Hi,
For last 3 years I am without any work. As a result I have defaulted on student loans, back taxes, credit cards. As a result I have judgments, car repossession, etc on my credit report.
The total debt amount is $50k. I am terrified of getting a copy of my credit report, and by doing so alerting all the creditors to where I am when I don't have any "professional" advice nor a plan of action to deal with them all. I have recently got a job, but I don't know what to do about all this debt or where to turn. If I should look into bankruptcy, lie low for the next 3-7 years, or what. Or should I join a credit counseling company.
I really want to work through these problems instead of hiding/running away from them. I just don't know where to go.
paing off teh student loan
Hi Jonnie,
You ca try to pay off all your debt, and rebuild your credit. For paying off these debts you need not join a credit counseling company. If the accounts are still with your creditors and lenders, or are with collection agencies, you can talk with them about the payments. Get the payment agreements in writing.
Send "Pay for delete" letters to your creditors. With the "Pay for delete" (PFD) agreement all the negatives from your account will get deleted.
As for the Federal student loan, the government provides a program known as the rehabilitation program. You will have to agree to make payments for 9 months. If the payments are made according to the arrangement, the debt will be removed from your credit report. The remaining part of the debt can be refinanced.
You should never file for bankruptcy. This stays on your credit report for 10 years, and hurts your credit. Moreover chapter 13 bankruptcy is just like a repayment plan, and in chapter 7 bankruptcy all your non exempt assets are sold off to make payments to your creditors. So, ultimately when you will have to pay, why hurt your credit unnecessarily?
Thanks,
Aaron