bankruptcy, debt settlement

settlement and charge off or BK?

Here’s my situation:

  • I have 2-3 credit cards that have been charged off.
  • I have 2 more that will charge off very soon. One of them is offering me a settlement of 20%!!! That’s about $1400. This is a major bank where I do all my banking. Will it make a difference in my future to take care of my accounts with them even if my other creditors and my credit rating are bad?

The other one may settle but it will be a lot ($6000?)so that will probably just charge off, too.

  • Is it worth it to settle? My credit report will look terrible for 7- 10 years. Is it less terrible if I take 6 months to settle one account, and the others are charged off? Or, less terrible to file for BK?
  • Filing for BK means that in 3 months the clock will start ticking on the 7-10 years. If I settle, it’ll be another 6 months.
  • I have other debts too ($1000 to a medical clinic, for example).
  • BK costs about $1400, so will be less expensive than paying off some of these others.

I think the answer is BK, but I just didn’t want to have to go that route. Does that make sense?


National Public Radio, did a program on bankruptcy last week. I am sure there is a transcript of the show at their site. If you do a search I am sure you can find it. It may help you make a decision.