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JLQ13

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Is it better to have a bankruptcy on your report or bad credit while trying to settle dept

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Bankruptcy on your credit report will not delete the payment history or the collection status that is already on your report.  The damage is already done.   Work with each creditor to begin an installment process so that they don't continue to pass your debt from one collection agent to another.   Communication is key.  Its better that everyone gets a little then doing it one at a time.  Routinely, if payments are forthcoming, they don't sell the accounts.   You should discuss with each one and negotiate a payment as to what they will accept to pay off the debt and include payments.   If you want to avoid the payments, you can file for bankruptcy.  if the court rules you have the resources to pay the majority of the accounts, you will file Chapter 13.  This  will stop the collections although you still pay them off, usually at a reduced amount.  This stays on you record for 7 years.   If the court agrees you don't have the resources, then it will be Chapter 7 and this will be on your record for10 years, although you won't be paying anyone.  If you do file bankruptcy, be certain that you include absolutely everyone in the proceedings.  This includes original debor as well as collection agents.   Note:  Student loans and tax liens are not normally part of a bankruptcy.

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A bankruptcy will trash your credit for ten years.  Bad debts drop off after 7 years. Check Dave Ramsey's site to learn how debts can be paid more effectively.

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What they both said, and...

...note that bankruptcy is not a get-out-of-jail free card. Personal opinion: You should only turn to it if (and only if!) the debts you have (or are about to get slammed with) are far beyond your ability to pay them off in a reasonable amount of time (e.g. medical bills, disaster/catastrophe not covered by insurance, divorce/death-of-spouse, forced retirement due to injury or disability, forced long-term unemployment or lower salary/income, etc.) I don't mind saying that mine was filed a bit over 6 years ago due to medical bills piling up (coupled with the insurer refusing to pay their due part of said bills). Unless it's something massive and life-altering like that, don't do it.

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