Has anyone tried credit card relief before filing Ch 13? Husband keeps on

[Buffy2018]

telling me that he hears advertisements on the radio and thinks we should look into that first. Any opinions or anyone tried it, how does it work? TIA

[5yrplan]

You can try this place http://www.consumercredit-dm.com/ they are a legit non-profit.

[LadyInTheRed]

It doesn't hurt to look into a "debt relief" program. But keep in mind that a lot of people come to BKforum after having tried one and regretting it. They sometimes spent years on a program only to file bankruptcy anyway. Also, keep in mind that these programs are as bad on your credit rating as bankruptcy. If you decide to use one of these programs, make sure you understand the details of the program, which debts are included and will be 100% paid off at the end of the program and how much of your payments go to payoff debt and how much to pay for the program.

[Buffy2018]

Thank you!
I honestly want to file Ch 13 and it be done in 5 years. I am still in the process of getting all the paperwork they need and it's a lot! I know in the future I will have a lot of questions and thanks so much for the quick replies.

[AngelinaCat]

We tried to ask for forbearance from our two credit cards. We would be willing to pay on the principal, IF they forgave all the interest and penalties. NO GO. They insisted that they would have the payments for the full amount, or nothing. We filed BK and they got nothing.

We tried for a CH13, but when I lost my FT job while we were preparing for that, we had no choice but to go with a CH7. It ended up being the best choice for us.

Good luck to you!

[boomer2298]

You will have to pay income tax on any debt relief. Nothing is free.

[RetiredArmy]

Been there done that got the ULCERS to show. Most of these companies are subsidized by the Credit Card Companies. Now you can try the Dave Ramsey Debt Relief Financial Management Course. Try googling it then send them questions. This helped me while I was already in my current now waiting for the discharge phase. Paying CASH for emergencies and big ticket items is great and it does work. It also requires the family to look at credit and cash differently.

Plus using these Credit Relief Agencies has a down side when you file your Federal Taxes. The balance that was forgiven is still considered income by the IRS and you can have a DEVASTATING FEDERAL DEBT!

[Chrysalis]

Interesting that this thread was brought up today, when I was just reconsidering a DMP with CCC (which I've never looked into and honestly would probably be a dead end for us anyway). Angelina, I just endured my father going on and on about how I should call everyone we owe and try to negotiate before filing. The idea makes me want to barf. Even more than the idea of bk. That's a long list of creditors to jack around with, just for them to refuse to deal.

[LadyInTheRed]

It is true that the amount of debt forgiven in a settlement is taxable. But, there is an exception if you are insolvent, as defined by tax law. If you settle with several creditors, you may be insolvent at the time of the first settlement, but by the time you are done some of the forgiven debt could become taxable. The insolvency determination is made separately for each debt, based on assets and liabilities immediately before the debt is forgiven.

The more creditors there are, the less likely you will be able to settle with enough of them to avoid BK anyway.

Chrysalis, If the topic comes up again, I suggest you thank your father for his advice and tell him you will consider it. Then, stop talking about your finances with him.

[Chrysalis]

Ha, Lady, I texted him later after that conversation & pretty much said exactly that. "Thanks, I understand you are trying to help, but there's not really anything you can do, so I think I should not bring it up again." Pretty much. ;)