cut of the action. If you are a homeowner you could refinance. CCCS would look like a chapter 13 on your credit report to potential loan officer so I dont recommend that

Answer 3

Try to lower the bills you have now. Cut out eating fastfood with friends, cable T.V., cell phones, ect. Also, if you really want to get your debt cleared out quickly, try getting a second part-time job and put all your wages from that towards paying your debt.

Make payment arriagnments with the people you owe $5000 to. Talk to your other debtors to get the interest lowered on your debts. Try to avoid debt consolidation if you can, as it doesn't look good to lenders. However, if you have to go through one, just make sure they aren't charging you fees that cost more money than they're saving you. Don't even think about bankruptcy.

Answer 4

Contact a credit counseling agency and see if they can get all these debts combined into one payment for you. They might be able to agree on a settlement with the three companies and you might not end up owing the entire balance.
And next time, WATCH YOUR SPENDING!

Answer 5

Pay it off. Call them to set up a payment plan and eventually you'll get caught up. The most important thing for you to do is set up a household budget and stick with it. With patience and perserverance, you'll be surprised how quickly the problem will go away.

Answer 6

There are plenty of ways you can get yourself out of your predicament with your integrity intact, and the stress lifted off your shoulders.

The site below has some great options especially for people in your situation.

Good luck, Pete.

Answer 7

I think you should take out a personal loan at Prosper. It takes about 2-4 days after signing-up and the interest rates are low. Check them out at http://www.ProsperFiveStar.com

If you do decide to get a loan through them, sign up for a group. The interest rates are better and the group leader can guide you through the process of getting your first loan.