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Originally Posted by read52 This question of credit counseling has come up several times on my coupons. I did it but never had problems with credit rating after doing it. Several people say it messes up your credit. I just checked on line and in your credit rating it does not report if you were in credit counseling. In credit counseling you pay the credit cards etc off. Sometimes there is no interest but most of the time it is a lower interest rate. If you claim bankrucy, you do not pay back the credit cards etc. (correct me if I am wrong) Either way it takes 7 years to clear your credit history. After 5 years (when I had mine paid off) I started getting credit card and other loan inquires. Four years ago we refinance our mortage at 4.8% and 15 years. Then about 2 1/2 years ago we took a second on our house to fix some things in the house (also because the price of homes in our area went up alot) Again we had no problems. I would check into both a make a decision. I was always under the impression that bankrupcy was a last step and should only be done in extreme cases. Both my husband and I have high credit ratings. |
BK stays on your credit for 7 years (10 in some states), however, you are able to obtain credit cards, a mortgage, car loans, etc. all at a decent interest rate appox. a year after your discharge. I am a bankruptcy paralegal and see so many people that think credit counseling/debt consolidation is the way to go, but they still end up in over their heads and they are paying for years and years. If you are adament about paying the debt back and not discharging it in a BK, you can file a Chapter 13 and you pay back your debt over a period of 3-5 years with no interest and you only pay back the creditors that file claims. BK sounds much worse than it is, but my office files thousands upon thousands of BK's a year and it gives people a fresh start and most learn from their mistakes in the past. Again, BK looks better on a CR than credit counseling. Despite what you are reading online, your tradelines WILL report as included in a credit counseling repayment plan and while you are in that payment plan you will have a hard time obtaining insurance, bank accounts, etc. since these days those things are based on credit scores/reports.