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[icyjay01]

If your able to get your debts settled for a percentage of the debt, how does that appear on your credit report? If Im able to get them to settle those debts, will that look better than filing for a BK?

[treehugger1]

Unless you know the "secret" method of how credit ratings are established, I don't know that a BK looks any worse. This might be more true for a BK 7. The point is that I don't see how "paying as agreed" with some notation related to delinquency dates helps anyone. The record still stays with your credit report for 7 years. There are some who maintain that anyone looking to settle accounts for less than owed, should also request a "pay for deletion." In other words, you might try to get the creditor/CA/JDB to delete your account from the credit reports in your settlement. You would want this in writing. I don't know how successful folks are at this. And, if they don't honor the agreement, then you will spend more time attempting to convince the credit reporting agencies that the credit line should be removed.

Keep in mind that when a BK is finally discharged, you have no unsecured debt. This in itself probably looks good to creditors, if you also have solid income. I don't know for sure.

Just an opinion here. There are other sites that offer more advice. Most of us here are bankrupt and debts are not being paid or settled. Google credit net or debtor boards.

[destitute]

One thing to keep in mind is that if you settle a debt you will get a 10-99 from them at the end of the year and have to pay taxes on the difference.

[optimistic1]

yeah thats always the kicker, but if you prove insolvency (bankrupt) to the IRS, you will NOT pay those taxes, the IRS is pretty easy to work with.

[destitute]

my understanding from the OP was the possibility of settling to avoid bk. Can you prove insolvency to the IRS without filing BK?

[justplaintired]

If you have enough money to settle debts, then that is a call only you can make. Can you settle every debt you have? When we were offered debt settlement prices, there was no way we could have come up with that kind of money. If you have that kind of money or you debt is not too large then perhaps it will work for you.

Most on here wouldn't have had that kind of money it would take to get out of the debt. When your debt is 30K and it would take 10-15K most of us didn't have that. If you do then BK probably wouldn't work for you anyway. When doing a debt settlement they usually want money within a short time frame (2 payments within 2 months).

Far as credit score, once you have been thru BK, you can't file again for 10 yrs.

[treehugger1]

As always, BB makes the point clear. You cannot protect yourself from possible suit by settling with a few accounts. They (all your accounts) have to be onboard. To think because one creditor was willing to settle, implies that they all are, is a mistake in your logic. OC's will pull your credit reports. I think if they see you were willing to settle with others, then they can sharpen the knives to cut you in the future.