Do I settle?

[wabbit]

I am really undecided in what I am doing. Foreclosure is very close if not happening already, last letter I got from USBank said they would start the process. It has been since October that I have paid. Loan is 127K. Second mortgage has already written off the 8K debt. AMEX is suing me for 15K after 6 months of non payment, and Chase has been calling every day. I decided to call Chase thinking I should settle since the last activity on the card was a cash advance for $2000 and I was only able to make a couple of small payments after that. They said they would settle for about 43% of the debt, $1200. I can pay from my tax refund. But would this be a waste of money? I am not sure I will file bk, my main income is from social security and anyone who gets a judgement would get $100 a month. Plus after foreclosure my debt isn't that huge, I'd rather be saving the money of course. I'm thinking that I'm probably going to get some of those 1099-Cs from the combined debt being written off, and am now reading about filing insolvency. I have no assets so I think this would work for me. I'm worried about this cash advance being seen as fraud and me getting in big trouble. What should I do??

[catleg]

I doubt the cash advance is a problem. You'd be better off spending the money on a bankruptcy case. Do you have any assets to protect?

[wabbit]

I don't have assets really, I have a lot of useless stuff but nothing anyone would want! The card in question was rarely used, that is why I'm thinking it may be a problem.

[keepmine]

Most bk lawyers will give a free or lowcost intial consultation. Schedule a few and lay out your concerns.
I'd not use the tax refund to pay unsecured debt. Use it for living expenses and legal fees should you file.
How long since the cash advance?
Worse case, the creditor files an AP and you settle for some portion of the $2K. It''ll not afftect the rest of your bk.

[HHM]

Unless you are in a position to settle all debts, which is doesn't sound like your are, or are even close, then settling any single debt is a waste of money as it doesn't solve the problem. You are BK, own up to it. Its the only way you will get financially back on track.

[wabbit]

The cash advance was 6 months ago. No I'm definitely not in a position to settle all of my debts. I am confused and scared and don't want to deal with a bk, but ultimately I know that I need to get it done.

[ryan]

Along the lines others have already mentioned:

If you settle with one, then others will, at some point, find out, and may be incentivized to pressure you more or even file a lawsuit. ...so what will you have gained?

[jwmc1]

Unless you are in a position to settle all debts, which is doesn't sound like your are, or are even close, then settling any single debt is a waste of money as it doesn't solve the problem. You are BK, own up to it. Its the only way you will get financially back on track.

Exactly...do not do it, unless you are pretty sure you can do it for all of them...when I was in this situation, I settled with everyone, because I would not be able to file a 7 and a bankruptcy would have been a problem for me at work. I actually think filing for chapter 7 is easier on your credit than settling with your creditors.