bankruptcy or settling on bad debt charge-offs?
Question: Which is more damaging to ones character: Filing for bankruptcy after several bad debt charge-offs; or settling on the bad debt charge-offs and not filing for bankruptcy. Which one is perceived as more responsible? Seems to me that not filing for bankruptcy leaves the door open to be accused of being a deadbeat while filing for bankruptcy appears as if circumstances were beyond my control. What are your thoughts? Thanks!
Answer: That is very true. I’ve worked in credit for over a decade. Different finance companies have different rules as do the credit card issuers…BUT…a bankruptcy will scare off most creditors and it stays on your record for 10 years. The settled charge-offs show an attempt to clear the debt without BK and stays on your record for 7 years. If you are dealing with a person and not a scoring machine, you probably have the better chance of getting credit with the settled accounts as opposed to the BK in my experience. But either way, both are derogatory marks on your credit bureau report. It’s probably going to save you money to file BK instead of settling a large number of accounts, but the mark is going to stay 3 extra years. You have to decide which is the lesser of two evils. That’s the whole point: they shouldn’t. And up to now, they’ve been constrained somewhat by the right of debtors to go into bankruptcy. But now that they’ve managed to change the bankruptcy laws, they’ll own you for life as soon as you’re out of high school.
Sure, smart consumers won’t be affect; nonetheless, I believe it’s an abuse of business power. Who is talking about preventing you from obtaining a credit card that you appear able to handle?
Please focus on the issue: the outrageousness of credit card companies lobbying for and getting a law that prevents consumers from erasing credit card debt through bankruptcy; contrast that with the increasing ease with which executives can move their companies into multi-billion dollar bankruptcies after draining them through fraud and deceitful accounting practices.
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