BANKRUPTCY?!?!?! GOOD OR BAD?

[cuartio52]

I am a 29 year old new mother. I have 45 hits on my credit score, 38 of those being medical bills. I have one credit card from a few years back, a reposession and student loans, that I am current on. I considered Lexington Law, but am really skeptical on using them. There just isn't anyway that I can afford 500 dollar+ payments a month for 3+ years to clean my credit. I never was taught the importance of credit and made a few small mistakes that have severly damaged my credit score.My brother filed almost 3 years ago and he now has a brand new car, and two credit cards, one that has a 2000 dollar limit. i just want to clean up my score to be able to buy a house , and to provide my son with a better life. PLEASE ONLY REPLY WITH COMMENTS THAT CAN BE HELPFUL. ANY RUDE COMMENTS I WILL FLAG AND REPORT.

[barclay76]

You want to buy a house?
The only way would be to wait 3 to 5 years after a bankruptcy and have 20% to put down. A bankruptcy mucks up your credit for 10 years.
Only file if your unsecured debt is more than 1 years worth of income.
If you are taking $5,000 of debt, this is doable.

Your brother is making the same mistakes again.
Chances are he is paying a high interest rate on that car, and carrying high balances on a bad-for-credit credit card with high fees.

[darik2]

First, run away from Lexington Law or any other debt settlement company. Worst possible idea. You will likely end up in worst shape.

Second, bankrutpcy does not improve your credit or your score. In fact, the bankruptcy makes it worse and remains for 10 years on your credit report. Bankruptcy discharges the debt -- removes your liability to pay the debt.

Third, it isn't the number of hits on your credit report but the amount of the debts. You may not meet the requirements to file chapter 7 bankruptcy and may only be able to do chapter 13 which is a repayment plan. Your total debt may also NOT be worth filing. It costs about $2K to file. You need a lawyer. This is not a do it yourself project.

Oh and the student loans probably won't be discharged in the bankruptcy.

You might check with a NFCC credit counseling service: http://www.nfcc.org/. These are legit, non-profit companies that offer debt management programs for a nominal fee. They also offer free counseling and pre-bankrutpcy counseling. They can look at your situation and offer advice on how your should proceeed.