We get it: you want to get rid of your debt or at least get it under control, but you don’t want to destroy your credit. And you think that one of those non-bankruptcy options will do the trick.
Let’s get a few things straight. One, if your credit is bad, bankruptcy will help in most cases. How can that be? Because bankruptcy ends the seemingly non-ending string of negative entries onto your credit report. It cleans it up going forward.
From the day you file for bankruptcy, you can rebuild your credit. And it is surprisingly easy to do, with almost all of our clients having some credit immediately (such as the ability to buy a car), and almost full credit back within two years after the completion of their bankruptcy case. In fact, you should be able to finance a house within two, and at the outside, three years after the completion of your bankruptcy.
But what if your credit is good? You don’t want to destroy that, do you?
Let’s say you have a credit score over 700. Not pristine, mind you, but good. You owe over $60,000 in credit cards and have about $50,000 in income. If you continue to pay the charges at the current amount, you would have to pay them over 15 years and it would cost over a quarter of a million dollars. It is also worth noting that if you make even one late payment, it could be on the credit report for seven years.)
So here are the choices.You can pay the quarter of a million dollars and keep your credit but never have any available money for yourself for the next decade-and-a-half, or you could do a Chapter 13 reorganization, pay off the debt in five years, and have a decade of zero debt.
Does your credit mean more to you than having the rest of your life virtually debt-free? The above situation is just one example. Often clients don’t have to pay back any money at all to these creditors and can still keep all that they own. The only way to find out your options, however, is to contact us at Steidl and Steinberg so we can analyze your situation and place the options in front of you.
If you do this, we give you a lot of credit. Even if you don’t have a lot of credit.