Q: My husband and I filed bankruptcy in 1999. Unfortunately, we have not had great credit scores since this happened. We are currently struggling to pay two credit cards [which are] over the limit. We were considering a debt consolidation program, but we were unsure of how this would affect our credit score. If we take this route, could you possibly recommend a reputable company? Also, in 10 years, will our bankruptcy completely disappear from our credit reports?
— T. Lavender, Via the Internet
A: Since your credit cards are not in good standing, it may be somewhat difficult to get a consolidation loan at a favorable rate. Therefore, I would recommend that you take drastic steps like cutting up the credit cards to ensure you stop spending. Don’t close the account, however, because you want to keep the credit established. Then call the credit card company to see if there is anything that you can work out to get ahead of the late payments and fees.
Explain that you are trying to re-establish your credit rating but are finding it difficult to make even the minimum payment. As far as the bankruptcy is concerned, it will stay on your credit records for seven to 10 years from the date of the last activity. For more information, read Credit Repair: What the Credit Repair Industry Doesn’t Want You to Know by Richard L. DiMaggio (Consumer Press; $12.95).