Credit repair.

QA I'm presently going through a divorce and I'm unemployed. I resigned from my job in September '02 to do an internship and graduate from college. During this time, I was unable to pay my creditors and now my credit is a mess. Should I file for bankruptcy or do a debt consolidation? I cannot borrow from a bank or credit union. My debt consists mostly of credit cards and some medical bills. Please help me.

--V. Johnson Lisbon, LA

I wouldn't recommend a bankruptcy since it can remain on your credit record for seven to 10 years and further hinder credit repair efforts. Debt consolidation might be an option if you were gainfully employed. Since you're not, I'm not clear how you will make payments, even if they are reduced. Also, for debt consolidation to work, you would have to stop spending on the credit cards you wish to consolidate. In other words, don't create new debt while repaying the current debt.

If you have some income coming in, I recommend that you call the creditors and explain that you have a financial hardship. Perhaps you can make a deal to repay the bare minimum, for example $25 monthly, until your financial situation improves.

For more help, contact American Consumer Credit Counseling (www.consumercredit.com; 800-769-3571) for a free budget analysis and advice on how to get out of debt.--Tanisha A. Sykes