Letter to “Ask Leon”
How long does it take for respectable credit to be established after agreeing to repay delinquent credit on a number of long past due accounts in order to be able to get a reasonable refinance rate on a home mortgage? I’m wondering if bankruptcy is worth considering under the circumstances and need to know what debt other than a home mortgage or sufficiently valuable tangible such as a car can be eliminated when no income will be had for the foreseeable future due to disability. Specifically ,is a divorce decree of monetary reimbursement eliminated(not alimony–no children involved)?
A divorce decree requiring you to pay money to your former spouse is not dischargeable in Chapter 7 bankruptcy, but might be in Chapter 13. See, http://www.debt-relief-bankruptcy.com/faq-browse11-14/bankruptcy-guide.asp for some introductory info about that. If you want others to consider you a good credit risk, you have to make yourself credit worthy. Stop borrowing more than you can comfortably repay, and get a steady dependable source of income. If you are already drowning in debt, consult a good local bankruptcy attorney for advice to find out if your assets will be protected if you file for bankruptcy and for other issues that may affect your case. Bankruptcy won’t give you instant good credit, but it might get you out of debt. After that, you have to earn good credit the hard way. There is no instant fix for credit that you have already ruined.I think that you are simply not going to be a good candidate for credit immediately, because as you say, you have no income. I don’t know what you consider to be a “reasonable rate” for a refer, but which costs more: Paying off your old debts or paying a higher interest rate on a mortgage? Are your old debts already barred by the statute of limitations? If so, agreeing to repay them, (without actually paying them) might revive the debts and put you in a worse position than you are already in. You really need to get to a good local attorney familiar with these kinds of issues right away.