Need help in making a decision

If you have no job and no assets then you are uncollectible i.e. judgment proof as long as you will not be getting a job anytime soon and you do not care about your credit. I probably would not even settle for 50% if I were in your shoes. I would shoot for more like 10-30%. There really is no point in borrowing money from your brother and owing him when you can owe these companies and not care. I once had a collector hounding me years ago when I had nothing for $2000. He asked me why I couldn????????t borrow the money from my family and pay him. My response was why the hell would I want to owe them $2000 when I could care less if I owe you. It took about a year of him calling about once a month but I finally settled with him for $250. Unfortunately this will be a slow process. You will have to let them sit for over a year before they get to this point. My debt was 2 years old when he settled.

The taxes you will owe are based on the difference between the amount paid and the amount charged off. It kind of sucks the way they do this but you end up paying taxes on an inflated value from all the fees and penalties. For example if you settled for $1000 and you owed $3000 then $2000 dollars would be considered ordinary income. This would go on your tax form as normal income and would be paid at your tax bracket. This has to be filed on form 1040 so you can not use the EZ form but 1040 is easy too since your taxes are not complicated. In reality you would pay almost nothing in taxes on it if you have no income because of the standard deduction. For example if you owe 13,000 and you settle for 3,000 then you have to pay tax on 10,000. The standard deduction is around 8,450 so that leaves you with about 1,550 that tax would be owed on. Taxes on 1,550 according to the 2006 tax table is 154 dollars or 10%. This makes sense because the lowest bracket is in fact 10%.

hey thanks for your response that way sounds very good , but the only thing that im afraid of is getting sued even thoghy i have nothing for them to syue me for, but im looking down the road a little i just dont want the bills getting any higher than they are . will they. and whats the worst case scenerio im looking at if i just say f it and dont pay thanks john

what state do you live in . some states don`t allow garnishment and not as likely to get sued

I think none of them will ever sue you. Generally a CC will not sue if you owe them less than 5k. In your case you owe 7 cards approximately 2k each. The next thing is before they sue they are going to determine if you have anything they can take. Your only asset is a car and they can not take it. You have no job for them to garnish wages. You have no home. I really doubt they would waste their time getting an uncollectible judgment on $2,000. Also, since the accounts are charged off the amount will never change from what it is today. It is possible for them to change if they sue though because an interest rate can be applied at that point in time according to your state laws which is around 10% I think in my state. As long as they don????????t sue the amounts will stay the same though. I would just let them sit and get a job and try to settle them as you have the money. Also if any of them do decide to sue make sure to answer the summons and show up in court.

I think the highly unlikely worse case scenario is all 7 sue you. Then you have to go to court 7 times and end up with 7 uncollectible judgments against you. I think you have better odds of winning a multi-state lottery like the powerball which is something like 1:150,000,000. Probably more than likely they will just sit on your credit report for 7 years until you can make them fall off.

thanks guys i guess i just wont pay them anyone else out there with ther opinions are welcomed thank yo john

DollarsandSince, my husband had a Lowe's credit card for $2000 and they turned it over to a law firm. The law firm sued us and got a judgement against us.

hey guys hers what i owe i really wouldnt want to get screwed in the end and pay more even if i dont work but i value your opinions anymore plz keep them coming 1= sst i owe 562.00
2= tribute = 1900.00
3= credit one = 1200.00
4= hsbc direct merchants = 800.00
5= hsbc orchard = 350.00
6= hsbc direct merchants = 2000.00
7= capital one = 5000.00
its been about5 monts since my last payment to all of these cards. and in the last 2 months i have been trying to negotiate with them via us mail, faxing them and talking to them on the phone and they dont seem to want to give in. i contemplating like someone mentioned on not paying since i dont work and i am uncollectable because i dont owe anything. do you think if i wait any longer they will com and give me some kind of offer? i just dont want to get f---d at the end and have to pay a lot more than i owe. . i am tempted also on not paying. but need to know the consequenses. any feedback would be appreciated im just lost dont know what to do , or the right thing to do please help john

oh and by the way i live in illinois thank you hope this helps thanks john

Quote:

thanks guys . anybody else who would like to reply to my post? thanks j