BK vs. sticking with charge offs ????

[crusheroz]

Washington!! Have a question about my current credit issue. I have 2 charge offs on my credit report, and I am in debt to my butt. Since charge offs are on the credit report for 7 years, would a BK make that much more of a difference? Can I recover from these charge offs? We have been thinking of BK and not sure what to do. If our credit is screwed with these charge offs on it, would it make sense to go ahead and file BK.

 

[racer72]

I just had a client have a judgement for a debt that was charged off 9 years ago. Just because the original creditor has stopped collecting on the debt does not mean the debt is gone. Just acknowledging the debt over the phone will start the clock ticking on the statute of limitations again. And it is possible for the the debt to be on your credit report forever, not just 7 years. Bankruptcy will remove all doubt about the debt. Plus it is actually much easier to reestablish credit again after a bankruptcy than to have charge offs or collection agency claims on your credit report.

 

[crusheroz]

Thank you!! We have 2 charge offs. One is paid and the other is being paid on. We have decided to file for BK, just dont know which one yet. If we file Chapter 13 can any of the debts be discharged like in a chapter7?

 

[gottago]

1) In the vast majority of states, a 9 year old debt in would not be enforceable in court, since the statute of limitations would have run out years earlier.

2) acknowledging a debt after it's been charged off does not start the 7 year clock over again. After a debt is charged off, the only possible way it could be refreshed is if payments were started again.

3) filing bankruptcy on debts that are outside the statute of limitations is a bad idea. The only reason to file bankruptcy on large debts is if you have the possibility of having a judgement awarded against you.