Was considering BK, now considering settlement.....concerns on statue of limitations

[signal]

I was considering BK, my wife had a business, it failed after many prosperous years, and we ended up with a lot of unsecured debt. Because of my personal mortgage, I can't pass the means test as a business debtor.

Fast forward, my income continues to climb, and I worry that BK just isn't an option for me, at least Ch 7. So my plan is to just wait things out. I am concerned on the Statute of Limitations however. I opened the credit cards in Louisiana, which has a SOL of 3 years. That is where the accounts were opened, and just about all the debt was incurred. We moved to Florida in 2005, and did continue paying on some of the accounts until 2009. So which SOL applies? Florida is 5 years and Louisiana is 3 years.

It's possible I could settle my debts for .20 on the dollar. One creditor offered me a $8k settlement on $35k of debt.

My credit score is around 680. The only "credit" things I still pay on are my mortgage and two cars.

Total unsecured credit debt is around 100k. Yearly income was 165k in 2010 and 185k in 2011.

Does anyone know on the Statute of Limitations?

[GoingDown]

They'll be suing you in Florida, so it would be an uphill fight to argue with them in court that the LA SOL should apply. You might win on those grounds if you are lucky and find a judge with an open mind, but most of them seem to prefer to rule in favor of creditors, and seem to dislike people who try to represent themselves in court, since judges were once attorneys themselves.

If you settle them, be prepared to settle all of them within a few months, because once a settlement hits your credit report they will come out the woodwork like cockroaches trying to get you to pay them all.

Also, if you settle with them, save back some money this year to pay the taxes on the amount forgiven or cancelled next year. Each one will send a 1099-C form to the I.R.S., and it will be treated as income, unless you can get the I.R.S. to believe that you were insolvent at the time you were paying off all of these creditors. They're going to wonder about that.

Even with the taxes, it's still cheaper than paying them all off in full.

Don't count on all of them being willing to settle for 20 cents on the dollar. Once they see you paying other creditors they might wonder how much money you have and decide to try to shake you down for more money.


If you can afford to settle all these debts and pay the taxes next year, then okay. But if you can't afford that, maybe bankruptcy is a better option for you.

The settled debts will still stay on your credit report for 7 years in the negative area. It will say something like... "Settled for an amount less than what was owed." Creditors won't like seeing that, either.

[catleg]

I think you need a lawyer to "represent" you to the extent that he writes each creditor a scary letter showing that you have a defense when they start showing up with demand letters. If it appears you will be a tough nut to crack they might just not bother with you.

"Choice of laws" is a part of every law school curriculum so any attorney should "get it" if you are properly represented.

[keepmine]

Looks like Fl. has a borrowing statute.

http://whychat.5u.com/States/state-fl.html

95.10 Cause of action arising in another state.
--When the cause of action arose in another state or territory of the United States, or in a foreign country, and its laws forbid the maintenance of the action because of lapse of time, no action shall be maintained in this state.

[karm43]

Good luck. I thought I was almost out of the woods on some of my creditors 6 judgements. What happened is once they see one they all follow. Most of them I had about 7 to 8 months and I would have been good. Maybe you will be one of the lucky one. I know chase and capital one will most likley sue.