To file bankruptcy or not... need advice.?

Question

Im 23 and facing the reality of life.I have no parents or guardians just friends. My life is pathetic and I want to turn it around. I make $1200 per mo. doing part time of work, part time that is because I would like to go back to school. I have a car loan and 2 credit cards(33k owe); And yes, gas bills, cellphone, dogfood, my food, and rent. In a nutshell, all those bills stated above came up to $1400/mo. ( now, you might say that's not too much debt, I should get another part-time job and that will solve this.) Well, my plan is long-term, I want to get rid all of my bills by filing chapter 7 ( now all i have to pay is my rent and small bills) by doing so, after i filed, I will go to school full-time(4-6 yrs) and pursue a career that pays very well. While in school, I can save up a couple of thousand and after i graduate, I can use that money for downpayment to purchase a home with a cosigner (i know my record is not clear by that time). Is this a better idea in a long run?

Answer 1

The most popular solutions to the problem of heavy debt burden is to get a debt settlement or file for bankruptcy. Among these two debt settlement is preferred as it has a relatively less impact on credit report. In this article we assess the benefits and drawbacks of debt settlement.

Debt settlement is a process in which an organization will go to your lenders and negotiate with them regarding your debt. The purpose of the whole exercise is to reduce your debt burden. If a settlement company is good it can get your debt reduced by as much as 50%. This is what a creditor needs and this is the most visible benefit of debt settlement. The amount of the debt is reduced, the repayment plan is made easy and often the monthly installments are spread over a long period. This makes life a lot more easier for the borrower.

However, debt settlement is not without its drawbacks. There are two things to worry about. First, is the cost of debt settlement. Debt settlement companies will charge huge amounts for their services. The usual range is between 10-15% of the debt amount. Paying this much amount upfront can turn your financial situation from bad to worse. Read more from: http://www.credit-card-gallery.com/article/212,Debt_Settlement_Benefits_and_drawbacks

Answer 2

If the cards are already closed due to payment problems, then even with payments, your credit is still pretty shot. You really do need to talk with a bankruptcy lawyer. Consultations are free. Although banktupcies do remain part of your credit record for years, it does start to repair itself slowly after the first six months, once you've been freed of crippling debt. And at this point, it's unlikely that a bankruptcy will do any worse credit damage than you're already in, right now. Sometimes it really is best to just start all over with the lessons learned for the future. Many rich and famous people have filed for bankruptcy more than once before finally figuring out how to do it right.

Answer 3

Filing bankruptcy is a TERRIBLE idea! You legitimately OWE them money!

I recommend that you go get FIVE jobs by the end of tomorrow and pay off this stupid debt! If you file bankruptcy, you are just treating a symptom, and not fixing the root cause.

If I woke up tomorrow, and I were in your shoes I would sell the car, buy a beater, and proceed to completely eliminate the debt. You won't believe how good you will feel about yourself when you know that you were able to dig out of this hole all by yourself!

Good luck! By the way, I used to be swimming in debt - after making a decision like the one above I became debt-free in just 14 months!!!

You can do this!

Answer 4

The better idea, is to work more hours and pay off your debts. That establishes your credit, which believe me is VERY important. Besides, with the new Bankruptcy laws, you would probably have to do a chapter 13 ,which means you pay a set fee in to a trustee, who then pays your bills. It still wipes out your credit too. And during the 3-5 years, you are paying, you can't buy anything new without clearing it thru the trustee first. He/she has total control over your finances.

Answer 5

I would file, because you have a good plan of action. It will not come off your credit report for 7 years, by that time you should be ready to buy your first home! I filed 2 years ago and it was the best thing I ever did! Debt free!!

Answer 6

No bankruptcy. Speak with your creditors and ask them for some options letting them know your position. Research debt management strategies and then make a considered opinion on how you can repay the debts taking into account all of the providers options given to you. You might be surprised what you providers might offer. Enter into these agreements and continue to source a consolidation loan for one and cheaper repayment. My profile under debt has more information. Its all free.

Answer 7

If you file bankruptcy, that will remain on your record FOREVER, even if it is discharged after 7-10 years. When you try to get a "real" job, it will show up as part of your history, and will be as appealing to an employer as a criminal conviction with time served.

Do yourself a favour; pay your own debts instead of cheating your way out of them!

Answer 8

both my parents are gone too, so I know how that feels. its not fun. Sometimes it's tough.

congrats on realizing your situation is bad and wanting to change it. ;)

you need a financial plan... cut your bills/living expenses, get on a written spending plan.... get a better job or a second job.... or both! sell the car and get a cheap one.... you may not need to file chapt 7.... can the cell phone for now...

follow the baby steps.

http://www.daveramsey.com/etc/cms/baby_steps_2867.htmlc