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Ask John A. Flynn, Esq. Your Own Question
John A. Flynn, Esq.
John A. Flynn, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 202
Experience:  14 Years Experience in Bankruptcy - Mid-South Super Lawyer
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I have more than 26K in creditcard debt (between different

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I have more than 26K in creditcard debt (between different cards) as a result of being unemployed for over 2 years. When credit cards companies call I have to explain to them my situation over and over again. At this point some of the debt has been charged-off and some has been in delinquency for a few months now. At this point I don;t think I can restore my credit since I am not working and may not find something in the next few months. Instead I have adjusted to living without credit. Is bankruptcy still an option for me at this point, or should I look for a way to settle the balance through one of those companies who claim they can settle the whole amount if I pay a fraction of the 26K in one payment?
Bankruptcy is absolutely still an option for you. If you have not filed a Chapter 7 case in the past 8 years, you may be a candidate for that. If for some reason you don't qualify for Chapter 7, Chapter 13 is a great option that you would likely be a candidate for. I would strongly urge you to contact a local bankruptcy attorney in your area. Most give free initial consultations. I would look for one who is a member of the National Association of Consumer Bankruptcy Attorneys, and you can search for attorneys at their website www.nacba.org

Good luck!
Customer: replied 3 years ago.

Why not try to settle the balance through one of those companies who claims they can settle the whole amount if I pay a fraction of the 26K? (If I can borrow the money from family or someone, in order to try to avoid waiting for another 7 years before I can build my credit again)

You can certainly give that a shot, though in my anecdotal experience and hearing clients talk about that, they often can't get very good discounts in settlements, and even then, what they don't tell you is that the creditor is going to send you a 1099 for the amount they wrote off and you will be liable to the IRS for taxes on such amounts which are deemed income. In bankruptcy, however, you don't incur any tax liability by discharging debts. I strongly discourage debt settlement where someone qualifies for bankruptcy, especially Chapter 7. As far as your credit rating goes, you say you've learned to live without credit. That's good. I encourage all of my clients to do so. If the only thing you use credit for is buying a house, that's ideal. HOWEVER, in most cases, your credit score will actually improve after your bankruptcy discharge because your debt to income ratio goes to zero.
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