Can you please let me know how to fix my credit and buy a house?

I currently owe 38,300 in debt. My credit score is bad. I am thinking of declaring bankruptcy is it worth it? After I do that can I buy a house? How long would it take me buy a house after declaring bankruptcy? If I decide not to declare bankruptcy is it better to pay off my debt or not? How can I negotiate with the creditors? I am 25yrs old and single with 3 daughters. Any suggestions... I tried buying a house tru leaseoptionhomebuying.com. but then I kind of not trusted the program now I have no idea what to do. Any suggestions. Serious answers only. What would be my first step?

Public Comments

1. Your first step is to find a credit counseling organization - most are free or low-cost. You will have to pay off your debt or get it forgiven before you can buy a house unless you make enough money to finance the house and pay off the credit cards. If you declare bankruptcy, you'll probably have to wait around 10 years before buying a house. See the credit counselor and go from there - you'll need to be very patient though. Good luck.
2. Contact a local debt consolidation agency to get your budget on line and let them contact your creditors to make payment arrangements to start paying off this debt. It may take a while because there is not quick fix, but bankruptcy looks worse on your credit record than a failure to pay or slow pay. In todays economy I am sure you are not the only person in this type of situation. Good Luck.
3. Just about any mortgage you would qualify for would be for high-risk borrowers...which means high interest rates and other unfavorable terms.... I'd advise to forget about buying a home for now....With your current situation your dream of owning a home would very likely turn into a nightmare. Without know specifics of your income it's hard to give more concrete advise. Regarding bankruptcy, there are a lot of people out there who will tell you that you should NEVER file for bankruptcy.. for any reason. This is not true. It's unfortunate to have to do make this decision, but sometimes it is necessary. Do what is best for you.
4. What kind of debt? Credit cards, installment like car... File Bankruptcy and you are done for 2 years before you can buy a house. Can family help you reduce that debt? Call the creditors and ask them to reduce the interest most will work with you. Watch out for the ads that promise they can fix your credit that is bogus. Good luck.
5. Bankruptcy is not the "quick fix" everyone thinks it is. It stays on your Credit Reports for 10 years (public records). Also, due to recent Bankruptcy Law changes, many debts are not "dis-chargeable". So you will have damaged your credit for the next 10 years anyway, AND still have to pay most of your debts! Negotiating with your existing creditors for a reduced interest rate while they "suspend" your charging privileges may be the best option for you. P.S. As a single mother...........do you really want the "head-ache" that comes from owning your own home?? Maintenance on a house, repairing ANYTHING and EVERYTHING that breaks.........while keeping up with the yard work.........it's a lot to take on when you don't have to if you can find a good landlord to rent from. Good Luck.
6. My advice would be to go to my website first. I was in a similar position and I know what credit repair is like. Your asking a lot of questions here and i can't give you answers here because of limitations on space! I will however recommend you get a free copy of your credit report if you haven't done so already! Examine it for errors and accounts you don't recognise!
7. Contrary to what others may say, sometimes Bankruptcy is the "right" choice. If you already have very poor credit, filing would probably not hurt it that much more. Your best bet is to set up a free initial consultation with an Attorney and he will be able to tell you your options. I know what your are experiencing. ( I am a homeowner though) I had 62k in CC debt and all cards were at the default rate of 32.34 percent for the past year. I argued and plead with them and they would not budge. I had flawless credit with a score of 702 but due to high balances on the cards, I was at their default rate. I paid over 20k in payments in the past year and brought the balances down by about 2k. I finally gave up in 8/07 and stopped paying. You will get alot of calls from the creditors. It's a hard decision to make. I then spoke w/ an Attorney and just recently filed Bankruptcy. I can't tell you how much at ease I am. Sadly, after 2 months of not paying, each one of my CC companies have now offered me 0 percent interest for the duration til the balance is paid. That was after not making any payments for 3 Months. I had pleaded with them all for the past 12 Months and they wouldn't budge as I was making all my payments on time with the high rate. I have now referred them all to my Attorney per his request. If they had only given me that 0 percent rate 4 or 6 or 10 Months ago........ Now noone wins. They will get nothing and I will have damaged credit. Bottom line: Sometimes you have to make very critical decisions; if those decisions will get you back on track, then they were the right ones. Filing will not ruin you. Trust me. Speak with an Attorney as you have nothing to lose. I fought this for 3 years and kept paying........ Sometimes, you have to realize you made a mistake in life and move forward. I cannot tell you how much at ease I am after doing this. Partially, because I know I have pretty much paid all the accounts in full in the past years based on the interest rate I have been paying. Everything went towards interest and my balances are pretty much the same. The CC companies can look at it as they may: They got their money back already. I always bashed people who got into financial trouble over the years and it now happened to me. Admit your mistake and move on. It's not so bad. You WILL have a house someday and I will keep the one I live in currently while getting rid of the debt I have/had. I hope this helped.
8. Get your reports, check and dispute inaccuracies, spend time researching repairing your credit ON YOUR OWN (dont get ripped off by credit repair companies), and have patience. Good credit takes time and you must PAY all your bills ON TIME and get out of debt. You are still young and can start over wisely. It will better in the long run than bankruptcy.