Pay off debt or declare bankruptcy? Good & Bad Credit

[disneysteve]

2) Is there any advantage to contacting the original creditor to pay them directly as opposed to paying the collection agency or will that just complicate the issue?

Once the debt has been sold to a collector, you need to deal with them as the original company has removed the loan from their books at that point.

[DebbieL]

Sometimes I'm very grateful to be Canadian. This is just so unheard of here. I would hate to have to worry about paying off big medical bills. I wish you both the best of luck, and better health for your DW. I know Crohns is no fun. I know a couple people who suffer with it.

[Eric80]

You also have the option of a debt consolidation, if the medical bills are on different policies? I would say start to tackle them together as now you are married now and one entity. I would not use all the saving at once because there are future medical bill in the future and you never know when you will need the cash?

[HousingCounselor]

Hello.
Medical collections can stay on your credit report for up to seven years after they've been paid. However, I've never heard of paid collections being on there for that long. Congress is looking to pass a law that will make paid medical collections over $2500 each be removed after three months. Also, most creditors don't care about paid medical collections that are left on your report regardless of what it does to your score. In fact FICO is looking to re-vamp the scoring formula once again to reflect that in your credit scores. It used to be all collections were created equal. A $5 overdue fine from Blockbuster was just as detrimental to your credit as an auto repossession. Now they're changing that especially with medical collections. Anything under $100 won't be factored into your score at all.

I would see if you can get settlements or work out payment arrangements with them and leave the savings for if you lose your job or have to cover an expense that can't wait to be paid in a monthly arrangement like a car repair, furnace repair, or something like that.

[Eric80]

whatever you do, Do not declare yourself bankrupt! this will go against you for the rest of your life and credit rating will be non-existent!
Maybe you should go and speak to a debt advisor and maybe consolidate your debt or maybe get an IVA debt management plan, i think this is definitely a better option then declaring yourself bankrupt!

[Eric80]

What ever you do, try and not declare yourself bankrupt as this will affect everything - maybe consider going to see a debt advisor where they can advise on the best way to deal with your debt - either by consolidationg your debt or through IVA - definitely look into it.

[Weird Tolkienish Figure]

whatever you do, Do not declare yourself bankrupt! this will go against you for the rest of your life and credit rating will be non-existent!

Ridiculous reply. Search the internet, bankruptcy certainly stings, but it doesn't "go against you for the rest of your life". Some people see their credit rating improve amazingly quickly after bankruptcy. Look it up.

[sv2007]

Ridiculous reply. Search the internet, bankruptcy certainly stings, but it doesn't "go against you for the rest of your life". Some people see their credit rating improve amazingly quickly after bankruptcy. Look it up.

Bankruptcy can be with you your entire life because there's more to life than your credit report. Many applications ask if you have EVER files for bankruptcy, without a time limit.

In any case, bankruptcy exists to give people some hope and a fresh-ish restart in their financial life. It is an option.

But remeber that some people will judge you negatively on a character level if you don't pay back everything owed even after a bankruptcy and without a legal obligation.

[DaveInPgh]

But remeber that some people will judge you negatively on a character level if you don't pay back everything owed even after a bankruptcy and without a legal obligation.

Including cable bills?

[bjl584]

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