Your advise is appreciated

[virginia]

First, I'd like thank everyone and also say that I've learned a lot as a lurker on these forums. Of course, I didn't just happen to accidentally come across this forum.

Over the years, I've accumulated roughly $80k in unsecured debt (3 credit cards A, B, and C). To simplify, I'll break the cards down to $30k, $30k, and $20k. As most of you know, the stress level of having debt, let alone this much debt, becomes overwhelming at times. I was lost and intimidated by the whole ordeal. Truly one of those "I wish I could turn back time" phases in my life. At $1500-2000 just for monthly minimums, I stopped making payments as of December 2008 and have gotten calls to stop as well with C&D letters.

Fast forwarding to now, I recently got a summons for a civil suit. It had no date on it. To put it bluntly, I'm freaking out and am lost. I've just spoken to family (who didn't know about my debt) and they're willing to help what they can. But I know $80k is beyond what they can help me with. And I know it's a terrible thing to put loved ones through.

We talked about how much I can negotiate with my creditors as they'd like to help me out of this. The law firm suing me holds my $30k and $30k debts and I've gotten letters as recent as the day before I got the civil suit summons that they're able to take half of that. My question is, is it possible to deal with them to come down to a lower sum? If so, what do you guys think are the lowest that I may be able to deal with? Since I got the civil suit summons, am I too late?

I haven't talked to the creditor of my $20k debt yet. They have not contacted me beyond sending me bills. Do you guys think that I would be able to make a deal with them to come to a lower balance?

Is this something that I should/could be doing myself or would you recommend I get a lawyer or debt consolidation service for this? Being unsure and nervous, I know I may freeze up.

I'm asking because bankruptcy is something I'd really like to avoid as I'm trying to apply for jobs that bankruptcy may really hurt my chances. But still, do you think this would be a better alternative? If I were to go this route, I'm not sure if Chapter 7 or Chapter 13 would be a better option. Am I too late to either negotiate a lower sum or start a bankruptcy process?

I am a homeowner. Married. 2 cars, but those are long paid off.

Thanks in advance and any and all responses would be appreciated.

Lost in VA

[nc73]

It's spelled advice by the way. Get a lawyer would be my recommendation.

[virginia]

Ugh. Damn typos!

[virginia]

Thanks nc73

[DeadManCrawling]

Unfortunately, creditors like major CC companies simply don't care to negotiate in most cases.

The prospect of negotiating settlements with all creditors comes up periodically on the forum. There are some who try it. Most people decide not to or give up in the end.

Creditors can monitor your credit report and will know that you are settling some or all debts, or attempting to. Once you settle with one company, your credit report will be noted as "settled for less than owed" or something similar.

That is an instant heads-up to your other creditors, and provides them leverage, or might inspire them to sue.

If you get through most of them, the last few will have greater leverage, knowing that they are what stands between you and freedom. IF you get that far.

Creditors are sneaky. They have been known to agree to settlements but craft agreements that are carefully designed to screw you further. For instance: YOU think you have just settled a debt for 20 cents on the dollar. It all looks good. The next month you receive a call from ANOTHER collector. They have been retained to collect the OTHER 80% you THOUGHT had been taken care of in your settlement. It happens. A LOT.

BK is not a terrible thing, in fact it is probably a more sane and gentle way out. It can be painful, but it does not have to be.

Educating yourself as much as possible is a good idea regardless.

If you get hit with a garnishment or judgment before filing it is not the end of the world. There are good reasons some people actually accept garnishments and do not ever file. This is not good for all people, but makes sense with some types of debts and financial circumstances.

You are in a good place to learn, and most of the people here are well-meaning and kind. I hope you will give some serious thought to the advice given and that you will also consult a few attorneys.

First thing is to destroy the fear, apprehension, and any shame that you might feel. Get past those things, and you will begin to find your answers.

Best wishes,

-dmc

[virginia]

Wow. I never heard of a creditor agreeing on a settlement and then selling off the rest to someone else.

Thank you for your advice. It's greatly appreciated.

[flyinbroke]

Wow. I never heard of a creditor agreeing on a settlement and then selling off the rest to someone else.

Thank you for your advice. It's greatly appreciated.

They do it all the time. Many people who thought they would settle wind up right here because they settle for a small percentage, pay taxes on the rest THEN find out that the "forgiven" portion was never forgiven but sold to a bottom feeder. You pay more in the end.

Find an attorney. The minute you file BK, the suits come to an end.

[virginia]

Thanks flyinbroke. Is that the case more times than not when you settle, even at their 50% offer, with a creditor?