I have about 42,000$ in unsecured credit card debt. it would take me >15yrs to pay it off. I cannot start saving for a house until I pay it off. I have already shredded my credit cards and I plan to never borrow again, for anything. I have learned my lesson on borrowing; I am owned now by creditors. When I get this debt payed off, I plan to save up and pay cash for everything. I will have no more use for a credit score. That being said, is there any reason I shouldn't file for bankruptcy? How would that negatively effect me other than ruining my credit and my chances of being financed for anything for the next 10 years?
The way I see it, If I filed now, then I could get a head start into my new credit-free life and start saving for a house. If I were saving that 900$/month that I'm currently paying towards my cards, then I would would almost have enough to buy a house outright after the 10 yrs was up & wouldn't need to borrow.
On a moral note, I know that I am always supposed to pay back my debt, but don't think I would feel guilty about it. The total of all the interest I have paid over the years is equal or more to the principal which I have borrowed, so I feel that I have already payed my true debt.

 

On another note, has anybody every used of those credit settlement/consolidation agencies? They look like scams to me, but if what they claim is true, then that could be another option for me. I have a feeling that it would look just as bad as a bankruptcy on my credit report so why not go for the full bankruptcy?

 

I've seen many people ruined by credit cards, your story is not uncommon, sadly.

I'm 17 and I vouch never to get a credit card and only borrow when absolutely necessary.

 

I've seen many people ruined by credit cards, your story is not uncommon, sadly.

I'm 17 and I vouch never to get a credit card and only borrow when absolutely necessary.

Good plan there. at age 17 I also said the same thing after seeing my father go through debt troubles. Shortly after that in the military I went through some financial classes that taught that you should start out your credit. they recommended getting a small signature loan to start, then pay it off fast and get a slightly larger one, pay it off, etc. and then get a credit card. They recommended charging a few things per month and paying them off before the interest charge was applied at the end of the month. They recommended annually requesting the limit to be increased since the higher your limits, the better it looks on your credit report. I did all this and managed it well. I wound up with 3 credit cards with limits of 18,000$ and my credit score was about 780. The point of this exercise was to make your score high and to have enough credit history by the time in your life that you are ready to buy a house. Seemed a sound plan. Then I lost my job (well, quit actually so no unemployment, but it's a long story) and ended up living on the cards for 6 months (coincidentally the 6 most financially demanding months of my life). Having never charged any kind of balance to them, I didn't realize the full effect of what I was doing until it was too late. now I'm screwed.

 

Contact a credit COUNSELOR, not a credit restoration agency. They are scams for the most part and the ones that are on the up and up, merely consolidate your debt and arrange payment plans.

That amount is really not so huge, and it is true that sometimes a company can rework the amounts owed. They don't want you to file bankruptcy either.

The counselor will tell you better than I, what your options are. Also, changes are due to take effect this next year(2012,) in respect to certain bankruptcy laws. If you are going to do so, there may be no time like the present.

All of these are things best discussed with someone who KNOWS the laws and what is due to change, and who has negotiated with credit card companies before

 

If you don't have credit histroy you need credit cards to establish it, unfortunately. If you want to buy a house you will need that credit history. Not good, but it is the way it is.

The key is not to lean on the credit cards. Make them work for you, instead of the other way around.

 

If you don't have credit histroy you need credit cards to establish it, unfortunately. If you want to buy a house you will need that credit history. Not good, but it is the way it is.

The key is not to lean on the credit cards. Make them work for you, instead of the other way around.

Right, that was the plan, then it backfired (or I backfired it). Now it's too late & I'm doing damage control. If I were to pay off these credit cards, it would be 20 yrs before I was debt free and had enough money saved up for a down payment, then I need to continue paying for another 15-30 years until I get the house payed off. If I file for bankruptcy (keep in mind, I haven't researched bankruptcy much and not 100% sure what I'm talking about) then I could start saving money right now. Within 10-15 years I could have enough money saved up to buy a house outright, without needing a credit score.

 

Contact a credit COUNSELOR, not a credit restoration agency. They are scams for the most part and the ones that are on the up and up, merely consolidate your debt and arrange payment plans.

Thanks for that tip; I will try to locate one.

That amount is really not so huge, and it is true that sometimes a company can rework the amounts owed. They don't want you to file bankruptcy either.

