Bankruptcy or Collection Accounts?

Hi here are my financial details. I lost my job and will not have income for mult months so working with my creditors is not an option. My total debt is 9k over 8 accounts so I will have 8 accounts in collections. I am debating between just leaving them in collections or filing bankruptcy. I am looking for the solution that will put me in the best position 5-7 years from now. I am leaning towards leaving them in collections and here is my thought process...... I do not owe more than 2k on any one single account and I have no property to seize making it unlikely that collection agencies will seek any legal action. I will just have to put up with the phone calls. Do you agree with my logic or should I file BK? What will repair my credit the fastest? I just checked my score and it is at around 600 with half of the collection accounts already processed. Thanks! Thanks for the answers but I am really looking for somebody's opinion if they would just leave the accounts in collections or file BK. The accounts are in collections so debt consolidation does not work for me and to be honest I have studied the issue a bit and found out that it does not help your score one bit to pay a collection account. It will actually hurt your score if you pay a collection account because the creditor will update your account as paid and the collection account will stay on your report 7 years from the day they last updated it. So if in theory it takes me 3 years to pay the 9k I will have these items on my report for 10 years. If I just let them sit in collections for 7 years from today I will be better off in the long run right? My feelings are that I own no property and my debt to each creditor is less than 2k so they wont pursue me other that call me daily. Please give me your thoughts....Thanks!

1) Keep in mind that filing for Chapter 7 is not free. It will cost you $2,000 on average....the exact cost varies by region. If you had a spare $2,000 lying around, then this money would be better spent making your minimum payments or paying down/settling the debt. - Most BK attorneys will tell you that $10,000 is the min. amount of debt that anyone should consider filing for Chapter 7. While $9K is a fair amount of debt, it is not a financial emergency and as stated above, the $2,000 or so filing fee would be better spent making payments on the debt. Not sure how far past due you are right now: Creditors won't consider legal action until you've gone way past due...like 4 months at least. If you are current right now, you have a window of time to turn things around and hopefully you'll get another job to where you can resume payments. - Its very important that you make your creditors aware that you're out of work right now as this "may" discourage legal action in the future. - If your creditors do not offer you any hardship programs, then consider NFCC, assuming this is credit card debt: http://www.nfcc.org

2) Prior to filing it, you must be aware of the harmful effects of bankruptcy. Your credit score will be greatly damaged, in case you file bankruptcy. If you need loans later, getting them will be lot tougher. But in case, you manage to get the loan, it will have high interest rate. Try debt consolidation.

3) I don't have an answer, I'm just responding because I'm in a similar situation and would also like to see an answer. I have 9 accounts and $11K in debt. I've been unemployed for a while and haven't paid on ANY of them in 8 months, mostly all have been charged off and are in collections. I, too, would like to know the best route to take: saving to pay off the debt or bankruptcy?



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