At 26, you ought to know what "credit" means. Having a car or a cell phone to your credit would indicate that they are paid up to date - no debt owing on them. What it seems that you mean, but failed to say is the word "debt". You are "in debt" to those amounts. $25k is not enough to file bankruptcy. It would be a poor choice, if you qualify and you probably would not qualify. Overspending, does not qualify you. If you paying your debts monthly (big debts) and things were going smoothly and suddenly, you lost your job, leaving large debts, and you could not find another job for a year and only spent on necessities from that point on, then you might qualify. Irresponsible behavior will not qualify you. That said, bankruptcy will follow you for life, and your credit will be terrible for at least 7 years, but actually longer - for life, because it is of public record. The fastest way to fix your credit is to decide what you can pay every month toward both debts and do it. Make the highest payments you can and expect to have no luxuries until your debts are paid off. It will take a change of attitude and not buying, buying, buying for 2 - 3 years but, when you have paid off your debts, the cloud over your head, if you even feel it, will turn into relief, and it will be a good feeling. The sooner you pay off your debts, the less you will owe because interest on $25k - you are flushing a lot of money down the toilet. The sooner you realize it, the better off you will be.
Certified Paralegal, with 25+ years' experience.