Is there a point of no return on a Chapter 7

[Skinsfan]

At what point can I pull my Chapter 7?

If a creditor was notified of a Ch7 filing, wouldn't they be extremely interested in settling the debt?

[SMinGA]

Once it has been filed, then its not possible for you to cancel it.

[Skinsfan]

Once it has been filed, then its not possible for you to cancel it.

Can you think of any other way to put a creditor on notice that I may/might/possibly file Chapter 7?

[StartingOver08]

No. You can tell them, but it means nothing and they hear that threat all day long.

There is even a formula to determine when a debtor is most likely to file BK. In fact, it is called the bankruptcy risk score. http://www.bankrate.com/finance/debt...-score--1.aspx

Here is FICO's product page describing the benefits of knowing the consumer BK risk score:

http://www.fico.com/en/Products/Scoring/Pages/FICO-Bankruptcy-Scores.aspx

[Skinsfan]

No. You can tell them, but it means nothing and they hear that threat all day long.

There is even a formula to determine when a debtor is most likely to file BK. In fact, it is called the bankruptcy risk score. http://www.bankrate.com/finance/debt...-score--1.aspx

Here is FICO's product page describing the benefits of knowing the consumer BK risk score:
http://www.fico.com/en/Products/Scor...cy-Scores.aspx

Fascinating.

[frogger]

Collectors hear the bk talk all of the time. Tell them, "threaten" to file, tell them to call your attorney..... whatever.

Until you have a case number, talk is cheap and that is how it is viewed.

[momofthree]

Often creditors will offer to settle with you once you are 4+ months behind on your payments. If you've also told them you're planning to file bk, they may be more likely to offer you a settlement. I got a call the DAY before filing my bk offering me a 26% settlement on my $10k credit card.....If I was only filing on credit cards, I probably would have taken it and canceled out my bk.

[HHM]

Not that I recommend this...

SiGma is right, once the case is FILED, you cannot voluntarily dismiss it.

However, if you fail to show up to the 341 meeting or fail to provide the requested documents to the trustee, the case will be dismissed. However, going this route has consequences on your ability to refile a bankruptcy and to get certain debts discharged.

As was mentioned, threatening BK doesn't really hold much water in a settlement negotiation.

[Skinsfan]

Often creditors will offer to settle with you once you are 4+ months behind on your payments. If you've also told them you're planning to file bk, they may be more likely to offer you a settlement. I got a call the DAY before filing my bk offering me a 26% settlement on my $10k credit card.....If I was only filing on credit cards, I probably would have taken it and canceled out my bk.

26% is about the BEST number I've seen reading these boards. If I could get 26% and dispute the other 74%, so I wouldn't get a 1099C, I would take it.

I'm judgment proof and I'm eligible for Chapter 7. However, I do have exempt assets in an IRA that I can use for a settlement that generous.

I can see why the laws are tough on people filing and then pulling out of a Chapter 7. I'm sure it is to prevent abuse by debtors trying to use it as leverage against the credit card companies.

[HHM]

26% is about the BEST number I've seen reading these boards. If I could get 26% and dispute the other 74%, so I wouldn't get a 1099C, I would take it.

I'm judgment proof and I'm eligible for Chapter 7. However, I do have exempt assets in an IRA that I can use for a settlement that generous.

I can see why the laws are tough on people filing and then pulling out of a Chapter 7. I'm sure it is to prevent abuse by debtors trying to use it as leverage against the credit card companies.

Let me be blunt, if that is your situation, there is NO F'ing reason to settle, file BK and be done. One of the cardinal rules of debt settlement, if the source of settlement funds is from EXEMPT assets, it would but STUPID to settle as oppose to filing BK.

[newbie2]

26% is about the BEST number I've seen reading these boards. If I could get 26% and dispute the other 74%, so I wouldn't get a 1099C, I would take it.

I'm judgment proof and I'm eligible for Chapter 7. However, I do have exempt assets in an IRA that I can use for a settlement that generous.

I can see why the laws are tough on people filing and then pulling out of a Chapter 7. I'm sure it is to prevent abuse by debtors trying to use it as leverage against the credit card companies.

You may be able to settle, but don't count on not getting that 1099 for the remainder of the debt. I don't think the creditors have much choice but to issue them (if the amount remaining is over $600). In fact, plan on it and then make your decision about whether settling the debt is more beneficial (along with the tax consequences) or filing bankruptcy is more beneficial.

[Skinsfan]

Let me be blunt, if that is your situation, there is NO F'ing reason to settle, file BK and be done. One of the cardinal rules of debt settlement, if the source of settlement funds is from EXEMPT assets, it would but STUPID to settle as oppose to filing BK.

Hey, man, I'm not trying get under your skin.

I guess I would break the cardinal rule then...for 26% and no 1099C.

[Skinsfan]

You may be able to settle, but don't count on not getting that 1099 for the remainder of the debt. I don't think the creditors have much choice but to issue them (if the amount remaining is over $600). In fact, plan on it and then make your decision about whether settling the debt is more beneficial (along with the tax consequences) or filing bankruptcy is more beneficial.

I think as long as you dispute the 74% of the debt in question and have it put in the settlement agreement, you can avoid taxes. I would delve further into it if I got in that situation.

[BCA2009]

Hey, man, I'm not trying get under your skin.

I guess I would break the cardinal rule then...for 26% and no 1099C.

As newbie said, the bank doesn't have a choice in the 1099 issuance, it is dictated by the IRS. There are a bunch of situations where you can avoid paying tax on the forgiven debt. But forgiven debt is income no matter how you slice it.

[HHM]

Let me ask you this...would settling for 26% be $2,500 or less?

I guess I am not sure what myths, misconceptions, and assumptions you have about BK such that you would liquidate a retirement, and WASTE, that money to settle.

Also, it is probably a tad unrealistic to assume "every" creditor would settle in that range.