Settlement offers

[bkfiler]

Something to discuss w/ an attorney, I think if the charges happen in the presumption period, the creditor does not have to prove fraud.

correct, under the new laws its presummed you knew you were going to file so you would have to pay if they objected to them. but you can argue it though but imo wont win.

[SinkingFast]

Something to discuss w/ an attorney, I think if the charges happen in the presumption period, the creditor does not have to prove fraud.

The 70/90 day rule is a line drawn in the sand, as one of the attnys we chatted with called it. Less than 70/90 days, the burden of proof is on the debtor that they didn't know they were going to file BK. Beyond the 70/90 days, the burden of proof shifts to the creditor.

I'm curious, Kydiv,........ The $14K balance. Was the creditor threatening the whole $14K balance and offered to settle for $2K. Or, did you run up $2K in debt right before filing? What has been your attny's advice in the matter?

[bkfiler]

"The old rule was that if you charged over 1000 dollars on a card within 60 days of filing that it was fraud and not dischargeable. The new rule will be 750 dollars in 70 days or 500 dollars of luxury goods in 90".

"Certain debts cannot be discharged. Debts to a single creditor of more than $500 for luxury goods that were incurred 90 days before filing cannot be discharged. In addition, cash advances of $750 within 70 days are also non-dischargeable."

"Just as was true under prior law, certain credit-card transactions on the eve of bankruptcy are presumed fraudulent and therefore nondischargeable, but the debtor can continue to rebut the presumption. The transactions affected are luxury goods and services totaling more than $500 within the past 90 days and cash advances of $750 or more received within the past 70 days."

"Debts owed to a single creditor totaling more than $500 for luxury goods incurred within 90 days of filing are presumed nondischargeable; cash advances of $750 within 70 days are similarly treated."

remember that those amounts are still probably not totals but single charges. who knows. its a law and can be fought many ways. it doesnt matter much anyways, its not going to make you have to pay the entire balance under any normal circumstances. if you can wait 6 months its best. over a year and you are even better. more payments made after the charges is a definite plus plus plus for you.

[kydiv]

Capital one

So after talking more with my attorney, we didn't sign the settlement with CapitalOne. He says more than likely they will drop it, and if they don't we can try to settle with them later. Here's hoping they drop off the face of the earth.

On a positive note, I did my taxes this weekend and will be getting a refund. Yea! Since I've already had my disposition hearing, I'm hoping they won't come looking to take it.

D

[bkfiler]

i hope they do fall off the face of the earth and i hope you get to keep your taxes too.

wishing you luck!

[kydiv]

Update

So we didn't re-affirm with Captialone at that time. Now they've come back with another offer, a settlement of $1500 payable $100/month.

Considering this is 10% of the total balance, I'm REALLY tempted to accept this. Otherwise, I fear they'll drag this out forever. Anyone else have this fear?

[SinkingFast]

I do. Especially since you are a New Law BK and we're kinda sorta looking at the same thing when we file. We can't wait 6 months to a year due to impending foreclosure on a house.

The attny we saw Thursday was more worried about Cash Advances than charges. We are below the limit there. Just some convenience check use on 2 accts. One was $575 total, and the other was a tad over $100. Both well below the new limit, so no concern there.

He said the CC's will come to him for money for the more recent charges. He said it could be for one big charge, or the Credit Company could come after the total amount of the last few months. That's per credit line so I could see the $$ adding up real quick. He will blow them off. They will come back. He will blow them off again. Some will just quit. Others will come back. At some point, he will start to negotiate. He said we may wind up having to pay back some, in payments, over a year, at 0% interest rate.

What's your attny advised you to do?? Has he suggested you agree and pay, or wait and see if they offer lower??

[magoo]

I'm not sure of all the ins-and-outs of the bk part of a settlement, but I do believe that you might get a 1099 form at the end of the year for any amount of that debt you've settled, and been "forgiven" on, over the amount of $600 (?). You might want to double-check on this first, also. It can be considered as income, under most circumstances, and you'll be paying taxes on it.

That's a big part of the reason we didn't take any of the "settle today for 30%" offers from the cc companys, and went with the bk instead. Didn't want to pay taxes on all the accumulated late fees and interest. This is also something that they don't tell you about up front. Good luck!

[StaciMM]

This is not a situation of debt settlement-it is a situation of a recent charge or transaction that the creditor can object to thru the BK court. IF they do, and IF they win the objection, the objected portion of debt will remain after BK and the creditor can charge interest, pursue collection activities, etc. If you think you'll lose the objection, settling is a good idea. (And its good for the creditor also, as they get guaranteed money rather than trying to chase you down for a long shot of a payment.)

[FoolAndHisMoney]

I read your post and are wondering what is the amount they are disputing? It's not the whole amount of $14000, or is it? If so then yes settle! If not then they may just go away since a few thousand is too small for them to fight in court. Even if they do have a case the time and hassle won't be worth it for them. Let us know and good luck.

[kydiv]

Settlement

Their paperwork mentioned the entire balance, not just charges I had in the 90 days prior to filing. I've heard so many horror stories about CapitalOne, I just want to get rid of them. Right now they're the only thing I can forsee standing between me and my discharge (due March 12). And I just want the whole thing settled with as little problems as possible, and $100 a month for 15 months will not kill me.

[FoolAndHisMoney]

Their paperwork mentioned the entire balance, not just charges I had in the 90 days prior to filing. I've heard so many horror stories about CapitalOne, I just want to get rid of them. Right now they're the only thing I can forsee standing between me and my discharge (due March 12). And I just want the whole thing settled with as little problems as possible, and $100 a month for 15 months will not kill me.

I agree. Get it behind you.

[SinkingFast]

Their paperwork mentioned the entire balance, not just charges I had in the 90 days prior to filing. I've heard so many horror stories about CapitalOne, I just want to get rid of them. Right now they're the only thing I can forsee standing between me and my discharge (due March 12). And I just want the whole thing settled with as little problems as possible, and $100 a month for 15 months will not kill me.

Oh Great! That's what I was afraid of. They came after you for the entire balance. UGH!!

The attnys, when you chat in Consult, make it sound like no big deal. One said, "What's the worst that can happen?? You wind up paying for your son's books?" When we were discussing this in the Consult on Thursday, the attny said, "So you get rid of $120K of debt by paying a couple of creditors $500 each??"

I guess we should definitely wait until the last charge gets past the 90 day point before we file. At least then, under the New Law, the burden of proof shifts from us to the Creditors after 90 days.

[edwards2]

I think I would settle too. Actually, I had a Capital One card and had no problems with them and in fact, they issued me another one post BK. The rule of thumb has to be to get rid of any cc company that might be a deterrent to you getting a discharge. It cant be worth it. A friend of mine had Sears protest several appliance purchases she made and a backyard gym for her son so she paid them for them monthly. What is non-essential about a washer and dryer? Anyway, Sears did want them back as well as the gym so she did what she wanted to do and that was to keep them.

[SinkingFast]

I specifically mentioned Sears to the attny and his assistant on Thursday. I explained it was a gold Master Card and not a regular Sears charge. They asked what I had purchased. I said a counter type cooktop and and a built in wall unit oven. They asked where the appliances were. I said in the house for sale outa state. The attny said if they press it, that's where we'll tell 'em they can pick em up.

Problem now is,........ We finally got an offer on the house. It's contingent on sale of the buyer's property. Now what do we do??? We could say we don't have them anymore since we sold the house, I guess.