bankruptcy

What is the name of your state? Florida

If I own my home and have a lot of debt dues to a child illness and not being able to work am I better off doing bankruptcy or trying over time to pay them off. Most all the collections have been charged off but that doesn't mean they still don't call every day and send letters all time. Its about 20,000 in debt. I don't want my student loans included in the bankruptcy because they deffered my loans until I was able to start paying them back and they really worked with me. What should I do?

[Ladynred]

Bankruptcy is a highly personal decision. Medical bills are a key reason people file every day.

If you can't work, paying off that kind of debt will take you a LONG time and your credit will suffer the whole while. Bankruptcy will get rid of the debts in about 6 months ! The BK will stay on your credit report for 10 years, but its effects diminish over the years and rebuilding credit is actually much easier. Bad credit, as it is now, will stay bad for the next 7 years.

You can't include your student loans anyway, they're not dischargable. FL has an unlimited homestead exemption, so your home would be safe as long as you can make the payments.

So if the debt I have now is almost 7 years old should I just leave it alone or will they continue to try to get the debt paid off long after the 7 years. My son is almost five and most of the debt occured the year he was born so most of it should come off withing the next 2-3 years. Also, my car is a lease and it is in my dads name so they can't touch that either right?

[Ladynred]

Big difference now. The SOL for suing you to collect a debt is FOUR years in FL, FIVE for written contracts (medical bills MAY be considered written). If these old debts are more than 4 years old or at or near 5 years old, then you have no reason to file for bankruptcy. IF any of them do sue you, you use the expired SOL as your defense and the suit is dismissed, you don't have to pay a thing. If you can track down exactly when you last made payments on any of them, especially the medical bills, then you can determine when the SOL runs out.

Negative entries can only stay on your credit report for 7 years, yes. So if they accounts went delinquent 5 years ago, then they should drop off 7 years from that date.

Thank you so much. You information is much appreciated.