Zakheim & Discover

[areck]

Discover card has turned me over to atty firm Zakheim & Associates.

What was originally a $6k debt (and has been ignored for quite some time) is now an $8800 debt.

Zakheim informs me that Discover will "settle" the debt at this time, if paid within the next 20 days, for $5700.

I don't have $5700. I don't have $57.

I am not prepared to file BK at this time. We make too much $$. It's just that every dime we make, is already signed out to creditors.

What do I do at this point?

I know I owe the debt (though not THAT MUCH), and yes I am wrong to ignore it. But the reason I've ignored it is because I'm so overburdened already with debt payouts.

I don't know what to do. This is not an official summons. This is a, in bold all caps across the top "One time Settlement Offer", letter. And from the atty firm of Zakheim & Associates.

[AngelinaCatHub]

YOU DON'T WORRY ABOUT IT. This is a normal attempt but if you have filed, you will screw up your bk with a preferential payment, same if you intend to file soon as it is good money thrown away. More info would help. 'Hub

[areck]

YOU DON'T WORRY ABOUT IT. This is a normal attempt but if you have filed, you will screw up your bk with a preferential payment, same if you intend to file soon as it is good money thrown away. More info would help. 'Hub

The only other info that I can provide is that BK is not imminent in my case. I am trying, to work my way out of debt, at least presently, if possible. And not file BK.

Too much liability with being a biz owner, and co-mingling of funds. So, if I can, I want to try and work my way out of this debt, if at all possible.

The whole problem is that this downturn in the economy has hampered our income potential. There was a time when $64k in debt would've been dispensable within a few mos. Not so much, anymore. Which is what the unsecured debt load is presently.

I know that I owe this money (although they've added a substantial amount to what was originally owed, likely because I've ignored it for mos. on end). The problem is that I already pay out so much monthly in trying to keep other creditors at arm's length, and not have to go file BK. The income vs. what is necessary to keep all these creditors at bay, doesn't compute.

Thus, the reason for the default to begin with. It isn't because I just willy nilly decided that I don't wanna pay em. If I had it, I'd pay it, I wouldn't of defaulted.

Look, in our situation (self-employed) we never know from month to month what our income will be. Some months it is woefully low, and others it can be astoundingly high. On average, if one were to just look at the averages over the last 12 mos. one would think "well what's your problem, you are making enough to pay all these folks and then some". But what isn't factored is that I'm behind the 8-ball. I have nothing in reserve anymore, ever. So on the month that I make a woefully low amount of money, I don't have a reserve fund to go access to make up the difference.

I'm already paying out, just to placate various creditors, to the tune of just over $1200 monthly.

If I call these folks, which I hate to do, they are awful to deal with. They will likely (if even any monthly payment possible at all), want more than what I can commit to. I want to pay it, I just need wiggle room. I need the room to, let me pay off some of the smaller creditors that are only hitting me to the tune of $50/monthly. Let me get some of the smaller creditors paid off, and then the $100 that I've agreed to pay you, will now become $150, ....... or, maybe if I can pay off "SOME" of the smaller creditors that I'm signed on for, to the tune of $50/monthly, or $25/montly, or $35/monthly (there are several), when/if I can finally get some of those smaller creditors paid off, then yea, I can double up on someone else's payment. And work on getting them paid off too, and then double up again, on someone else's payment, and get them paid off, and so on.

But when I call these folks (which I don't want to do), ......... they will likely want more of a monthly commitment from me than I can commit to.

[DeadManCrawling]

Based on what you posted:

It is time to stop paying ALL creditors. Sorry to be blunt, but if you are putting our 1200 a month and not really getting ahead, it is time to save that 1200 a month, pay an attorney, reorganize your priorities and get ready to file bk.

At the rate you are going you will never get back to even and you will have given all that money to creditors. You are in the tailspin most of us have been in, and need to take a very hard look at things.

Have you checked your interest rates lately? They are probably all at the highest level possible, which is not just impossible to pay, it is indentured servitude.

If you are hoping to preserve a credit score, you are too late. It is already in the gutter. As long as you try to work through it, in the gutter it will remain.

I am self employed, too, and just filed Ch 7. There is no reason you should not file, from your limited info.

Your business may be at risk, which I certainly understand. It may not, though, too, and is worth at least considering. Please post a little about your business, in general terms, if you would like some opinions.

My company is entirely me, and my skills, with a couple computers and no employees. If you have a retail establishment, or business assets, offices, employees and so on, that can change things dramatically and be a reason to avoid filing.

Either way, good luck.

-dmc