2.5 yrs since paying credit cards - should I still file for BK?

[sandiego]

Stopped paying credit cards June/July 2008 and by now (Feb 2010) the have been sold (probably numerous times) to debt collectors. Should I still file a BK?

[JvilleGarden]

Hi SanDiego. Welcome to the forum

My understanding is that the debt can (and most likely will) continue to show up on your credit report for 7 years FROM THE LAST ACTIVITY, meaning if it is sold to another collection agency, it shows as new activity, and the clock starts over. Also, once the BK is discharged, your credit score will start rebuilding, as your debt to income ratio and open lines of credit change, therefore impacting your FICO score for the positive.

Until you discharge the BK, you would still be responsible for the debt, and continue to have the calls, letters, and to deal with.

I hope this has been helpful, and wish you the best of luck.

[sandiego]

Thanks! The calls stopped back in late 2009 / early 2010 and once in a blue moon we would get a letter from the collection agency "negotiating" a payment plan. We have not responded to any of those letters.

Another question - Our attorney said to file a Chp 7 because over 50% of our unsecured CC debt was in support of a business (in-law) which has since filed its own Chp 7. Part of our HELOC was used in support of said business; can only a portion of the HELOC be erased under Chp 7 (e.g., amount incurred in support of said business)?