Question

I just found out my husband has bad credit and a lot of debt in his past.  The collections bills are now starting to roll in and we just had a debt collector come to our door the other night for 8000.00.  What are my options?

Blake H.

Answer

Blake

Sorry to hear about this but this is a common problem in marriages; spouses bringing in old credit history into the new marriage.  It is very important for you both to sit down, talk about your combined financial picture and work out a plan together.  Above all, keep communicating to each other!

As far as the debts go, you have a few options…

1)      Debt Acceleration.  If you get on a spending plan together, you may see you have extra money coming in each month.  If you do, start applying this extra monthly month to one of these bills.  Once you have paid off one, apply all the money that was going to the now paid off account and apply it to the next bill.  You can continue to do this until all your bills are paid off.

2)      Family and Friends.  It is getting more common now to borrow from family and friends.  If this option is available, make it official.  Sign a note with them that clearly spells out the repayment terms and the interest rate and by all means pay them back on time!

3)      Credit Counseling.  There are non-profit companies out there that can renegotiate the payment terms with your creditors.  They will draft your account once a month and handle all of the re-payment process.

4)      Debt Settlement.  There are agencies out there that can negotiate a settlement for less than full balance of what you owe.  This could be a good way to save money on some old debts.

5)      Bankruptcy.  If all else does not work, bankruptcy may be an alternative.  You would have to meet with an attorney in your state and discuss whether a Chapter 7 or a Chapter 13 would help in your situation.

Blake, if you would like to have a free referral to a debt specialist, give us a call @ 800-445-8540 and we can match you to a reputable partner.

Good luck.

Candice

Question

In 2000 I needed to file a business bankruptcy but since I was self  employeed I had to file a personal bankruptcy.  Since it has been  7-years what can I do or can the bad ding on my credit be taken off?  Thank you in advance for your responce.

J.R. H.

Answer

J.R.H.

According to the Fair Credit Reporting Act, a court record can stay on your credit bureau report for UP TO 10 years.  In the case of a chapter 7 bankruptcy, the 10 year time frame would begin at your discharge date.

So, unfortunately, you still have time until this is removed on its own.

If you feel anything on your report is misleading, unverifiable, inaccurate or obsolete, you have the right to dispute those items and they could be removed prior to the maximum time outlined by the Federal Statue.

In addition, many creditors look at the last two years of credit history.  So it is important to pay your current bills on time, keep you balances low, keep your inquiries low and have a healthy mixture of credit.

Hope this helps.

Candice