If your credit score is already ridiculously low and only getting lower as your debt accumulates, why do?

jessalex: If your credit score is already ridiculously low and only getting lower as your debt accumulates, why do?
people advise against filing bankruptcy because “it will ruin your credit score”?
What do you do if you just dont have the money to get out of debt and you have LOTS of it and the interest just makes it worse and worse?
The icing on the cake is that it actually costs you at least $ 1500 just to file for bankruptcy. What if you can’t even afford that?
If you file bankruptcy then yes, it will be on your record for 7-10 years. But if you just remain in debt that you physically can’t pay back, wont that remain much longer? It will just never go away.

And to top it off, jobs run background AND credit checks now so we can’t even get jobs that pay enough to afford to pay back debt on top of regular everyday expenses.

Answers and Views:

Answer by rgirg
nothing last forever. even neg. info on your credit report.
this year i have 2 neg. items leaving my report. 1 next month and 1 in aug. that will leave me w/ 3. however i have 2 student loans and 4 credit cards perfect payments. now if i can just lower the balance on 2 of those cards. it can take a while to get it all straight but you can do it

Answer by RantingLover
I worked at a large bank in the existing credit department, so I can only tell you why we encouraged people not to file bankruptcy unless they exhausted every other option.

When looking at a credit report (and no speaking to the owner of said credit) bankruptcy is the ultimate failure at handling debt. It looks like you are not able to handle credit, cannot work out solutions if something bad happens, and don’t take enough care to have back up plans.

Someone who extends credit doesn’t know if you’ve taken steps to rectify your situation. Do you have a steady income, savings, investments, lower debt, better understanding of credit?

Contrary to popular belief, if you file and discharge a bankruptcy before you’ve gone delinquent you’re score won’t be hurt. Because you haven’t technically paid late. So, it ruins your credit, not your credit score. But, of course, by the time most people file for bankruptcy they have gone delinquent.

The important thing to also note is that even if the actual bankruptcy falls of your credit file, there will still be that 5-7 year lack of new credit that gives it away that bankruptcy was filed. And that will be used against you.

It really depends on how much debt you’re in, what your time frame is for getting in a better financial situation, how much credit you need in the future, etc.

Sometimes the only situation is to file for bankruptcy, but it should honestly be your last option.