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I am 23 and heavily considering bankruptcy; is the option beneficial?
I have more debt than I can keep up with. I work a part-time job that yields a monthly income that is less that $650. I have loans, an accounts that are in collections, as well as a charge off for a car. The more I try to fix things, the deeper my debt seems to become. I am at rock bottom and am in desperate need of a solution to improve my credit. Please help.

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This is a personal decision that only you can make.   You should discuss your options with an attorney.   Discuss with others who have faced a similiar issue.   The bankruptcy will terminate most of your debts, although, possibly not all.   (Taxes, Studen Loans won't be included.)   You will have the immediate relieve of the debts no longer needing paid.  You could possibly start rebuilding your credit in 2-3s,  However, most of your negatives already on your report will remain for about 7 years and the bankruptcy will remain on your record for 10 years.   There are some firms who will start to work with you as you rebuild after a period of time.

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Be straight with the lenders?

Before considering bankruptcy, why don't you just call up each lender and see what they can work out with you? Just tell them your current life situation and provide them needed evidence. I don't see why it's not worth a try. Who knows? Maybe some lender would settle for 23cents to a dollar. They would rather get something back than nothing at all.

Ethically and responsibly, you should try your best to take care of your debt before considering bankruptcy. I'm sure you are trying to do the right thing, that's why you ask for advice, right? Call each lender once a month until you can work out with them a certain manageable payment until you know for sure bankruptcy is the way to go.

Whatever the solution is, I'm confident that you will be ahead of your peers in the future regarding finances as you are more experienced in this regard. Good luck!

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This depends on the lender and the debt. If the debt is secured, they won't budge unless the amount they recover from repossessing and then autioning off the security is less than what you're negotiating for. For example, if you're trying to negotiate with a creditor for your car loan, they'll simply tell you to pay it all (plus any fees they tack on) or you lose your car and still be liable for the rest. Also, if the debt is at or lower than the small-court claims limit (e.g. $7500 in Oregon), they can simply stand pat and tell you to pay up or get dragged into court and have a judgement against you for the amount *plus* legal fees, then garnish your wages until they get what they want.

Long story short, lenders do have options, and negotating with them doesn't automatically give you any advantage.

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