Negotiating Debt? (Don't know what this is called)

[moe]

I came into about $10,000.

We have about $85,000 in debt. I am the only one who can declare. I have $45,000 in debt.

My attorney knows I do not want to declare bk.

She said that she could try to get the cards to take the $10,000 in some kind of negotiated settlement.

Yes, I know I have to pay taxes on it.

Has anyone done this?

Is it a bad idea?

What could I expect?

She says she'll charge about $600--I am thinking her fees might be around $900...since she's $300 an hour.

I like her personally. I don't know if she is experienced at this.

I'd rather get the debt down and pay it off. It is not pay-offable at this point.

I'm a Chapter 13 and I'd like to avoid BK

[LALADY]

You can negotiate yourself instead of someone else doing it.

Check out the collections forum for great advice from members who do it themselves and how they do it.

[keepmine]

You can do this yourself.
At about the 150 day mark of default, I got an unsolicted settlement offer from Cap1 for 50% of the account balance and from Chase at 45%.
Maybe you can wheel and deal and get 'em lower.

[moe]

So you basically have to stop paying back your credit cards? There is no way to do this without ruining your credit? That kind of sucks.

[flyinbroke]

Yeah, no one is going to settle as long as you are making timely payments. You have to bite the bullet and take the ding on the credit. Even then, you may not get them wanting to settle. I am going on 4 months with three of them and they have not sent any settlement offers. One has violated the TCPA by robodialing my cell phone repeatedly after getting a "stop calling" letter and I am thinking of going for settlement money thru them...(evil grin)

[ForumReader]

I'm a Chapter 13 and I'd like to avoid BK

I am a little confused. Isn't filing CH 13 defined as declaring BK?

Hope it works out to get your debt settled to your favor.

[flyinbroke]

I'm a Chapter 13 and I'd like to avoid BK

I am a little confused. Isn't filing CH 13 defined as declaring BK?

Hope it works out to get your debt settled to your favor.

I am guessing he meant that he only qualifies for a CH13. Personally if I have the BK ding on my score I would rather have a 7 too.

[ryan]

Are you talking about trying to settle the $45,000 or th $85,000?....

from all the debt settlement materials I acquired sometime ago, I'd say the $45,000 MIGHT be possible, IF its only a few individual creditors. ...the problem I can see, is if you have many creditors and some prove unwilling or slow to settle, its more likely you'll be sued by one. When that happens, if you are then forced to file BK, all the money/settlements paid to that point was wasted.

That what I've come to see as the "catch22" of debt settlement.

[debtinohio]

The other problem is the balance goes up pretty fast with fees and interest charges, the $45000 could easily become $60000 in no time.

Best offer I got was 15% from an agency representing Amex. I gave up as I had over $200K in unsecured and it was hopeless, each month my total unsecured increased a few thousand in fees/interest.

I'd rather declare 13 and exempt the 10,000.

[moe]

Yes, phooey. Many creditors. Well, let's see...I think husband has more different types of cards than I do.

So perhaps I should settle? We each have about 43,000 in debt.

I can declare if it comes to that but he cannot, for professional reasons.

So I actually have five cards but really only three different creditors: Citibank, Chase and Bank of America. I could transfer the small B of A debt to Citibank. In fact, I should do that anyway.

I HATE not paying my bills. HATE IT. Just the thought of not paying my bills freaks me out. But we can't pay for anything else at this point.

Would it be possible to pay down $43,000 or so with a $10,000 chunk of cash?



I think I would like to bring in an attorney because it makes me feel safer in terms of avoiding them selling my debt and getting a firm agreement.

Dang though, I do worry about paying the IRS....How much will we owe in taxes then?

We'll also save ALOT on attorney's fees by paying down the debt, rather than declaring bankruptcy. At least half of the chunk of $ would go to that, anyway.

