Settle/No Settle? - Opinions please

[paradiddle]

Settle - No Settle?

I have 80k in BOA CC debt (only in my name not spouse) - 40K business (180 days) and 40K personal (150 days). BOA wants to settle for 20% or 16K. They may even take 4 payments. I will get a 1099C but my IRS calculations say that I/we are insolvent and will not owe any money in taxes.

CH13 Comparison : $16,000/60 = $267 a month in a ch 13 scenario

Wild-card: I am (still) involved in a lawsuit settlement (that I would lose in a CH 13).

Considerations: Credit report hit (CH13 vs paid as settled)

I am thinking this is my best deal. If I wait and it goes to 3rd party, the settlement clock would have to start all over again with new players and different motivations. It seems the BOA people just want to make any kind of deal.

PS: they have been very nice on the phone also.

[HHM]

The chap 13 would take care of the other debts as well, so in that sense the chap 13 is a more comprehensive solution.

Also, most fundamental question, do you have the $16K and/or where would it come from?

[DeadManCrawling]

Not familiar with your story, but as I posted in the other question: If the business is still active, that can complicate things.

[paradiddle]

The chap 13 would take care of the other debts as well, so in that sense the chap 13 is a more comprehensive solution.

Also, most fundamental question, do you have the $16K and/or where would it come from?

We will not have any other debts that will require protection from creditors at this time.

Yes, I have the money.

[paradiddle]

Not familiar with your story, but as I posted in the other question: If the business is still active, that can complicate things.

Business is not active.

sooooooooo.............

[paradiddle]

I got the verbal confirmation from BOA business and BOA/FIA to settle for 20% and make 4 payments ending in May. They will send me paperwork after I verbally commit. Total 17k on 83k of debt. Money will come from family members.

I will just have the Heloc and mortgage to pay with my wife. My wife is not on these cards and her credit is still over 750 and mine is currently 551. We live on cash and have no other debt. Our budget is ok with this setup. We like our home and have no plans to move. We will have her good credit to use if needed.

CH13 was not a good option IMHO given the BOA offer and insolvency implications on the 1099C income. I'll be done and take the credit score hit for 7 years. I couldn't do a CH 13 lien strip anyway without my wife going bankrupt. I also have insurance money settlement $$$ pending (approx 150K). I think my situation is unusual but I do see the merits of what a CH13 can do if the whole situation is in trouble.

[catleg]

Sounds like settlement will work for you, because otherwise in ch13 you would lose the insurance settlement to cover the credit card, in full.

[paradiddle]

To continue my BOA saga. I am hopefully wrapping up my 20% settlement after some back and forth phone calls with BOA business and BOA/FIA card services.
Verbal agreement to make 4 payments. They are very insistent on getting a bank routing thing going but I insist on sending a bank check. Very persistent and I don't trust that anyway. I am awaiting a formal written agreement for legal review. No need to rush at this point.

They tell me it will be close the account, no re-sold debt, "paid as settled".

When I talk to them on the phone, if I am pleasant, they are very pleasant.

[frogger]

Verbal agreement to make 4 payments.

Get it in writing! Don't do anything until you see signed paperwork. If you do, don't say that you were not warned........

[flyinbroke]

And they will fight tooth and nail on the writing part. I even had a BoA message about an unfinished conversation on a payment plan. This is a lie; I said I would not commit or send money without viewing their plan in print and she said she would mail it. No need to carry on further on the phone.

They are now acting like this never took place. Wanna bet "recorded for quality assurance" conveniently disappeared?

[paradiddle]

phone conversation was less pleasant today. I was handed off 3 times to more aggressive people. Insisting we get this (ach) electronic transfer setup. I wouldn't budge. I told them there would be no money in the account today as I am waiting for the $$ to arrive so why bother to set up something. They kept on throwing the urgency of 1st payments by 2/26 and that after that date I will be out of luck. yada yada....... I said that either make this work or it's CH13 for me. so them they agreed to wait until next Tues.

Maybe they think I am blowing them off and that by applying pressure it will change things. I still get the feeling something ain't right, but if they send me something legal I can review it. I also asked about signing an agreement but they said it wasn't necessary. hmmmmmm.......

[flyinbroke]

Of coooourssse it is not necessary. You can trust them. Really.

[paradiddle]

Does anyone know how hard the 180 day window is or do these CC companies just use that as a charge-off guideline?

[dscurlock]

phone conversation was less pleasant today. I was handed off 3 times to more aggressive people. Insisting we get this (ach) electronic transfer setup. I wouldn't budge. I told them there would be no money in the account today as I am waiting for the $$ to arrive so why bother to set up something. They kept on throwing the urgency of 1st payments by 2/26 and that after that date I will be out of luck. yada yada....... I said that either make this work or it's CH13 for me. so them they agreed to wait until next Tues.

Maybe they think I am blowing them off and that by applying pressure it will change things. I still get the feeling something ain't right, but if they send me something legal I can review it. I also asked about signing an agreement but they said it wasn't necessary. hmmmmmm.......

collections seems to back peddle quite a bit..they tell you all
this stuff on the phone, yes there will be an agreement in
the mail, but at the same time, they want your money now...

I had this happen before..was not over a lot of money..I was
actually told that they would not send out a letter of
agreement until I actually gave them money...ok whatever, bye...

They make all these payment plans over the phone, and make
promises that you will get your payment intent letter, but
get very pissy when you say, I will wait for it...they seem
to want their money now, letter or no letter...

If you pay them first, I bet that recorded phone agreement
will never-ever be found...lost with a bunch of other
phone agreement promises..

in writing is a must!

[GoingDown]

phone conversation was less pleasant today. I was handed off 3 times to more aggressive people. Insisting we get this (ach) electronic transfer setup. I wouldn't budge. I told them there would be no money in the account today as I am waiting for the $$ to arrive so why bother to set up something. They kept on throwing the urgency of 1st payments by 2/26 and that after that date I will be out of luck. yada yada....... I said that either make this work or it's CH13 for me. so them they agreed to wait until next Tues.

Maybe they think I am blowing them off and that by applying pressure it will change things. I still get the feeling something ain't right, but if they send me something legal I can review it. I also asked about signing an agreement but they said it wasn't necessary. hmmmmmm.......

You're going to get screwed if you don't get this in writing. They will gladly take your 17K and then come after you for the rest plus interest and other fees after they get that deposited into their bank.

Even if you do get this in writing, in February 2011 you will get a huge 1099-C form in the mail and you will probably owe a huge tax bill that year. And the IRS has a lot more power to collect than ordinary collection agencies. You have assets, the IRS loves to go after people like you, even if you think you are insolvent. They won't probably see it that way. Have you heard any of the horror stories of taxpayers being treated unfairly by the IRS?

For a debt this large, BK is a better option for you.