My credit is terrible, what do you think: bankruptcy or something like credit counselors to help your credit?
Answers:
In the US, to declare bankruptcy, you must first go through credit counseling, so that's your first step.
You can find an accredited credit counselor using www.nfcc.org
It depends on how much you owe, how much you make, etc. but don't wait to take care of the problem. I waited too long and I'm being sued and now the creditors won't talk to me or deal with the credit counselors so I'm being forced into bankruptcy before my wages get garnished. Credit counseling can help for sure but you need to take care of it before the lawsuits roll in. Good luck
From a lending standpoint, credit counseling is treated like a bankruptcy. For example, most mortgage lenders cannot lend to individuals currently in credit counseling - just as if they are in chapt. 13 bankruptcy. Mortgage financing is available through FHA after only 2 years from a bankruptcy discharge and there are some sub-prime lenders that will "buy-out" or "payoff" a chapter 13 bankruptcy (if you own property of course). I'm not saying you should file bankruptcy, just that credit counseling is just as derogatory as a bankruptcy from a credit underwriting standpoint. This is the same in the auto credit industry too. Try contacting your lenders directly to work out more favorable payment terms. If that doesn't work, you may want to speak to an attorney before deciding which avenue is right for your situation. Best of luck to you.
I vote for credit counseling
I filed bankruptcy prior to the new laws and after doing credit counceling. The counceling was working but if you miss a payment the companies don't want to hear it no matter the excuse. I lost a family member after a long illness. When the illness got worse I missed work and the household was supported on 1 income instead of 2 for a while. I missed 1 payment, sent all the creditors letters explaining the situation and then I started getting demand notices for the remaining balances. The bankruptcy was my last resort and has helped me get back in the game of life. My bankruptcy was discharged 18 months ago and my credit has improved greatly. But like the others said with the new law you now have to go through credit counceling before being able to file bankruptcy. I suggest contacting the BBB and ask for a listing of their recommended agencies.
spend less than you earn!
open a savings account and save.
:-)
I believe you should take steps to repair it yourself. I'd like to suggest http://www.thecreditrepairmanual.com...
With subjects like:
Wipe out debt without bankruptcy
Solving credit problems
Managing your debt
to name a few topic there. You just have to apply yourself to correcting the problem.
Best Regards,
Some of these answers are just wrong. In the US, you DON'T have to go through Credit Counseling. Just file chapter 7 and you'll have perfect credit in a year as long as you make sure all of the creditors report accurately after the bk and you reestablish some tradelines. Going through credit counseling will only postpone the day in which you will finally be debt free. Good Luck.
Scott's answer below is wrong. Effective Nov 2005, attorneys must refer you through the consumer counseling service,. you also must take tests on the computer. Filing chapter 7 is more limited now, and attorneys must prove you have no way to continue making payments. As far as having perfect credit in a year, is not true. The BK will stay on your file, from 7- 10 years. Your score... depends on what your previous history was, and how long you've had credit. I filed BK, chapter 7, in 2004. My score afterwards, was higher than average, because of my credit history., but it is still lower than Good!
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be carefull of DEBT COUNSELORS,read budhibbs,com..try repairing yourself--less costly,theres alot of sites to check,,be prepared its alot of work,,
Hi,
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