Legal Question in Credit and Debt Law in California

CC's in collections nearing or in charge-off: bankruptcy?
I have 5 major cc's and 3 retail cc's, all with balances under $4k and together totaling less than $10k. at the end of december i will be able to pay off two or three of the smaller balances.

i've been notified that 1 is charged off and that the others will be within a month. each CC will settle for 1/2 the balance owed or set up a new payment plan. however, the amount i am able to pay on each per month is not enough for any of them AND they can only set up ACH payment plans (my credit score is too low to get a checking acct.)

with individual balances as low as they are, is it worth it to file chapter 13? is it worse to have 5 charge-off's on my record for 7 years? and am i likely to be sued for less than $3k or have my wages garnished?

because i could settle everything for $5k i feel like the situation is ridiculous. and no, i cannot borrow that $5k from family, friends, work or otherwise. i also have nothing of value besides a car which is still upside down.

my credit is already ruined. at this point i am more concerned about potential legal action against me.

thanks :)

Asked on 12/01/04, 4:30 pm

2 Answers from Attorneys

Roy Hoffman Law Offices of Roy A. Hoffman

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Re: CC's in collections nearing or in charge-off: bankruptcy?

If your credit is already ruined, in my opinion, you should consider talking to an attorney about filing a Chapter 7 bankrupcty. In a Chapter 13 all of your debts must be repaid (according to what the court determines you can pay). In a Chapter 7, all of your unsecured debts (i.e., credit card debt) will be discharged, which means you will not have to repay those debts. The debt you owe on your car will have to be "reaffirmed" and payments must be kept current in order to keep the car.

Answered on 12/01/04, 7:39 pm

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