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curriercarlson85

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I have horrible credit and want to purchase a home in another state.. Is bankruptcy an option??
I am currently in California, but want to purchase a home in North Dakota within 12 months. Is it better to attempt a settlement with creditors, or file bankruptcy and start over. My wife filed bankruptcy in 2008 and has a lot of school loans so her credit is worse. Im just hoping to get out of this expensive state.

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Bankruptcy will makes things worse for a very long time.  If your wife has federal student loans, have her call Crest at 469-619-0644 and they may be able to help with that issue (forebearance, deferment, income-based repayment, etc.)  It is much better to try settlement with creditors, but do your best to get them to agree in writing to remove the negative accounts from the credit report once paid off.  To learn more, visit www.credit.about.com and on the lower left hand of the page, click on "Consumer Bankruptcy".  Best of luck!

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Good luck.

Most mortgage companies want you to have a squeaky clean credit file and an above average credit score.  Even if you had great credit but still owed $25 on a charge off say from 2008, they would want you to pay that before issuing you a dime. 

Judging by what you are saying, your odds are slim-to-none (Probably closer to the none range). 

Bankruptcies stay on your credit report for 10 years.  Your wife has 4 more years to go.  If you declare bankruptcy, an new 10-year clock starts all over again.  So, unless you are so far in debt that you can't pay your bills, bankruptcy shouldn't be an option.  Besides, school loans cannot be discharged in a bankruptcy, so she's still stuck with those regardless what you do.

There is a bright side, but it's not going to happen within the next 12 months unless you attack the problem head-on.

If your credit is horrid, then it has no place to go but up.  And any little credit changes you make today will have dramatic changes as far as your score is concerned.  First off, check your credit report for charge-offs and bad credit lines that are at least 6-years old.  All charge-offs and bad lines must be removed from your credit file when they become 7 years old.  So, there is no need to worry about those.  You also want to check for errors.  Errors can be disputed right on line, and creditors have 30 days to respond.  If they fail to respond, then the bad credit line must be removed from your file.  You can easily gain 15-25 points in a month by one older creditor failing to respond to a dispute (even if the information on your file is correct).

Secondly, you may want  to confront any past due debts that are less than 6 years old.  This is especially true for small debts of like $100, $200, etc.  These small collections are just as damaging to your credit file as a $8000 bad debt.  So start there.  Many times you are able to negotiate with the original creditors in exchange for them to improve or even remove the credit line they reported.  But be careful here.  If you decide to pursue this avenue, be prepared to follow through with it by keeping your end of the bargain.  It's quite possible the statute of limitations can begin all over again.  For example, if you have a debt that's already 4-years old, it can rewind to day one, and start the 7 year process all over again.

Obtain new credit!  This is easiest through credit cards.  If you are unable to obtain unsecured cards, then get yourself some secured cards.  Positive credit will slowly overshadow bad credit as time goes by.

As far as your wife's bankruptcy?  The older it gets, the less important it gets.  An old bankruptcy may be overlooked if you've established a good credit record since then.

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