So I'm considering just letting my credit card debts go unpaid till they close. (The goal was to find some way to pay it off but I need to consider the worst possible case)

The reason why I'm considering this is because I'm trying to AVOID declaring bankruptcy. However it seems when bankruptcy hits, your credit score is still 0 whether or not you tried to fight until you absolutely have to declare bankruptcy.

My question is actually whether either is worse than the other, rationally or numerically?

My biggest issue is being able to pay off credit card debt (6 digits across multiple cards).

I'm a tech nomad. I don't have any large assets such as homes or cars. (I'm a city dweller where the rent is too expensive for any of us youngsters to ever own a home anyway.)

Update: in short, my question can be summarized as: does anyone know what the exact quantitative effect (and through time, rebuilding my credit afterwards) on these two options are on your credit score?

Here is what I understand:

Case A: I miss a few payments to try to figure out a way to pay or to reach a settlement. My credit score goes down, but does not hit 0 unless I absolutely need to reach Case B.

Case B: Bankruptcy -> zero instantly. No fighting chance.

Is there any effect on the way my credit can rebuild from the two options above?

  • 1
    If you just don't pay, you will be getting calls & letters from collection agencies, for years. I would get them for a previous resident of my house (even though I had a different phone number - apparently they cross-referenced phones & addresses somehow). This went on for maybe a decade (and who knows how long before I bought the place): one collection agency would swamp me for months: I'd explain that I wasn't the guy, get a few months of peace, and the account would be sent to another agency...
    – jamesqf
    Apr 2, 2019 at 16:12
  • Is that all that happens though? I'm curious what debt you had? I heard they could do things like try to put lawsuits on you. But I guess when you have 0, what's the point of the lawsuit other than to scare you.
    – ina
    Apr 2, 2019 at 21:21
  • This was NOT my debts (I pay mine :-)), it was someone who had lived in my house before I bought it. The collection agencies apparently worked on the chance that the person might still be here....
    – jamesqf
    Apr 3, 2019 at 16:24

2 Answers 2


I'm trying to AVOID declaring bankruptcy.

Why? Your alternative of simply ignoring everything is worse because it leaves your current, already bad situation, state to linger.

However it seems when bankruptcy hits, your credit score is still 0

That's not true at all.

If you have a bunch of debt that you can't pay your credit is already terrible. If you just ignore these debts they don't simply go away, generally. At least some of your creditors will sue you and rightfully win. You haven't said much about your general financial state but if you've got no assets and $100k+ of unsecured credit card debt you may want to talk to a bankruptcy lawyer in your area.

After bankruptcy you'll have trouble getting leasing a car or getting a mortgage but you probably already have terrible credit and couldn't do those things now anyway.

There are three main chapters of bankruptcy, 7, 11, and 13. Chapter 11 is a restructuring and won't apply to you; 7 and 13 are the typical consumer options. Chapter 7 is a vanilla liquidation, your debts, generally with the exception of student debt and other debts that you reaffirm (a car loan you wish to keep paying) are discharged, you have no assets so there's not much else to consider. Chapter 13 involves a payment plan, you and the trustee will determine what your income after living expenses is and that amount will be paid to the trustee for distribution to your creditors for a term of, generally, 36 or 60 months. There's something in US bankruptcy called the means test. If you earn over the median income in your area you are not allowed to file a chapter 7 and must enter in to a chapter 13 repayment plan.

Filing bankruptcy marks an end to the discharged debt. From here your credit can improve over time. Simply ignoring your debts allows them to grow and linger over you.

If you're not missing payments now you're probably not realistically in bankruptcy territory, a chapter 13 would just have you making these payments anyway, and you should probably just suck it up, sell some of the junk you bought on your credit cards and work more.

Six figures of credit card debt with no assets is a spending and behavior problem.

  • i've missed 2 payments. i'm trying to figure out how to pay but things aren't coming together. the debt was accumulated through many years, nothing big in the last year. can you explain how bankruptcy is better than the first case? it seems that that is an exit that i can hit at any time when i've finally given up paying?
    – ina
    Apr 2, 2019 at 21:06
  • I understand the different forms of bankruptcy and have spent hours reading what is available for free online. I just don't understand exactly how it affects things from a credit score perspective. I'm going to update my question for a more specific angle.
    – ina
    Apr 2, 2019 at 21:17
  • Well, I mentioned talking to a local bankruptcy person because your hours of internet research have culminated with you thinking your credit score goes to zero if you file bankruptcy, which it doesn't. Again, the "benefit" [for lack of a better word] of filing bankruptcy is it marks an end. Piecemeal settling debts is not what your question originally asked, but yes, you can piecemeal debt settlements, and the settlements have a different negative impact on your credit report/score.
    – quid
    Apr 2, 2019 at 22:01
  • i have not been able to find a resource about what exactly bankruptcy does to your credit score quantitatively. supposedly it's 10 years before it's off your record?
    – ina
    Apr 3, 2019 at 0:47
  • it would be great if there is something like a creditkarma score simulator for debt issues like bankruptcy, settlement, and months late in paying bills (then somehow paid to date etc)
    – ina
    Apr 3, 2019 at 0:49

As said in the other answer, your credit will NOT go to 0. A decrease "between 100 to 200 points is expected".

But, "hose with good credit should expect a huge drop in their score immediately after filing for bankruptcy" (NOLO)

You credit cards will most likely be cancelled once your credit card providers are served with the notice of your filing.

How the credit score gets impacted is highly variable. You can read the experiences of others on Reddit at r/Bankruptcy and see all sorts of outcomes - some had increased credit scored because of zero credit utilization and no debts, some had 100 points less.

Some were able to get secured and even unsecured credit cards with very low limits (think $300) within months after filing, even before the discharge notice.

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