Should I close my cc account before I default?

[treehugger1]

I understand your reasoning. However, if you do not find a job, how will you qualify for a BK 13. I can see that if the CC debt was included in a BK 13 plan at 100% your trustee might allow you to keep everything else. I still think this would be rare, because you will be ruled by the exemptions of your state (or federal exemptions if your state allows them.)

You are certainly in a tough situation as you want to protect your credit and work out a settlement. And, if you don't get a job to keep up the payments when UE runs out, you will essentially have thrown good money after bad.

Best to you.

[GoingDown]

Thanks for the reply. My 401k is available and I can get to it but I am aware that I will loose 20% in penalties and owe the IRS the other 10%. I can arrange to give the IRS that amount when I take it out.My wife can take out a 6k loan with 3% interest for 5 years.

I am in no way saying I am trying to the honorable thing to pay back the card, I am trying to save an investment vehicle, a very rare and fully restored vintage vehicle from the 50s from being taken by a judgment. The vehicle could be worth up to 100k in the next 20 years.

One thing I have learned from the probate of an insolvent estate of a dead relative is that the creditors rarely know more than what you tell them, and mainly go by what is on your credit report.

Since a vintage vehicle is unlikely to appear on your credit report, they probably don't know about it unless you tell them.

[Samba]

It would only sell for that if you could find someone willing to purchase it.

True. Which makes me wonder how a trustee would be able to determine it's resale value. Blue book?

One thing I have learned from the probate of an insolvent estate of a dead relative is that the creditors rarely know more than what you tell them, and mainly go by what is on your credit report.

Since a vintage vehicle is unlikely to appear on your credit report, they probably don't know about it unless you tell them.

Wouldn't they automatically file a discovery subpoena or something?

[keptdigging]

B of A is notorious for settling for much less than you owe. Do some research here. The general advice is to never use retirement funds because they're exempt in a bk. But you might be able to settle with B of A for 25% or less. However that will require a lump sum.

[Samba]

Thanks for the advice. I have 2 weeks to decide if I want to use my 1st $400.00 unemployment check to pay a $300 minimum payment. My gut says default but something else says a job is right around the corner don't do it. I really want out of this house in the next year so I'll need credit to get into another one.

[Samba]

I did some research but have not found much. Is it true that if they sue you for a judgment that they can only put a lien on vehicles & a houses that are owned? I was under the impression that they could force sale to satisfy a judgment. If this is true then I would never even consider bankruptcy because I don't own my house yet and have no intention of selling my vehicles. Is this true?

[catleg]

In most places a judgment creditor can execute against personal property of the debtor, if it can be identified. Usually this only happens with cars. So if the car is titled in your name then it's at risk.

TX has some other protections for debtors such as homestead and protection against wage garnishment, from what I understand.

But the car, as an asset class, is probably the most exposed asset class there is.

[daglo]

I settled with B of A on a 28,000 credit card bill for 3400. I had to pay in 6 months, but I scraped up the funds and did it. I let some other creditors who were not willing to work with me go, and put all the money towards my B of A. Yes, it did hurt our credit score, but it was already shot, and I got rid of this large debt.

[Samba]

Thanks for the reply. How long did it take for them to offer you the settlement ? From the time you stopped paying? I am trying to figure out the time frame for charge-off to settlement to avoid waiting too long and risk a potential lawsuit.

[catleg]

I got a similar offer (10% buyout = 90% writeoff) from B of A right around the 6 months late point. Doesn't get much better than that.

Of course, if it's a big debt*, you're trading a dischargeable private debt for a non-dischargeable (but smaller) tax debt.

Decisions, decisions.

* Really any debt, but mostly matters only in size.

[Samba]

Of course, if it's a big debt*, you're trading a dischargeable private debt for a non-dischargeable (but smaller) tax debt.

Decisions, decisions.

* Really any debt, but mostly matters only in size.

I'm not sure I understand.

[catleg]

You'll only get a 1099-C if the forgiven debt is over $600.

Just being obtuse, sorry.