Should I file Bankruptcy?

[stevodevo]

I am an Australian that lived in the US for 10 years and while I was there I managed to rack up $30K in credit card debt through a series of bad luck events (medical expenses for cancer treatment, job loss, loss on sale of a house).

I moved back to Australia at the beginning of this year because I couldn't find work in the US and have been trying to get back on my feet. I have been thinking the best option for me is to just file bankruptcy in the US and have my credit card debt go away, but that was before I was considering returning to the US!

Now, I am thinking I'll probably want to come back to the US in the next few years and I'm keen to get my debt situation there resolved ASAP so I can start paying for my mistakes. I just ran my credit report and have a credit score of 591 with a Charge Off status on one of the credit card accounts.

I could try to negotiate the credit card debt down as I have access to some cash from my parents to pay off my debt, but only have $12K in cash and $30K in debt. I have no assets in the US, only this debt so I don't have a lot to lose at this point.

What is the best course of action? Should I just file bankruptcy or should I try to negotiate with the creditors? It's a lot of money and my credit is already wrecked!!

Any advice would be appreciated but please don't criticize my previous actions - I can't change what has happened, I can only make improvements from here.

Thanks

[SunkShip]

With 12k cash and 30k debt you might be able to settle with your creditors at 25-30% and make it all go away, it is worth a try to talk to them about settling. There are tax consequences to settling debt but I do not know how that works with you in Australia.

If you file Bankruptcy in the US you will need to return here to attend your 341 hearing. Consider the cost of travel, lawyer and filing fees when you are looking at which will work better for you.

Best of luck, no criticism likely here, we are all in the same place financially.

[stevodevo]

Thanks for the advice. I called the first creditor (AMEX) and they said the lowest they typically settle is 58% - so I'll see if I can get the Visa one lower and then perhaps I might be all set and not have to file. I didn't realize I would have to be in the US to appear at a court hearing, so that's good info!

[momofthree]

Thanks for the advice. I called the first creditor (AMEX) and they said the lowest they typically settle is 58% - so I'll see if I can get the Visa one lower and then perhaps I might be all set and not have to file. I didn't realize I would have to be in the US to appear at a court hearing, so that's good info!

Amex offered me a 24% settlement the day before I filed bk. I was approx 6-8 months past due at that time.

[SunkShip]

As momfothree stated, it takes being many months late before the good settlement offers roll in. I know Amex will settle for less than 58%, because a friend just got a 25% offer in the mail. They just want to get the most they can, but eventually they will take whatever you give them.

With any settlement make sure they will provide you with written documentation that your settlement payment is being accepted as full payment for the debt and no further billing will happen then or in the future. (One tried to get me with this years ago!)