Young person in debt

[maybe]

What is the name of your state? NY

I am 22 y/o and about 15,000 in debt the only property I own is a car that I bought cash. I have payed off one school loan and have another that I make payments on that is up to date. I paid off one of my credit cards earlier in the year. My question is if I try to negotiate a payment with the creditors after I pay the bills off will it increase my credit score. Is it worth it to try and pay off the bills I was out of work for the last couple of months and to try to catch up now seems unbearable. I have not payed any creditors since february. Will this effect my car insurance or getting money for school in the future? What about a car or house? I figure any way I look at my credit is ruined so I should try to do something now. So at least by the time I am 30 it should be cleared up for the future. Or am I wrong for thinking so?

 

[luckynucky]

I wouldn't even consider filing bk for 15K. You can pay it off and try to do it. Try to get another job but pay it off.

 

[Fat Tony]

Depending on your income, I'd go ahead and file a chapter 7, get everything discharged, and start anew. Just be sure not to make the same mistakes again, and you'll be fine by 25. Most people fail to realize that even though a bankruptcy stays on your credit for many years, most places ignore it after 2 years. You're credit score will take a hit temporarily, but you can start re-establishing your credit immediately and it will shoot back up. Im a mortgage broker, I look at credit reports everyday, and its not uncommon to see someone have a 700 or higher score less than 2 years out of bankruptcy.

 

[Ladynred]

Paying off already bad debts will NOT help your scores, unfortunately. The negatives will stay on your reports regardless for 7-1/2 years and these bad entries will continue to poison your score until they drop off your reports. A 'paid collection' or 'paid charge-off' is still a NEGATIVE mark on your credit. Its only somewhat more favorable to some to see that you actually paid them off, but the fact they went bad in the first place is still going to kill your scores. FICO is totally unforgiving.