It is to me. It's more than I make in a year. There's nothing left of my paycheck after making the credit card payments & rent. I (until now) have been forced to continue using the cards to be able to eat. Now the cards are maxed out.

 

can filing for bankruptcy effect you in other area? That's basically what I'm trying to find out. For example, in getting hired, or anything else?

 

Your plan with some of the new laws,your creditors can go beyond the 7 years
they talk about,also the IRS will be at your bankruptcy.You need to talk to some
one that has gone down your road. google bankruptcy,google how long credit cards
debts stays on your credit report. Google how creditors can extend there collection
and keep it on your report.They track your income that triggers how long they will stay on you.When you try to business with cash,you will run into a brick wall in most things research this,would it be better to send all creditors a few dollar each month even if it $5.00 they may have to take it,feed back. After saying all that stuff,I think your best bet
is to do the $5.00-$10.00 month payments,try it one month and see if they accept it. They will tract
your S.S.for working history.Most companies do a credit check before they hire you,you would not get a job at McDonalds.

 

I've seen many people ruined by credit cards, your story is not uncommon, sadly.

I'm 17 and I vouch never to get a credit card and only borrow when absolutely necessary.

You and me both. My parents ran up some debt in the 80's, just about to finally pay it off, right in time to put me in college.

 

Go talk to the load officer at a credit union (NOT a bank) near you. You may have to shop around to find a CU for which you are eligible. A load of $42000 for 10 years at 7% a.p.r. would cost you just under $488 per month.
If you can't find a loan for the full amount, use the divide and conquer method. Pick the credit card for which you owe the least amount. Borrow that amount and pay it off with the proceeds of the new credit union loan. If you can't borrow the full amount, borrow what you can, and pay that credit card down. When one credit card is paid off, start on the next one.
It can be tedious but it works.

 

I don't have a credit card and never planned to have it on future. Period. Bow.

 

I suspect they won't be hitting you up for many years. But when they do, just remember what you said today.

 

How is he going to be able to get a loan with debt,being behind on credit cards
is already on credit report.Stop the bleeding sent a little to each debt per month.
You have a chance that they receive the payments,try it.

 

Excuse me for asking, but what you said about credit history made me curious. Are you saying that in the US you can't get a large loan, unless you have built enough "trust" through the use of credit cards?
If that is correct, that makes the use of credit cards mandatory in the US. Am I right?

 

It's similar in the UK - it's difficult (these days) to get credit unless you have a credit history. It's useful to get a credit card (with a low limit) and use it occassionaly and pay it all off at the end of the month. This way you build up a credit history without building up a large debt.

 

Excuse me for asking, but what you said about credit history made me curious. Are you saying that in the US you can't get a large loan, unless you have built enough "trust" through the use of credit cards?
If that is correct, that makes the use of credit cards mandatory in the US. Am I right?

There are other ways, when I got out of college, and freshly hired, I took out a loan... for my first computer. A TRS80 4K RAM tiny BASIC. State of the art! The bank asked me why, I told them I wanted to build a credit history. That was good enough for them.

 

I had a renegade wife about 20 years ago. (Maxed out several credit cards trying to impress her boyfriend.) The divorce judge said, you have testicles so you owe everything. Forced me into bankruptcy. The worst part was the shame. I didn't suffer financially because I didn't use credit cards. Losing them was no inconvenience to me. I never had a problem with employment because of it, but I don't even try to work for large corporations. That might be a problem for you.

Now, I have credit cards, and a good credit rating, but that's probably because I buy one thing and pay $100 a month until it's paid for. Small potatoes, but if something goes horribly wrong (like my house needs a new roof) I can probably get a loan.

Bottom line: Bankruptcy didn't bother me financially. It was only painful in the emotional department.

 

Pay off your damn loans. Don't use bankruptcy, as that's a completely amoral way out of the problem YOU caused (hopefully, the courts will see the real cause and refuse bankruptcy). Live with the consequences of your actions. Nobody forged your signature to your purchases just as no one put the bottle in my old man's mouth (he drank himself to death and I told him the same thing before he died 30 years ago).

Oh, my words are harsh and not politically-correct? Tough noogies. You can earn the respect of folks by getting yourself out of the mess you caused yourself (including the most important one -- the guy you see in the mirror when you shave). Alternatively, pursue bankruptcy or some other bail-out and you've elevated yourself to that Olympian ideal of moral rectitude occupied by that set of liver flukes we call Congress.