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WALLSTREETESQ
WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 17248
Experience:  14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
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I have not made a payment on a mixed out credit card in 8 months.

Customer Question

I have not made a payment on a mixed out credit card in 8 months. I am required to make a payment soon to keep my cc from charging off and being sold to a creditor. I've worked out a plan for 5 years to pay off the cancelled cc with my bank, I may not be able to make all payments going forward but I'm not sure. What is the worst that could happen to an already screwed up credit score if I allow for charge off? Should I consider bankruptcy?
Submitted: 3 years ago.
Category: Bankruptcy Law
Expert:  WALLSTREETESQ replied 3 years ago.

WALLSTREETESQ :

This is a common situation,

WALLSTREETESQ :

if you stop making payments, the creditor could charge off the debt and sell it to a collections agency,

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which would sue you for a judgment,

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if they receive a judgment they can garnish your wages and freeze your personal bank accounts.

WALLSTREETESQ :

However, in many cases you can also settle the debt for 40-50% if it goes to a collection agency if you wish.

WALLSTREETESQ :

If you file a bankruptcy, you can discharge the entire debt, and your credit score will start to improve,

WALLSTREETESQ :

by delaying the action, your score will continue to receive negative information for some time.

WALLSTREETESQ :

Be aware if the debt is over $20,000 it may be better to try to file a bankruptcy,

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if less than $10,000 I would try to settle the debt,

WALLSTREETESQ :

Also, any charged off debt, can be considered income to you, and you would have to declare it as income on your taxes,

WALLSTREETESQ :

If you file a bankruptcy you would not have to worry about any tax implications

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If your household income is below the state median,

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you would most likely be able to file a simple chapter 7,

WALLSTREETESQ :

in NJ if you are a one person household and make less than $5096, you can file a chapter 7.

WALLSTREETESQ :

If you have any further questions please do not hesitate to ask.

WALLSTREETESQ :

If satisfied please provide us with positive feedback, thank you