SO HERE ARE MY OPTIONS

1. Try to negotiate down my debt of $43,000 Do I have to wreck my credit to do so? I am the only one able to declare bankruptcy. I have excellent credit because I have been paying these bills like clockwork. But now I can't buy food so something's got to give.

2. Negotiate down his debt. He can't declare. But he does have worse credit since he missed a few payments. Also, the CC cards are worried about him. They cut off his balances.

3. Do neither and wait a year and then declare? (We can't declare right now...we have an issue with an insider payment)

Do you have to not pay your bills for 120 days?

Do you have to ruin your credit?

How long does it take for your credit to be rehabilitated?

Is this the wrong forum for this question? Should I move the question to another forum?

[BCA2009]

So I actually have five cards but really only three different creditors: Citibank, Chase and Bank of America. I could transfer the small B of A debt to Citibank. In fact, I should do that anyway.

Don't transfer any balances. That is new debt. And depending on how soon you plan on potentially filing, it could be non-dischargable.

[ryan]

...SO HERE ARE MY OPTIONS

1. Try to negotiate down my debt of $43,000 Do I have to wreck my credit to do so? I am the only one able to declare bankruptcy. I have excellent credit because I have been paying these bills like clockwork. But now I can't buy food so something's got to give.

Do you have to ruin your credit?

You will not get the CC companies to negotiate at all, usually, unless you are behind in your monthly payments, which will adversely affect your credit score.

I'd agree, you should NOT use one card to transfer balance to another card at this stage. ...could be a problem if you decide to BK.

[moe]

Hi--

But I'm not going to file for a long time. I have an insider payment issue that cannot be fixed. So it actually could be a year.

For me, the point is to avoid filing. So is there a reason not to transfer if you don't plan to avoid filing?

I guess they might be annoyed that they got stuck with a chunk of debt and then you are trying to negotiate with them?

But anyway, do not want to file. My hope is to take every penny and get them to negotiate.

[BCA2009]

Hi--

But I'm not going to file for a long time. I have an insider payment issue that cannot be fixed. So it actually could be a year.

For me, the point is to avoid filing. So is there a reason not to transfer if you don't plan to avoid filing?

I guess they might be annoyed that they got stuck with a chunk of debt and then you are trying to negotiate with them?

But anyway, do not want to file. My hope is to take every penny and get them to negotiate.

You may be OK transferring, but I would advise making monthly payments on the new debt for a while. If you create new debt without the intention or ability to repay, it could be consider fraudulent. The more time that is between the transaction and the BK filing would lessen the chance of an the creditor from filing an AP. But it is still fraudulent if you don't intend on paying it back.

I'm not being critical, just sayin'.....

[moe]

This is the difficulty, for me.

I'm not sure I am going to declare. But transferring things and rearranging my debt would prevent me from declaring. Or give me a better shot at not.

But I can't do this because I am not sure. So it's like this catch 22.

It would not be 'new debt.' It would just be the same debt to a new creditor.

I reallyreallyreally don't want to declare bankruptcy. Even with my impossible debt load and inability to pay my bills, I feel like there HAS to be a way to avoid it.

Of course, if they would lower our interest rates a bunch and lower our minimums, we could probably make it. That is so frustrating, to me. The banks borrow money at zero interest so they would still make money at 3 percent interest. If I could have 3 percent and lower minimum payments then I could repay eventually.

Also, they changed the APRs from a lifetime agreement for some bogus reason. And jacked up my minimum by $400 because I WAS TRYING TO PAY DOWN THE HIGHER INTEREST RATE. Are they not such a-holes? The new Obama law says that my higher rates will be paid off first. So they jacked up the minimum so I can't pay back the higher rate!!!!!!

Anyway, that's my vent. I have no desire to declare bankruptcy or commit fraud. But, am I trapped in this particular configuration of debt because I am considering bankruptcy?

At this point, one obstacle is not paying my bills. I have a really hard time letting go of the idea of paying my bills.