Make a lumpsum Payment

[toby]

Hello Everyone
Is anyone in this forum have success to negotiate with the creditor to make a lump sum payment? How much percent of the debt should I agree to pay in lump sum?
I would like to go for the Lump sum option before going to file bankruptcy. Hopefully the creditor will agree with me and I will be free again. The only thing I decide not to file bankruptcy until now cause my major is in Finance and I am still in college, I am just afraid that the bankruptcy will affect my future career

Thank you very much

[possumfat]

Correct me if I'm wrong but if you make a lumpsum payment, lets say half of what is owed......the credit card company will 1099 you the remaining balance as income. Maybe this is OK in your situation ???

[toby]

Well, they only send 1099 for this year only. And I don't work that much. So hopefully I don't own the IRS that much anyway. Well, if I go 4 bankruptcy, in the future, I am just afraid that I cannot get any job whatsoever in the bank or financial field. Because most of the financial firm or the bank require to check your credit before they hire you.

[HHM]

Back the truck up for a minute, if you are going to file BK, why throw good money down the drain by paying it to a creditor. That makes no sense whatsoever. There is absolutely not benefit to you for making a lump sum payment to a creditor when you know your are going to be filing BK.

[CATCHMEIFYOUCAN]

Wish I had stuck with NOT paying creditors when I was getting ready to file. But the money is gone and so is my debt! I was worrying myself sick when I was getting ready to file because of the cash advances I had on my cc's and the new Bk laws about cash advances, etc. So while I knew I was going to file, I kept up the minimums (sometimes below) just to keep them at bay until I hit em' with the Bk card. I guess I was safeguarding myself from being accused of any type of fraud while in the process of filing. Maybe it worked!

Best of Luck, CMIYC

[juststupid]

Ok so I don't know much about bankruptcy, as I am just learning. But from the sounds of it you only have one creditor? And didn't really provide much information. So assuming you only have that one creditor than I think I lump sum would be a good idea - IF they go for it. But if you have more creditors than the lump sum would possibly be a bad idea and I would say just go for the BK, get it over now, and past you then learn from your previous mistakes.

As for being in college and getting a degree in the financial field... if they ask about the BK be upfront, tell them you were stupid and you've learned (hopefully you will) and then go from there. From what I understand of the laws You cannot be denied employement because of the BK.

[jal1129]

Who is the creditor and how much do you owe them? Maybe if we had those details if any of us have dealt with that particular creditor we could be more helpful.

[Minnymouth]

If there is only one creditor involved and they are willing to accept a lump payment to settle, you can afford to do it....... then there is no reason to file bankruptcy..... settle with them.....

Yes, a bankruptcy can affect your future employment in the financial field, depending on what your goals are......

You cannot be "denied" because of filing bankruptcy, but I'm sure you can be "OVERLOOKED" if they decide too......

[toby]

Well, right now I have several debts involving with several credit cards. One is Bank of America- $3000, one with Capitalone -$1200. 4 credit cards with Chase bank - total to $6000 One with Orchard Bank - $300. I am still in the process of deciding whether I should file for bankruptcy or make a lumpsum payment. I try to negotiate to pay like 50%- 60% of the debt.
Right now, I have very little income and no asset. So I think I am gonna be alright if I file the bankruptcy, it's gonna be no asset case 4 sure. But I am just worried about the future for my career opportunity.

[BKsuperman]

I'm in the same boat as you.

21 years old, college sophomore wanting to major in either finance or accounting.

I earned $6,000 in 2006.
and I have over $24,000 in credit card debt.

The only thing stopping me from my final decision to file is just that.


With that said, my advice is to continue with your career plan (which it seems you're doing --good for ya!) --I personally have contemplated switching major because of my bankruptcy. But now I truly see debt as a personal problem, no different than marital problems, or any other ordeal outside your career life.

My rationalization: I'm finding myself less and less motivated with school with the stress of having to pay my credit card bills. Additionally, I'm finding myself working more hours to make more money --which result in poor academic performance (ie. low GPA). SO, by filing BK, I'll quit my job and devote 100% effort on making excellent grades, and maybe doing some extracurricular activities.

So let's say in 3 years I graduate, along with Joe Smith, from the same school. We both apply for the same position at an accounting firm on the same day. Joe Smith has no credit history because his rich daddy paid for his tuition and everything else, but partied too much and suffers from a 2.4 GPA. I graduated with BK filed three years ago (but can tell the employer of how I rebounded, acquiring financial wisdom along the way) --and managed to pull a 3.2 GPA while holding leadership positions in school organizations.

I'm only 21 and have little knowledge of the career world and what employers prefer, but my logic says they would hire me.

[bige1030]

Well, right now I have several debts involving with several credit cards. One is Bank of America- $3000, one with Capitalone -$1200. 4 credit cards with Chase bank - total to $6000 One with Orchard Bank - $300. I am still in the process of deciding whether I should file for bankruptcy or make a lumpsum payment. I try to negotiate to pay like 50%- 60% of the debt.
Right now, I have very little income and no asset. So I think I am gonna be alright if I file the bankruptcy, it's gonna be no asset case 4 sure. But I am just worried about the future for my career opportunity.

I'm confused about one thing: if you have very little income and no assets (which means very little money in the bank as well as no property beyond normal household goods, clothing, etc.), where would you get the money to settle?

If you have enough money to settle right now, at this very moment, that's probably your best bet. Why? Unless you have a good cash exemption in your state, you most likely would be required to give that money to your bankruptcy trustee to give to your creditors if you filed for bankruptcy.

