Credit Advice

If you file bankruptcy, you cannot obtain a mortgage for a minimum of two years according to FHA policy.  And, if your wife works, even though it may just be you declaring bankruptcy, her assets and income count as part of the equation for what will happen in bankruptcy. But, be careful of many debt relief programs.  Many do not achieve what they lead you to believe.  And, you need to look at the fees associated with each of the programs, as well. What you need to do in order to determine what is best for you is first, go through your debts.  List them out, including minimum payments, etc.   Determine which ones cannot be discharged through bankruptcy, such as most student loans.  How many of the debts are with collection agencies?  Many times, you can work out favorable repayment plans with them that are better than you could get with the original lender, and also, many will give periodic settlement offers for anywhere from 30-70% of what you owe. Regardless, it will be some time before you can buy a house, and most likely before you can get a car loan.  You need to find a way to start establishing some good credit, but that also means having an open line of credit that you are actually using and/or paying off that is not in collections or closed to being able to charge more (for revolving credit). A debt relief program typically does a number of things that you can do on your own, but charge you a fee for the service.  Bankruptcy is on your record for 10 years. You will also want to look at whether you can qualify for Chapter 7 bankruptcy, or whether you have to file chapter 13.  Each type has a different impact on your financial life going forward. What is right for you?  I don't know.   You have two children and a family to think about, which must be part of your decision-making process.  There are many different pieces of the puzzle, including any employment you may obtain after you graduate.  And, you are at a time of your life when many things can change very quickly.