Magic Forumula

[researchnerd]

Why can't they see the fundamental logic that half a loaf is better then nothing?

An attorney that I consulted with told me that bill collectors were basically sadists.

Yep. The more they make you sweat, lose sleep, doubt yourself, and generally freak out, the more they think you are likely to pay. And when their pay is based on their ability to do that, they are more motivated to act sadistically, just to try to get that half a loaf.

Don't buy into it, don't talk to them, and don't (I guess you already learned this) give them any hint that you may be filing BK. After you file, you can give them a case number and they have to go away. But until then, avoid and delay are good tactics.

However, I think a wise decision here should be more of a purely financial decision than an ego determined action.

You are exactly right about this. Make it a business decision, not an emotional one. Try to look at your situation objectively; imagine that you are a big business or bank. What decisions would you make to protect your stockholders? What would be the best investment in your future?

[msm859]

Yes, there is a magic forumula. BKC + FC - SC = X If X>0 file for Bankruptcy. If X<0 you settle.
BKC = costs of bankruptcy (attorney fees, filing fees, any chapter 13 payments or value of surrendered assets. FC = future costs associated with filing for bankruptcy (increased interest on auto purchases, housing, anything in your future that would be financially affected by filing bankruptcy). SC = settlement costs for settling with your creditors now.
As everyone says it should be a business decision. There is no emotion in the above formula.

[BKlooker]

researchnerd and msm bring up a good point. You have to take your emotions out of this to get through it. While that's easier said than done and everyone get somewhat anxious about this stuff, it helps to consider how many MAJOR businesses out there have filed BK in the past few years alone..from Borders UK, to Ritx Camera, KB Toys...not to mention all the "bail-out" companies. None of them are losing sleep over discharging debt they can't handle anymore than you should.

I found out through my mother that my one uncle actually filed many years ago. He agonized over it (he also has anxiety problems as I do) and had a lot of issues coming to terms with it, but it was actually my mother who tried to tell him it's simply a business decision, nothing more. It may involve your personal affects, but it's just debt as any other debt is. Life has gotten much much better for him since then financially (and as a result emotionally), and he no longer worries about how he will find money to eat or to give Xmas gifts or go to the occasional movie or fine restuarant.