To4aiden
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23yrs old
Single
Own a 5k car
Don't rent or own a house
Income 5k/mo average

3 Credit cards

1. Capital One - $500. I always make payment but always a high balance.

2. Discover - $1250. I always make payment but always a high balance.

3.Citi

$23k owed. Stopped making payments about 2yrs ago.
Have been making $25/mo payments to the debt collector for about a year now to keep them off my back. Last time I talked to them there offer was $8k to settle.

QUESTION:

I have 10k saved up. Should I pay them all off or should I file Bankruptcy?

Side question since if I pay it I'll owe taxes on the unpaid amount how much do you think I"ll have to pay? I'll make about 45k this year, am single & don't own a house.




Forgot to add I would like to buy a house within a year or so & currently have a 550 credit score

Sub: #1 posted on Mon, 09/02/2013 - 09:43

Unregistered


nobody is gonna give you a motrgage with a 650 score much less 550.so put that off for at least 2yrs after BK discharge if you go that route.there is no magic bullet for your situation as even if you settle your score will tank further.best i can offer is to pay each cerditor one by one with a PFD on each one.worth a try as even if you pay these they will still be on your CR.either way you will not get a mortgage for at least 3yrs as your score is poor at best.

Sub: #2 posted on Tue, 09/03/2013 - 18:09

paulmergel paulmergel
Moderators Cum Industry Expert
(Posts: 15506 | Credits: 1356.56)

Let me understand this....you pay no rent or mortgage, you have $5000 a month income and you are thinking of filing bankrtupcy??
You have $10K in the bank...you are definately not bankrtupt...and with your income you are not likely to qualify for chapter 7. Think it is time for you to grow and learn to live by a budget and get your debts paid. Citi might consider settling but they also may consider suing you. Your monthly interest charge for your citibank account is probably 29% and more...you are paying $25??? If I was the collector handling the account, that is what I would be doing.

FYI...none of them are going to do a pay for delete.

Sub: #3 posted on Tue, 09/03/2013 - 22:01

SOAPLADY SOAPLADY
Moderators Cum Industry Expert
(Posts: 17209 | Credits: 4746.15)

just a thought as the OP is in a fantasy world if they think that with their income,10k in the bank,and a 550 credit score doing anything but what you advised will tank their credit(if a 550 score and two years not paying is bad enough)and it is a miracle citi hasn't sued them yet.

Sub: #4 posted on Tue, 09/03/2013 - 22:26

paulmergel paulmergel
Moderators Cum Industry Expert
(Posts: 15506 | Credits: 1356.56)

With making $5000 a month and $10,000 in the bank, I don't understand why all of these bills could not already be paid in full? It is time to become a responsible adult here. Pay the bills off. With $10,000 in the bank and getting the $5000 a month income, the way I see it, these bills could be paid in full within a month or so, which will look better on the credit report and will make the score go up, eventually. There is no magic solution to make the score go up...pay the bills, and keep your bills paid and it will go up and wait a while longer to buy a house. If you are having this much "trouble" keep things paid while not having any rent or anything like that to pay, then you are going to be in a world of hurt if you buy a house now. You will have your mortgage, insurance, household bills (electric, water, sewer, phone, internet, tv, etc) to pay, plus you have to pay your own repairs if something breaks, etc. Get the bills paid and maybe take some classes on how to live within a budget and how to balance things out. Good luck

Sub: #5 posted on Sat, 09/28/2013 - 02:43

2nband 2nband
Moderators
(Posts: 2279 | Credits: 469.2)

I think you should take the 10k and settle -- just check on the tax side of it -- it will defintely be reported as income and you will owe taxes on that -- but you would be saving yourself from filing chapter 7 or chapter 13

Sub: #6 posted on Fri, 10/18/2013 - 23:06

chrissyhen1 chrissyhen1

(Posts: 152 | Credits: 26.12)

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