Posted on June 17, 2009 at 6:11 am Hello destroydebt people, can you advise on how to get out of debt without ruining one's credit? I've heard that bankruptcy would definitely do that, but what if you need its automatic stay protection. I mean how else can you get out of debt and not fall into prison too?

Posted on June 17, 2009 at 6:17 am I suppose it would depend on your financial situation? But since you already mentioned the automatic stay and prison...I assume that you are referring to a scenario in which the debtor has already received a lawsuit form the creditors and even then, you can't just go to prison, unless you are convicted of a crime. The worst that can happen, is the creditors obtaining a judgment against you. I say...negotiate. That is the best way to get out of debt without ruining your credit.

Posted on June 17, 2009 at 6:24 am I agree with rasputin. The first thing that one can do to avoid ruining one's credit is to negotiate. Never run away from the creditors, even if you think that you do not have enough resources to repay. You'd be surprised as to how accommodating they can be to an honest consumer. If you are uncomfortable disclosing your real financial trouble in this forum you can always discuss it with a debt expert. Fill out one of those forms and find out what your options are according to your financial standing. Don't worry consultation is free.

Posted on June 17, 2009 at 6:31 am Hi idonothookup, welcome to destroydebtforum!If it is credit card debt that you are trying to get out of, I agree with both rasputin and iamfyodor, that you must go straight to your creditor and try to work out a deal. What you can do is ask how they may be able to lower your payment somehow. Ask them if it is possible for them to freeze the interest rate so you can pay down the principal amount, you can also negotiate the terms of the payment or the have the period extended. It's important to not lose touch with your creditors.

Posted on June 17, 2009 at 7:38 am Getting out of debt without "ruining" your credit is a very vague concept. The only way to get out of debt without suffering some repercussions to your credit is to pay off all of your balances in full. I am assuming that is not an option for you based on your original post. As previously mentioned, you should try settling your debt with whoever is collecting on the account(s). If you do not have the money for a settlement you should see what your options are for a payment plan. I understand that most law firms will typically arrange payment plans between 2-5 years depending on your financial situation and who the original creditor is. Now, settling your debts will have less of a negative impact on your credit than filing bankruptcy would. For example, a settlement remains on your credit report for 7 years from the date the account was settled. Chapter 7 and Chapter 13 stay on your credit report for 10 and 7 years respectively, as well as on your public records for 20 years. A settlement looks a lot better since it shows you took the initiative to pay back some of the owed amount without filing. But a "settlement" on your credit report should not be confused with a "paid in full"- it is still a negative mark, as it demonstrates the person's inability to repay the full debt amount. If you need to get some help settling your debts, feel free to fill out a form on DestroyDebt.Com to get matched up with a qualified provider.

Posted on June 17, 2009 at 2:30 pm

Posted on June 17, 2009 at 3:02 pm "Most people who file bankruptcy don't change their habits and end up right back in bankruptcy." First of all that is entirely untrue. A lot of people who file bankruptcy rebound quite well and regain control of their financial situation. Secondly, what about the people who had to file bankruptcy as a result of a genuine hardship- such as a job loss, medical issue or divorce? I agree that bankruptcy should be avoided but for some it is the only option they have. Please stop advertising here, it is not the purpose of the forum.

Posted on June 17, 2009 at 3:19 pm Honestly- cashking sounds like one of those guys who thinks it is a person's moral obligation to not get any help to resolve your debt issues.  

Posted on July 10, 2009 at 8:05 pm

Posted on July 11, 2009 at 10:13 am Ok so the bottom line is it is tough to get out of debt without ruining your credit right? That was the original question.