If you don't have enough money to settle, bankruptcy is probably your best bet. Creditors don't like to settle if you don't have the money up front to pay, and your credit will get trashed even more by waiting until you do have the money.

What would also affect your settlement position is your current situation with the cards. Being current = no settlement. Your best bet for the best settlement deal is probably after your account has been in in-house collections for a while.

If you're really worried about getting a job after graduating because of bankruptcy or a bad credit report, there are things that you can do. The first is to rebuild your credit as soon as you can. Let your credit report show that you've become more responsible with credit after bankruptcy.

Also, pick up a skill that could make you more valuable to employers. Computer programming is one idea. I'm sure you could get creative in this realm. But whatever you do, make sure that you have something to show for your skill - take a class, showcase it on a website if that's an appropriate medium, or better yet, get a job on campus doing it.

[bige1030]

I'm in the same boat as you.

21 years old, college sophomore wanting to major in either finance or accounting.

I earned $6,000 in 2006.
and I have over $24,000 in credit card debt.

The only thing stopping me from my final decision to file is just that.

Are you making your minimum payments on time, every time? If not, your credit report is already getting bad by the month. More missed or partial payments means more bad credit. IMHO, if you can't keep up with your payments, bankruptcy is probably the best thing you can do. After all, you can rebuild your credit after filing, and you won't keep on trashing your credit report by getting late marks, charge-offs, collections notations, or even (if it gets really bad) judgments.

By the way, I'm 23, and I got a Chapter 7 discharge this past January. I discharged $22,002 in credit card debt. I'm now a grad student (just started this semester), and I consider myself very fortunate that bankruptcy won't affect my prospects in academia when I finally get a Ph.D. That is, if I decide to continue on the path that I've chosen...part of me wants to be a mathematician, but part of me also wants to be a bankruptcy lawyer (who will help people get out of debt...the legal way!).

With that said, my advice is to continue with your career plan (which it seems you're doing --good for ya!) --I personally have contemplated switching major because of my bankruptcy. But now I truly see debt as a personal problem, no different than marital problems, or any other ordeal outside your career life.

If traditional careers in your major are unavailable because of your credit, you could always pursue an alternative path. Like I was saying to toby - computer programming is a pretty good one. With financial/accounting knowledge, you guys could be valuable to a financial software development team.

Or if you need more time after your discharge before landing your dream job, there's always graduate school. State schools are generally cheaper, and you could probably pay the whole bill with federal student loans. If you decide to go into a more academic field in grad school, teaching and research assistantships could help you out, too.

My rationalization: I'm finding myself less and less motivated with school with the stress of having to pay my credit card bills. Additionally, I'm finding myself working more hours to make more money --which result in poor academic performance (ie. low GPA). SO, by filing BK, I'll quit my job and devote 100% effort on making excellent grades, and maybe doing some extracurricular activities.

So let's say in 3 years I graduate, along with Joe Smith, from the same school. We both apply for the same position at an accounting firm on the same day. Joe Smith has no credit history because his rich daddy paid for his tuition and everything else, but partied too much and suffers from a 2.4 GPA. I graduated with BK filed three years ago (but can tell the employer of how I rebounded, acquiring financial wisdom along the way) --and managed to pull a 3.2 GPA while holding leadership positions in school organizations.

I'm only 21 and have little knowledge of the career world and what employers prefer, but my logic says they would hire me.

[BKsuperman]

bige1030,

Thanks for your advice.
Fortunately I don't have any derogatory items on my reports whatsoever, and I do plan on filing before falling behind on payments.

I'm a newbie with bankruptcy, but I disagree with the popular advice here to immediately stop paying your creditors once you know you're filing for BK. Wouldn't this make post-BK credit repair lengthier and more complicated? Of course, if that money is necessary to pay for the BK process/attorney, or you simply can't afford it -then I would do the same.

thanks again

[bige1030]

I think you have a good point - your pre-bankruptcy credit still matters in terms of your overall credit picture. It's unclear to me, though, whether the savings you get by utilizing better post-BK offers of credit is enough to offset the money that you paid to your creditors once you knew that you were filing. You've got me curious now!

EDIT: But wait a minute...if you can manage filing before getting lates, how will your budget look to the bankruptcy trustee? If you have too much disposable income, they could always say that filing a 7 would be an abuse. But if you quit your job and spend down your savings to keep from getting lates, your budget would definitely look like you're on the edge of financial disaster. That's one consideration to make before thinking you can file with no lates.

[Walnut]

Man, I see so much of my old self in some of these posts. I was also in college and got in over my head by about $20000 in debt with various cards and little hope of paying all the payments. And I did file a Chapter Seven in 1989 when I was 23. AND I REGRETTED IT FOR TEN YEARS! Sure, it sounds like a great option - but you know what? It was such a pain knowingyou couldn't buy a car the usual way, having to work a lot more on getting a house, telling a potential spouse you had done this, etc etc. It's one thing to file when you are married and financial disaster strikes (in my case I lost my job and had a new baby on the way and wife had to quit working - so into the breach again....), and another to do so when you are just starting out in life. Believe me, the finance world will turn a dim eye to you when they see a BK. For the OP, your best bet is to suck it up, get another job if you can and work with your creditors - maybe even call CCCS before filing. An attorney sadly will just take your money and file for you. They aren't permitted to give you advice. On my first BK in 1989, in hindsight, I never would have done it. The next one in 2007 - well, after seeing how credit companies have "devolved" over the years and have become bloodsuckers, plus with a family at stake, I would do it again. But don't just dive into this. Ten years when you are only 23 or 21 is a LONG TIME. Go make an appointment with your local CCCS and get a free consultation and see what they tell you. Stay away from anyone that is not CCCS.