Is this a good idea?

[bf2bf]

Is it a good idea to "warn" the creditors that you will filing BK 7 ?

For example, creditors rarely/never settle with people who are current on their payments.
Say, as the last resort in an attempt to settle the debt, you tell the creditor that your only other option is filing a Ch 7. Is this a good idea or not?
Can the creditor take any measures or use such offer against you during BK or at 341 meeting?

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[BassBoy]

I suppose you could tell them, however creditors here this all of the time for debtors, but debtors never file, or they wait a very long time to do so. IMO, I would wait until you've retained an attorney, if you plan to hire one, befoer you tell creditors you'll be filing.

What I feel about measures against you for saying your'e filing BK:
I don't believe a creditor would use anything you say against you, in court or out of court, unless you never filed and just strung them along and hid from your obligations. At least I've never heard of this.

[justplaintired]

We did tell them that, but we had an attorney who was paid in full and we were just dragging our feet on filing, and we had an attorney name to give the creditors. So, if you know you will be filing, just unsure of when, then go ahead, but if you are playing a game with them, eventually they will call you on it. I think we are a little different, we did have an attorney and believe me, they will contact the attorney's name you give them, so make sure the attorney gives you the ok before giving out their name.

[bf2bf]

So what you're saying is that most/all creditors do not take such "warning" seriously because most people do not follow through with BK immediately after they communicate with the creditor.

I wonder if there are people on here for whom this warning to the CC company actually worked in settling their accounts.


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[Stephen1234]

Totally backfired on me. I threatened a cc company with it, and all they did was transfer me to their "bankruptcy department," where they wanted to know who my attorney was. Told them I hadn't retained one yet, and they said, well call back with the name when you have one.

[bf2bf]

Totally backfired on me. I threatened a cc company with it, and all they did was transfer me to their "bankruptcy department," where they wanted to know who my attorney was. Told them I hadn't retained one yet, and they said, well call back with the name when you have one.

Did they say they would settle on a reduced amount if you had an attorney?


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[backtoschool]

Totally backfired on me. I threatened a cc company with it, and all they did was transfer me to their "bankruptcy department," where they wanted to know who my attorney was. Told them I hadn't retained one yet, and they said, well call back with the name when you have one.

I tried telling a collector I was about to file and they just started laughing. Literally, the collector laughed and said that if I was filing for bankruptcy it was not her problem and the legal department could deal with it when and if they got the paperwork.

I think they hear "I am probably filing for bankruptcy" from people a million times a day.

[liz417]

I told my creditors that I was filing for BK in a "couple of months", that I had retained an attorney and to call there. I didn't file until a year later, but my attorney would contact me and let me know that "offers to settle" came in. So yes, creditors will still offer you a settlement in hopes of you NOT filing for BK.

[SocalBroke]

This probably goes without saying but if you do decide to tell a creditor you are considering bankruptcy, do NOT use the credit card afterwards for any reason as that would be an automatic abuse.

[bf2bf]

This probably goes without saying but if you do decide to tell a creditor you are considering bankruptcy, do NOT use the credit card afterwards for any reason as that would be an automatic abuse.

Yes, the last time the cards were used was at least 3-4 months ago when it became clear that the income would be drastically reduced in the second half of the year.
Even at full income, it was already a hardship paying even the minimum amounts, when at the beginning of the year, all of the creditors were tripping over themselves in a rush to almost double the interest rates and cut the CLs on the cards (and all this with payments never being late or delinquent on any of the accounts, secured or not).

Everything is still up-to-date as of now, so why won't the creditors settle for something instead of getting nothing after Ch 7, is beyond me.

It doesn't even make sense from a business point of view not to settle these unsecured debts with the consumer, unless they're just being malicious and just want to punish people even at the cost to themselves.


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[shabam]

Everything is still up-to-date as of now, so why won't the creditors settle for something instead of getting nothing after Ch 7, is beyond me.

It doesn't even make sense from a business point of view not to settle these unsecured debts with the consumer, unless they're just being malicious and just want to punish people even at the cost to themselves.

Until you have missed a few payments creditos are not sure if you are serious or just trying to get out of paying.

I figured out what creditors are up to and why the do not bother settling early on. Statistically speaking, creditors know that once someone is over 30 days late, they will most likely never see the money. I strongly believe that they allow your balance to skyrocket since they eventually write it off and can claim a tax deduction on the amount. Therefore, the higher the end balance, the better it is for them. Even when they offer to settle and get something, they still write off the remaining balance they lost. You pay the tax penalty for the settlement and they get the tax deduction for the same amount. Once again, the higher the balance forfeit, the better for them tax wise.

[HMT]

speaking of which, do you pay taxes on discharged debt the same as you would a forgiven debt? It's basically the same thing, right?

[shabam]

speaking of which, do you pay taxes on discharged debt the same as you would a forgiven debt? It's basically the same thing, right?

My understanding is that you do not pay tax on your discharged debt. You only pay income tax on your forgiven debt, that is, you negotiate a settlement.

[keepmine]

Yes, the last time the cards were used was at least 3-4 months ago when it became clear that the income would be drastically reduced in the second half of the year.
Even at full income, it was already a hardship paying even the minimum amounts, when at the beginning of the year, all of the creditors were tripping over themselves in a rush to almost double the interest rates and cut the CLs on the cards (and all this with payments never being late or delinquent on any of the accounts, secured or not).

Everything is still up-to-date as of now, so why won't the creditors settle for something instead of getting nothing after Ch 7, is beyond me.

It doesn't even make sense from a business point of view not to settle these unsecured debts with the consumer, unless they're just being malicious and just want to punish people even at the cost to themselves.

The posters who tell you that creditors hear the "B" word a million times a day are correct. As long as you're current, they'll just let you moan and complain and cash your check.
If you are serious about settling, stop paying all the cards and wait. At the 90 day or so mark of default you'll get a lot of offers. Me, at the 150 day mark of my default, Cap 1 offered a 50% settlement and Chase offered 45%. Both offers were completely unsolicited on my part.