Settlements...Final and Future

[fltoo]

She definitely got a faxed letter each time before she put the money in the account for them to withdraw, stating that the money was payment in full.

Don't know how it is showing up on the credit report, as she does not really care about her scores. Her only concern was that she did not file BK and have that show up.

Good thing is, her attitude has changed dramatically. She will only purchase something if she has the cash.

She has two loans left, one fed student and one private. She knows she cannot do anything with the fed, but she just defaulted on the private one this month, and is going to try to negotiate a settlement with them in two months. Knowing it is a long shot, she is going to try anyway. She is also prepared to pay taxes on the forgiven debt this time if it gets settled, since she is no longer insolvent.

[BKINAZ]

I moved up my appointment and got another meeting with different lawyer (different firm) so that I can get some sensitive issues answered. I'd like to look at what she did...but it makes no sense if I have to pay taxes on the forgiven money. If I do...it's a no brainer.

So she litteraly transfered the money out of the account when she got the letter? I assume it is done like making any payment by phone?

[fltoo]

No, she opened up a separate checking account purely for the creditors.

She did this because she obviously did not want to give them her account where her paycheck is deposited.

It became apparent that they were more willing to negotiate if they could get a bank acct number and withdraw immediately. They hemmed and hawed when she said she would mail a money order since she was not willing to pay by a check from her regular account. (They would then have her acct number)

When a creditor settled, she would give them the "creditors" checking account number and then, the next day make an exact deposit of cash for the settlement for that creditor to withdraw.

She has since closed the "creditors" checking acct.

The bank where she opened up this account constantly questioned her about the large cash deposits, they have to report it. But, she figured she was doing nothing illegal, so she didn't worry about it.

On a different note, I got a call from my lawyer today. After waiting two years for a so called fraud..transfer to clear, I was filed as a chap 7 today.

I called her immediately and we almost cried tears of joy that, although we took different routes, we were putting all this behind us. We have been friends forever.

[StartingOver08]

Congratulations fltoo! You are filed! It should be smooth sailing for you now.

[fltoo]

Thank you sweetie. My lawyer said he has never seen such organized paperwork for a BK! lol

It is due to people like yourself and others on this forum that offered so much info. Mine looks pretty clean cut, so I am not expecting anything out of the ordinary.