Debt Consolidation or Bankruptcy?

My live-in-fiance has HORRIBLE credit, & as of right now we are renting & financing 2 cars. Everthing including credit cards & cell phone contracts are under my name, eventually we want to buy a house, but either way we need to fix his credit. Alot of the debt is unpaid hospital bills (was unemplyed for 8 mnths & in those months he got very ill & no ins.) and some of the debt are from when he was younger & abused credit cards.
He owes a bank $800 & now cant even get a back account under his name.
I would say 1/2 of his debt is from 8yrs ago & the other 1/2 (hospital bills) are current.
My question is should he try to consolidate the debt or just file for bankruptcy. His medical bills are about $12,000 alone. Misc debt is about $5,000.

I suggest you both get on a plan to get out of debt. Him filing for bankruptcy won't help you both get a house and debt consolidate or relief programs can look like a bankruptcy.

He needs to learn how to deal with the creditors. I hope he is OK now and I it sounds like he has a new job.

I suggest a couple things, First read "The Total Money Makeover" by Dave Ramsey, he has a great plan with dealing with creditors and how to get out of debt and how to buy a house and how to save, etc. Next, if you are thinking about getting married both of you attend FPU, Dave Ramsey's 13 week program about financial peace and get on the same game plan with money. He also has a syndicated talk show each afternoon, you can find a station near you on his website or you can listen to it live (or archived) on his website.

If his only debt is $17,000 he should be able to get out of this in the next 2 years, if you both concentrate and work with intensity. Both of you may look at selling the cars and getting cheaper ones just to get through this.

BTW, renting is fine. Eventually you should want to buy a house/condo, etc but if you are debt and buy, you will get in more debt because something will break and you won't have the money to fix it. Take it from someone that has been there, done that!

Good luck!

You can visit http://www.cashguru.info and find very useful tips and several articles on debt consolidation. Report It

Get valuable tips on debt consolidation from http://moneymentor.cashmatter.... . It's a very useful website. Report It

Consult any bank

First off, get his current credit report. If 1/2 of his debt is from 8 years ago, they most likely cannot legally collect due to the statute of limitations. Plus, this debt should be off of his credit record b/c it has exceeded the 7 year limit. Next, you need to determine how old the other debt is. Go to http://www.creditinfocenter.com/rebuild/... There is a lot of helpful information. If at all possible, stay away from bankruptcy. Debt consolidation will also lower his score further, but those places can't do anything different than you can but you can do it for free.

If you're gonna do debt consolidation, you might as well do a bankruptcy. It has the same effect. This is what the lawyer told my parents when they filed bankruptcy. There is no statue of limitations on a debt owed. You can't just not pay it and think it's going to go away.

He should consolidate the debt and pay it off. Bankruptcy is just a way to get out of taking responsibility for his actions. He may get out from under the debt but the debtors just pass their loss onto other consumers - you and me - who end up paying more because he played the deadbeat game.

Don't file bankruptcy. Call your creditors and try to work out payment arrangements. Most will take something over nothing. Attack the smallest bill first. Debt consolidation can make small bills drag out for a long time. Flip hamburgers, deliver pizza, babysit, have a yard sale, do what you can to earn any extra cash you can, to help climb out of this cycle.

Future creditors will respect you more for trying through payment plans than for taking the easy way out with a bankruptcy.

Don't file for bankruptcy until you read this: it will change everything for you: http://worknearn.niesong.hop.clickbank.n...

I'm to tired to go into details but an easy way to see how bad things really are is to talk to a mortgage broker have him pull his credit and take a look. He will tell you whats still hurting him and what he really needs to pay to help his fico scores go up.

One more thing you should know.
To buy a house your going to have to show two years constant employment in the same field.

Three open trade lines one more than 5000 and two at least a 1000.

With most National banks like Option One a max debt to income ratio of no more than 50 percent ie your house payment and other credit card and car payment add up to only and no more than half of what you earn a month.

They will turn their back to medical bills any any debt more than two years old. Tax leans or any judgment are a another thing they must be discharged period.

Good Luck :)

Bad credit is one of the worst problems to have... however there exists a solution.

I will hereby talk from my personal experience.

I did debt consolidation a couple of years ago, however If I had to do it again I would pay to some minor details,
if someone wants to get out of debt today it is pretty easy with a debt consolidation plan, however it may get a bit tricky at times, I suggest you get as much information as possible online on this first,

a good place to start in my humble opinion is astraight to the point ebook with question and answer I found :

http://umgarticles.atspace.com/debt-cons...

if it helps kindly remember me in your voting!.. cheers!