Quote:
Originally posted by sycamore
Rho went under CCCS protection 4 years ago--it didn't affect her credit rating too badly, her interest rates are low, she's almost paid off and she actually got a credit card while on it (which you're not supposed to do, and which we immediately cut up).
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There are different types of CCCS - some of them are effective and do not further harm your credit. Most of them hurt your credit though, in that they don't pay every bill every month, they only guarantee that if you stay in the program your debt will be eliminated. I have seen some people where there CCCS agency only paid one card/month which completely through them in the shitter. Sometimes the CCCS settles for a smaller amount if the creditor will be paid off faster. But then the account stays on your CBR and is tagged "Settled-Not Paid In Full" That generally scares away future lenders.
Ch7 is the way to go. You will pay higher interest rates for the next car and probably the next house, but if you wisely and quickly move to reestablish credit as described above you will quickly rebound into A paper lending. (2-3 years, depending on bank)
The cost for filing is different in each state.(about $200-300, generally) You do not need a lawyer or legal clerk. Only $25 at the bookstore for a "Pro Se" BK kit, all of your bills, and patience. Make copies of the kit before you start writing on it, because when you deliver it to the BK court they will tell you at the counter if something is wrong and how to correct it. And strangely enough noone stood up and pointed at me or chanted LOSER, LOSER when I went down there.
1 last thought - I would BK on all unsecured debt, don't hold any affordable ones out like LJ suggested. Future debtors look at the inception date of a debt to decide whether they will count it as re-establishment or not. If the date is prior is BK discharge, it doesn't gie you any extra points.
I lied - 1 more, after the BK is discharged the creditors will show on your CBR but with the caption "discharged, Ch 7" it will no longer show previous balance or payment history, that is how you FICO can rebound so rapidly.