Does settlement look better on credit history?

[Kkole425]

They just keep calling. I am now wondering why I paid my phone bill. If they start coming across with settlement offers and you take the offer what does that do to your credit score. I know you will owe the IRS because of the 1099. I don't have the money to settle but I could borrow maybe. I have almost $200,000.00 in unsec. debt. I guess I am going thru the natural process of bankruptcy and I am at the what if stage. Someone needs to do a thread on the stages of bankruptcy and what it does to your brain.

[Tbornetun]

It would be a waste of your money to settle when you are going to BK anyway.

[LuciluS]

They just keep calling. I am now wondering why I paid my phone bill. If they start coming across with settlement offers and you take the offer what does that do to your credit score. I know you will owe the IRS because of the 1099. I don't have the money to settle but I could borrow maybe. Not a Good Idea IF you are filing bankruptcy within say a Year from now.

I have almost $200,000.00 in unsec. debt. IMHO, Bankruptcy is your option. I guess I am going thru the natural process of bankruptcy and I am at the what if stage. Someone needs to do a thread on the stages of bankruptcy and what it does to your brain.

The 2005 Bankruptcy changes put a lot more Paperwork on someone filing bankruptcy. With that said, it takes a while to get all the paperwork completed.

BUT, before you get the paperwork, I would suggest you and your hubby (if possible, set up a few free Consultations with Bankruptcy Attorneys. Have some kind of printed spreadsheet that shows your gross monthly income less your expenses. Don't include the expenses you plan on bankrupting.

I know, in your case, the expense side might be a bit tougher as you've recently moved. Moving from one state to another state is a question that needs to be addressed by an Attorney. So, make a list of questions you might have and ask those during your free consultation.

FYI, we stopped paying on our Credit Cards last Sept. except one where I had a balance transfer in Aug. & Attorney said make 3 pymts & try to send more than minimum due. I did.

Finding this forum has been so much helpful in our case, as our Attorney didn't look close enough at our income, so we are waiting until 9/30/09 to file using Mar-Aug. Gross Income for our Chapter 7.

If you haven't yet, you need to stop charging on your credit cards & try to live without them. That's probably the first thing all the Attornies will tell you.

Also, just read a lot of the posts here and use the 'Search' Button in the upper right part of the forum. I have learned so much from this Forum, I feel very confident our Chapter 7 will be smooth sailing.

Luci

[JRScott]

Turn the ringer off the phone.

Buy an answering machine.

Let the answering machine pick up all calls. Call friends and family back.

If it makes you feel better call back the creditors once a month to tell them that your situation has not changed and you do not have the money at this time and are not certain when you might have the money.

Make sure to get any offer to pay a smaller amount and count as full amount in writing prior to paying.

[Flamingo]

To the OP - you received excellent advice above. You need to look at this straightforward and without emotion. How on earth are you going to pay back $200,000 of unsecured debt? Unless you have the winning LOTTO ticket or the Sweepstakes guy with the camera entourage shows up with the giant check at your front door at 7:00 a.m., you know what you have to do. Unless you fully expect to have a high paying job sometime soon to gradually eliminate all your debt, you need to figure out what you have to do to put you in a place to start over and not put yourself back in the same spot when it is cleaned up. If you start on the credit road again after filing, you will be back posting in this or other forums again asking what happened or what should I do...you will see what I mean after all this is over. Best of luck to you.

[bk4sky]

i asked my lawyer about that in the beginning and he basically told me its both going to ruin your credit so why not just do the BK. that is a large amount of unsecured debt, i think your best bet is to get a fresh start