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To go bankrupt or not? – Chris


I’ve got about $35,000.00 in credit card debt, primarily work expenses from my last job. I was laid off six months ago and have been unable to make any payments on the credit cards since. I’ve also had a car repossessed and after auction owe about $16,000.00 on it still. I don’t think the company I worked for will be able to repay me on what I’ve put on my personal credit cards–at least not for a very long while.

My question is if bankruptcy is my best choice. I’ve been reading a lot about being able to rebuild credit in just three or four years after declaring bankruptcy. To me this seems better than trying to repay the debt. Even with the income from my job, I was still barely able to make just the minimum payments on the credit cards.

I’ve had a few friends suggest different settlement firms. Each of them has poor ratings and articles, though it takes some searching to find. Is that entire industry just one big scam? How does your credit actually be affected if you do consolidate the debt and pay only a percentage of what you actually owe?



Bankruptcy Articles and Posts You Must Read

To get ready to read the information below with the right frame of mind, please first read How Do I Get Out of Debt Quickly? Change Your Mindset.

Bankruptcy Advice

Life After Bankruptcy

Filing Bankruptcy Yourself

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  • Vin Gambard

    I had filed for chapter 7 in 2004 and three months after my debts were discharged I had two credit cards and 3 yrs after I was discharged I had healthy credit limits on those 2 cards and a new car loan of under 5% interest.  You can certainly rebuild your credti score back up to a respectable level, however, despite what others may say, bankruptcy does entail some “punishment” from creditors.  You will be hard pressed to get your credit score above 700, even a few years out of bankruptcy because for 10 solid years you will have the bankruptcy itself pulling down your credit scores.  You will be able to get what I call “b” credit – capital one, HSBC, etc. But most if not all of the “A” creditors such as Bank of America, Chase, citibank and Wells Fargo have very strict policies not to lend to anyone with a bankruptcy on their record – that is of course in this day and age where the banks are not lending as they were a few years ago. The one and only major obstacle I found with bankruptcy is that with many creditors, it is looked upon as a black and white issue.  It does not matter to them that you lost your income, got sick or got divorced or anything like that, nor does it matter that before bankruptcy you paid all of your debts on time and diligently. What matters to them is the mere fact that you filed and you are looked upon as a person who must be punished because you were not able to pay your debt obligations. The whole process was quick and easy and I would only suggest it as a last ditch attempt to get a monkey off your back.  Do not be ashamed of filing and just go on with your life. It is the only legal method to once and for all get debt off your back, but since it can only be done once every 8 years, as I had alreadys stated, I would only use it for a serious problem such as you are having right now. Good luck.

    • Steve Rhode

      This guide will help to rebuild credit quickly following a bankruptcy. Read How to Easily Rebuild Your Credit and Have Good Credit Again.

      And Vin is right. It’s been since 1990 when I filed bankruptcy and American Express will not give me another card. But you know what, my life isn’t any worse for that.

  • Steve Rhode


    It can be especially confusing to begin to find a good path to deal with problem debt.

    Let’s start with the basics and review two links that will at least get us in the ballpark to start discussing these issues.

    1. Use the free How to Get Out of Debt Calculator to review your options.

    2. Carefully read How to Get Out of Debt. The Honest and Unvarnished Truth.

    Then come back and post an update in the comments.


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