Which is worse on credit: Bankruptcy or a charge-off?

[Been_Ponzied]

We were victims of investment fraud and an ex-wife fraud. We finally were able to settle with two cc's, but Citibank refuses to settle so that's a $5,000 charge-off. If they sue us, and we file bankruptcy, which would be worse on our credit - the bankruptcy, or the charge-off (or a judgement)? We really don't have anything they could take except equity in our Harley. No home, no jobs.

[Radio_Guy]

Generally - Bankruptcy is worse...

You can always Dv and dispute a Charge off and clean you credit..

Removing Bankruptcy is much less feasible.

[Been_Ponzied]

I did do a DV (used a sample letter from here), and the collection agency ignored it! I better get back on it. How do I get it taken off our credit files?

Thanks - it's good to hear that BK would not be a wise choice. From what I hear about the new laws, we'd have to make payments on the debt even in bankruptcy because they make you go through credit counseling first.

[LadynRed]

The new laws are not in effect yet ! The bulk of the new reform laws do not go into effect until 10/17/2005. Except for the homestead exemptions provisions in the new law, any BK you file before 10/17 will be under the 'old' laws.

[Been_Ponzied]

That's good to know! Thanks!

[ghacorp]

Sometimes filing bankruptcy will improve your prospects and your credit score given the underlying debt is extinguished. If you having nothing to lose but the possibility of long term indentured servitude why not file bankruptcy? You need to understand that SOL or no SOL debts rarely are ever forgotten or forgiven. With no assets or income Citi will probably not bother to come after you unless they have done so already.