Yes Bankruptcy is bad. However once it is filed and been discharged you can begin building your credit again even with the dark cloud of the Bankruptcy on your report for the next seven years. As someone already said financing something with a Bankruptcy on your report is not hard. You need to do something now though. Your plans to buy a house are screwed for seven years from the time you take action anyway.
Option 1. File for bankruptcy. Once the BK is discharged (6months-2 years in most cases) begin building your credit again and by the time the BK is off the report your credit will be good again.
Option 2. Debt management. Make no mistake these people work for the lenders. They aren't all bad though it just isn't the miracle cure for credit. Only time and good payments are. Once in debt management it is almost impossible to get new loans to rebuild your credit until you are done. Which is a good thing but at the same time not so good. Also any bad history remains for seven years from the date of last activity which would be when everything is paid off. This only prolongs your suffering. This is is how it use to work somebody with current experience may correct me.
Option 3. Don't pay anyone. Stop all payments immediately. They will fall off in seven years however you will be left with bad credit end the end. Not a good starting point.
Option 4: The correct option. Pay your bills. Do whatever it takes to pay them as quickly as possible. If your wife has to stop school for a few months so you can get your sh!t straight do it. One of you take a second job and the other work weekends. Dedicate all the extra money you have to your bills and they will be paid off in a short period of time. You are kidding yourself if you think a house is in your near future. The sooner you get the bills paid the sooner you can start planning for goals like that. In a few months you would have a place to start fresh. It will be much easier to get loans to rebuild your credit once everyone is paid and people see that you paid the chargeoffs. Do not accept settlement offers. Pay the full amount. Again that dark cloud will be with you for seven years anyway but additional new accounts paid on time will bring some light in and when the bad stuff falls off you will be in the clear.
Option 1. File for bankruptcy. Once the BK is discharged (6months-2 years in most cases) begin building your credit again and by the time the BK is off the report your credit will be good again.
Option 2. Debt management. Make no mistake these people work for the lenders. They aren't all bad though it just isn't the miracle cure for credit. Only time and good payments are. Once in debt management it is almost impossible to get new loans to rebuild your credit until you are done. Which is a good thing but at the same time not so good. Also any bad history remains for seven years from the date of last activity which would be when everything is paid off. This only prolongs your suffering. This is is how it use to work somebody with current experience may correct me.
Option 3. Don't pay anyone. Stop all payments immediately. They will fall off in seven years however you will be left with bad credit end the end. Not a good starting point.
Option 4: The correct option. Pay your bills. Do whatever it takes to pay them as quickly as possible. If your wife has to stop school for a few months so you can get your sh!t straight do it. One of you take a second job and the other work weekends. Dedicate all the extra money you have to your bills and they will be paid off in a short period of time. You are kidding yourself if you think a house is in your near future. The sooner you get the bills paid the sooner you can start planning for goals like that. In a few months you would have a place to start fresh. It will be much easier to get loans to rebuild your credit once everyone is paid and people see that you paid the chargeoffs. Do not accept settlement offers. Pay the full amount. Again that dark cloud will be with you for seven years anyway but additional new accounts paid on time will bring some light in and when the bad stuff falls off you will be in the clear.
AND, I should be getting a letter in writing that the charge-off will be taken off my credit report as soon as I pay off the loan. I also owe a local bank about $250 (also a 3 year old account that has been charged off), which I plan to pay off in full once I complete my Capital One debt.
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