Credit Advice

Have a question? Have advice to share? The combined knowledge and experience of everyone in the Credit Karma community can help you. Enter your question or help others below to get started!

Question

Posted in Bankruptcy
Profile Image

Question By
5009Queen

0 Contributions
0 People Helped
Is bankruptcy better choice then having accounts in collection

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW
All Responses

Result 1-1 of 1Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next
Top Contributor
270 Contributions
130 People Helped
Most Helpful Response

Helpful to 1 out of 1 people

Usually bankruptcy is not the best choice. It's a very extreme measure that should be reserved for only the most extreme circumstances. If your only problem is a bunch of collections and they are not for huge dollar amounts, no way should you file for bankruptcy. If any of them are very large (a couple thousand dollars or more) there's a decent chance you could be sued for it. If you have the means to settle with the collection agencies, you should, if only to avoid a lawsuit. If the collection is so huge you don't think you could ever pay it off and you get sued, bankruptcy can get rid if a civil judgment and protect you from future wage garnishments and bank account levies.  It can also help you to keep your home in the event of a foreclosure.
In terms of damage to your credit score, no question about it--bankruptcy is the worst thing for it. You could have a dozen or more derogatory accounts and it won't do the same amount of damage a bankruptcy will. 

As for annoying collectors calling you, bankruptcy pests (scammers, mostly, because bankruptcy is a public record and if people know you're in financial trouble they will try to exploit that) are even worse.

Finally, filing for bankruptcy isn't free. Your money would probably be better spent paying collections. Closed collections look much better on your report than open collections (although it won't help your score much, if at all).

Result 1-1 of 1Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW

Reply to this Question

Write your response:
Enter Your Comments

The Credit Advice pages of the Site may contain messages submitted by users over whom Credit Karma has no control. Credit Karma cannot guarantee the accuracy, integrity or quality of any such messages. Some users may post messages that are misleading, untrue or offensive. You must bear all risk associated with your use of the Credit Advice pages and should not rely on messages in making (or refraining from making) any specific financial or other decisions.