Creditors and Bankruptcy/charge off or bankrupcy?

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Expert: Regan Shinski - 1/8/2010


Question
I'll make this short.  I'm 61 working, my husband is 82 semi-retired.  We had five properties. four income producing.  Last house purchased in 2006.  Forclosed on two properties and charged off on a $39,000 equity line of credit.  I have three other active credit cards which I'm trying to pay.  $4,000, $500 and a $10,000 one.  I'm working hard to pay them off.  I can only pay 1/2 of what the $10,000 cc company wants me to pay.  I see no end in sight in being able to pay them back. If I file a bankrupcy I would only do it on that credit card.  should I do a charge off? our credit is already ruind.  We feel terrible.

Answer
Hi Esther:

You are talking about two separate issues.  A charge-off is simply an accounting move done by the creditor.  It basically just shuffles the account in their books.  You cannot do a chargeoff and if they do it, it really has little effect on you.

Bankruptcy is a whole other issue.  If you do bankruptcy, you should include EVERY unsecured debt in my opinion.  BK is meant to be a fresh start, so why keep debt?  Additionally, it is very possible any credit card you keep open will be closed by the creditor when they see the BK on your reports - even if you do not include that specific card in the BK.  So I think it best to include as much debt as you can if you decide to go the BK route.

Another option is to just stop paying but not file BK yet.  You will have to endure 1-3 months of calls.  At that point, most credit card issuers will turn it over to a collection agency.  You can then send them a letter telling them not to call you and they have to obey.  That MAY be the end of it.  It will still stay on your credit reports but they may deem it as uncollectible and basically drop it.  The advantage to this is it saves you the COST and stigma of a BK.

The downside is that one or more creditors may take the extra step and sue you.  If they do, you can try and fight or delay it or at THAT POINT you file your BK.  We can discuss options as they arise.

Good luck!  I hope this helps.

Regan

Creditors and Bankruptcy

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Regan Shinski

Expertise

I can answer questions on collections, repossessions, bankruptcy, credit repair, credit counseling, FICO scores, credit planning, and the cause and effect of credit related decisions. I can also answer questions on collection settlements and preparing to sue your creditors for false debts and credit reporting.

Experience

Fifteen years ago I was financially devasted due to severe health issues. I filed bankruptcy, had a foreclosure, car repossession, tax lien, and ruined credit. I immersed myself in credit law. I settled dozens of accounts and had them removed to improve my credit. I personally sued four creditors and collection agencies and won cash settlements for their false reporting on my credit reports. Since then, I have completely recovered and have nearly $100,000 in revolving credit lines and perfect credit. I have owned a credit repair company for the past five years and have an additional three years of specific work in the collections and debt management industry. I am fully versed in the Fair Debt Collection Practices Acts (FDCPA), Fair Credit Reporting Act (FCRA), and have used them successfully in collection settlements and lawsuits for myself and others. I am also familiar with and abide by the Credit Repair Organizations Act (CROA). I have deleted or helped delete literally hundreds and hundreds of derogatory items from consumers' credit reports and helped negotiate many settlements with collection agencies and creditors. I have also advised people on bankruptcy at any stage. In the current credit market, I have successfully advised numerous people on how to obtain credit and how to negotiate for better terms.

Education/Credentials
BA - University of Minnesota

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(private)

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