fix credit or file bankruptcy

[sandiegosub]

im not sure if its easier to fix my credit with all sorts of lates on two accounts
my morg no payments for 16 months and one citi credit card not paying
or claim bankruptcy and wipe out all bad debt including a lien. my score went from 728 to 500 now. they just modified my loan so that should help but but the citicard and lien are still there, i have three cards that are current never late. any thoughts. i heard of people who claimed bannkruptcy and bought a house 2 years later. i dont think i can do it that fast by fixing my credit.

[SurfwhenUcan]

im not sure if its easier to fix my credit with all sorts of lates on two accounts
my morg no payments for 16 months and one citi credit card not paying
or claim bankruptcy and wipe out all bad debt including a lien. my score went from 728 to 500 now. they just modified my loan so that should help but but the citicard and lien are still there, i have three cards that are current never late. any thoughts. i heard of people who claimed bannkruptcy and bought a house 2 years later. i dont think i can do it that fast by fixing my credit.

I'm always happy to help a fellow San Diegan. What strategy you should use depends on how much debt you're talking about. Generally, what I would recommend is settling. With just those two items, no home in jeopardy, no wage garnishing or anything else - the debt's just sitting there - filing a Ch. 7 would be like bringing bazooka to a rubber band fight. Plus, if you have any income, you'd end up in a Ch. 13 most likely, not a Ch. 7 (for which you have to qualify and they don't allow much of any income). The Ch. 13 will keep you in bankruptcy for 5 yrs.

Far easier and much less time is settle the debt - if the lien will settle that is. If it's a second mortgage lien, then visit tomeason's thread on Settling Your 2nd. He and I along with several others provide some tips on negotiating settlements with creditors. The advice is applicable to pretty much all settlement situations. Read the whole thread and take some time doing it. There is not real set path to ultimately settling - you've got to adhere to some basic principals and see where it all takes you. Once everything's done, keep your credit payments timely and balances low compared to limits and take out some new accountts. Your credit should be fine eventually. Good luck!

[sandiegosub]

thanks for the info surf you always have great advice and i have put your words to action in this forum over the years
everyone was telling me to file bk but im going to try and settle citi and the lien even tho its 6 figures. if they dont settle then i will bk
and stay in this house for 5 years since they "say" "i am approved for loan mod"...i refuse to relax until i have the final papers and trial is complete, heard to many horror stories after trial payments to prematurely celebrate

[Kensington]

Hello, I was reading this thread and curious if sandiegosub had an update? I received my loan mod - but struggling also w/ a HELOC over 100K and about $25K in CC/IRS debt. I sought the advise of a BK attorney and he claimed filing a 13 would strip the lien but I'd be on the hook for 5 years of payments that I can't afford really . . I worked so hard to negotiate my 1st, want to keep my home but wondering now what makes the most sense. I live in Orange County. Owe $596 - house was going to short sale for $550. Still have the second out there. Took a cut in salary - hoping I can earn more again soon or wonder if I should get a second job on top of my 6 figure job. The stress of not knowing whether to hang on to my home or let it go for a "fresh start" . . any ideas? Thank you.