It seems like a small amount, but with hardly any income and rising late fees it's getting no where. My credit is already ruined - I don't think the bankruptcy will hurt it that much more. Would it be hard with the new laws to file and wipe the debt out?
2007-02-28 13:33:46 · 11 answers · asked by Anonymous in Business & Finance ➔ Personal Finance
I no longer have any credit cards....everything is paid with cash. I will never again get a credit card.
2007-02-28 13:41:36 · update #1
Is it worth it to do it or would it just hurt me more in the long run?
2007-02-28 13:44:08 · update #2
OMG, NO!!! Don't file BK for that amount.
If anything, contact a consumer credit place and have them help you out. They can stop the late fees and help you get back on track. You're credit may be bad, but the BK will kill it.
Come up with a budget and get yourself back on track. 4.5K is nothing. I used to do BK's & Disso's for a living...you are nowhere near needing to file, trust me.
2007-02-28 13:46:57 · answer #1 · answered by Voice_Of_Reason 5 · 0⤊ 0⤋
Bankruptcy for that small amount will only make you miserable for years to come. Using credit counseling agencies to handle your debt will have EXACTLY the same effect as a bankruptcy, sometimes it is worse for you. Here's how you fix it:
1. Send your creditor a letter explaining how much you can pay towards your debt each month and then do it. Also give them an idea of your debts and what portion of your income is going to go to them and let them know you are VERY close to filing bankruptcy. If they threaten you or don't offer you relief...
2. Pay a lawyer a couple hundred dollars to do the same. It should help.
3. Realize that they will turn you over to a bill collector who will settle for about 50% of what you owe if you can pay it off all at once. Be sure to get any settlement agreement inwriting before paying them, though.
4. Don't buy on credit until you have control of your finances. In order to establish better credit will require getting new credit, and having control of your money will put you on the right track.
5. Don't spend more than you take in. Seems simple, but at this stage, if you learn it now, you will be far ahead of the rest of America in the near future. Find a system that works for you. Keep it simple, BUT DO IT.
Good luck. Been there, done that, got the scars to prove it.
2007-03-01 01:16:14 · answer #2 · answered by flip that house 1 · 1⤊ 0⤋
Most people wouldn't file a bankruptcy case for such a small debt. However, it will grow rapidly now that you are in default, probably at a 29% interest rate/year or more. Consider the possibility of getting additional work in order to pay back this debt. The consequences of bankruptcy are worse for most people than is a $4,500 debt. On the other hand, if you are a senior and only on social security with no prospects for income, my advice might be different.
You don't mention whether you have assets against which a creditor might recover, or whether you are employed and your wages might be garnished. So it is hard to give you complete and proper advice.
2007-03-01 06:00:45 · answer #3 · answered by DLeibowitz 5 · 0⤊ 0⤋
SJ... I know bankruptcy sounds like a simple answer, but it really isn't. It will lead to additional problems in the future. $4,500 dollars is a lot of money.
Is this debt on one card or multiple cards?
If you have multiple cards, I would recommend a credit card counseling service. They will negotiate with your credit card companies to reduce or eliminate the interest and fees on your card and assist you by collecting and distributing your payments for you. Shrinking the amount of time you have to pay on the debt. This will have affect your credit, but not as badly as bankruptcy or non-payment.
If you have one card, you may be able to negotiate with the one credit card company on your own to stop the late fees and negotiate a flat payment schedule.
I am glad to read you have cut up the credit cards, once you pay this balance off. Keep paying the same payments, except pay them into your personal savings.
2007-02-28 21:56:12 · answer #4 · answered by ASUQB1 2 · 0⤊ 0⤋
Bankruptcy will hurt you for at least 10 years after you file. You created this debt so don't be looking for someone else to wipe it out. Most big cities have free credit counseling, so try and set up an appointment with a counselor who can help you pay off your debt yourself instead of passing the buck to someone else.
2007-02-28 21:38:26 · answer #5 · answered by CctbOh 5 · 0⤊ 0⤋
More than just bad credit, bankruptcies are a sign unto themselves. I suggest you stop spending on credit cards altogether and just pay cash. maybe you can have a friend or parent bail you out, or take aonther job, if you are not already working two to try yo relieve the debt.
2007-02-28 21:39:04 · answer #6 · answered by moonman 6 · 0⤊ 0⤋
Well, when you file bankruptcy, you can't do certain things for seven years (I think)...So it's gonna be tough on you. You can also file for it at anytime (if that was your question, that's what I thought it was at first until I saw your extra information).
Bankruptcy can hurt your credit, even if it's already ruined, though.
2007-02-28 21:38:32 · answer #7 · answered by Julia 3 · 0⤊ 0⤋
See the information under the "Consumer Information Center" tab at the American Bankruptcy Institute website http://www.abiworld.org//AM/Template.cfm?Section=Home That might give you some helpful information. You might also want to contact your local nonprofit Consumer Counseling Center; they might have additional advice.
2007-02-28 21:50:05 · answer #8 · answered by Tony 5 · 0⤊ 0⤋
$4,500 is a trivial amount. Don't declare bankruptcy for it.
Pay it off.
Work on repairing your credit. It will take less time than you think.
2007-03-01 13:24:15 · answer #9 · answered by Quixotic 3 · 0⤊ 0⤋
It's a small amount.
(quote)
People have a legal and moral responsibility to repay their debts: You're right, we do. But sometimes life happens... (more)
2007-02-28 22:17:02 · answer #10 · answered by 1090 4 · 0⤊ 0⤋