I was stupid while I was in college, and had several credit cards with relatively small limits. I also had a large unsecured loan which was part of the Army ROTC program that I was contracted in. I was injured, and lost my ROTC scholarship which doubled as my income, and wasn't able to make payments on any of these accounts for extended periods of time.
The debt totals about $40,000 - 25 of which is the unsecured personal loan. All of the accounts, including the loan, have been charged off, and most of the charge offs were about a year ago.
Are there any likelihood that the creditors will take legal action? I'm hoping I can simply wait the 7 years total for this all to fall of my credit report, but I'm very scared that years down the road I'm going to be sued by creditors. So, should I file bankruptcy?
Thank you for any advice you can offer.
paying off debt
Hi Owen,
Yes, the creditors/lender or the collection agencies can definitely take a legal action against you, if you still fail to make any payments. Thus, you need to pay off these debts. A judgment once entered on your credit report will stay for seven years, and can be renewed before the expiry, if not satisfied. This will hurt your credit all the more along with the charge-offs.
If you don't have the money to make the payments, you can try debt consolidation. In debt consolidation all your debts are consolidated into one, and thus, you need to take out a single loan to pay off these debts. The greatest advantage is that, in place of many payments you can make a single monthly payment for all your debts. You can either do this yourself, or join a non profit credit counseling agency, who can help you in consolidating your debts.
Thanks,
Aaron