How much sense does it make to settle?

[cynhgm]

I've crossed the six month line with most of my creditors. Even though I haven't spoken to any of them for a while on the phone they do seem to want to cut deals with me to agree on some kind of settlement. Since I am set to file in a couple of months and I am not scared of the stigma that is attached to bankruptcy does it make any sense to settle? It is not going to help my credit score, I assume. Then there are tax implication, AFAIK (and I don't know much ) Plus, trying to settle with all of them is going to take so much time and effort and everything will fall through if only one of the would not want to come to an agreement that would work for me.

I guess I don't really have a question. I'd welcome some comments, though.

[LuciluS]

I've crossed the six month line with most of my creditors. Even though I haven't spoken to any of them for a while on the phone they do seem to want to cut deals with me to agree on some kind of settlement. Since I am set to file in a couple of months and I am not scared of the stigma that is attached to bankruptcy does it make any sense to settle? It is not going to help my credit score, I assume. Then there are tax implication, AFAIK (and I don't know much ) Plus, trying to settle with all of them is going to take so much time and effort and everything will fall through if only one of the would not want to come to an agreement that would work for me.

I guess I don't really have a question. I'd welcome some comments, though.

My personal opinion: You are wasting your precious $$ and time IF you will be filing BK.

Most of our CCs haven't been paid since last Sept. They are in the hands of Collectors and JDBs'. Do I Care? No! Attorney Paid In Full & said 'No Worries'. Filing Chapter 7 in 9/09.

Luci

[Brighterdays]

If you can file bk, then don't give them a penny. I am still trying to figure out if i can file bk. If I "can't" then I have no choice but to settle or be a deadbeat the until I can.

The benefits of bk are numerous(Remember both will crush your credit score.)
Here are a few benefits:

1.)Closure, no future lawsuits or liabilities, they can't come back on you or sell your remaining forgiven debt(it happens).
2.)Organized, with bk you don't have to try to juggle 10 or more different creditors
3.)Peace and quiet, Most Phone calls cease with bk
4.) Cheaper, No tax liability for the forgiven debt, and you only have to pay your lawyer's fee and court fees. Settlement you may end up having to get legal help anyways.

I can't really see any advantages to settlements over Bk; unless you are unable to file due to too much $$$. If you do settle get everything in writing and follow the payoff instructions to a tee. Remeber most the collectors lie,cheat and steal more than politicians. Most say only communicate in writings with certified mail. Don't talk to them on the phone.

[njguy1972]

you need to look at your situation. I was headed to a chapter 13 and decided to settle. I posted my story on the ch 13 board today to help others that may be in the situation I was in. If you are a cut and dry ch 7 than it may not make sense to settle. If you are a ch 13 you need to check. The 1099c's may not be an issue if you can prove insolvency (IRS form 982 work sheet)

http://www.bkforum.com/showthread.php?p=287869#post287869

[treehugger1]

I think there are thousands of high wage-earners who cannot file for a vairety of reasons. My reason was I'm a baby boomer with massive student loan debt. So far, not filing a BK 13 and living with potential 25% wage garnishment was far better than paying 60+% of disposable wages to a trustee and seeing the interest grow on my student loans over five years.

While this forum is geared toward bankruptcy, I've always advocated there are many methods of addressing one's bankrupt situation. The federal approach to filing a formal BK works best for most. however, there are reasons that some will either stall, or put off BK indefinitely.

If you can put away sums of money after not filing, then you might eventually get some CA or JDB to give you a "real" offer. I don't think the initial offers from OC's are worth pursuing anymore, unless they substantially beat what you might have to pay out in a BK 13. If you are close to retirement and can see a 6 - 12 month future of reduced income due to retirement, it might be better to wait it out and file for a BK 7 when the time is right.

Just my "not-so-humble" opinions.

[Brighterdays]

I think there are thousands of high wage-earners who cannot file for a vairety of reasons. My reason was I'm a baby boomer with massive student loan debt. So far, not filing a BK 13 and living with potential 25% wage garnishment was far better than paying 60+% of disposable wages to a trustee and seeing the interest grow on my student loans over five years.

While this forum is geared toward bankruptcy, I've always advocated there are many methods of addressing one's bankrupt situation. The federal approach to filing a formal BK works best for most. however, there are reasons that some will either stall, or put off BK indefinitely.

If you can put away sums of money after not filing, then you might eventually get some CA or JDB to give you a "real" offer. I don't think the initial offers from OC's are worth pursuing anymore, unless they substantially beat what you might have to pay out in a BK 13. If you are close to retirement and can see a 6 - 12 month future of reduced income due to retirement, it might be better to wait it out and file for a BK 7 when the time is right.

Just my "not-so-humble" opinions.

I agree with your views and unfortunately I am one of those who cant file ch 7(at least not for a while) due to an inheritance. I started a thread(see below) about debt settlement and then was attacked by some idiot on here that accused me of some hidden agenda because i didn't drink the coolaid and want to file bk. I have no hidden agenda, I just want to get this over with as soon as possible and as low a cost as possible. I am willing to pay a small % if I can get away with it, but leave no doubt I would much rather file ch 7.

Fortunately both roads, DS and BK, start off on the same path(quit paying your bills) Hopefully by the time I "have" to make a decision of wich fork in the road to turn onto to, things for me will be a little more clear.

http://www.bkforum.com/showthread.php?t=39863