What to do next - new at this!

I am a big advocate of "tough love." I was basically in your son's same position, and my parents made me clean up my own mess. I don't hold that against them one bit, because it taught me something and you can bet I learned my lesson well.

1) Creditors will only settle if you can pay them in a lump sum. They will usually settle for 75%-85% of the full balance if you can pay them immediately. The only time they will 'wipe out' a portion of the debt is if you settle with them.

2) The longer you wait to settle, the more likely they are to file a lawsuit. When they file suit and get a judgment, they usually won't settle anymore. From there, they go on to get garnishments, as you know.

3) The judgment/garnishment he has most likely cannot be stopped, unless you pay them in full. They might settle for less if you pay a lump sum, because they do factor liklihood of continued employment, and they know if he becomes unemployed then they won't get anything.

4) The best way to go about it is to tackle them one at a time. I'd say start with the smallest balance, and try to settle. Then work your way up. But since these are in collections, you might not have the luxury of time -- If any of them are going into legal/lawsuit, then take care of those first before the latent ones.

For me, I had to really evaluate my finances and start saving. That meant no more parties, no more bars, just not spending money on stuff I didn't need. It took mind power to give up a lot of luxuries. But, as soon as I did that, I was able to save $1000/month and in just 2 years I paid off over $15K in credit cards and other bills I had out in collections.

Unless you feel that he has matured enough to be responsible with his finances, I would not suggest taking out a loan in your name to dig him out -- That may only enable him to go back to his old ways. If you honestly trust him and want to settle this all for him, then make sure you get an agreement as to how he will repay you -- and make sure he follows it.

Sooner or later those chargeoffs will show "Paid" and his credit will start to improve. When the collections are all taken care of, then he will be able to get that house in a couple years.

Thanks for the advice. You and my son sound live you were in very similar situations. He blew most of this on clothes and fun. He also got caught in an on-line gambling habit. I told him that I will not do the loan unless we set up automatic deposit from his paycheck to my account. He has met a special girl and had changed a lot since, still I don't know that he completely understands or that I trust him with money. He has been in a lot of pain over the debt collection but has not taken the big step to stop spending and start paying.

Guest- |I know how you feel, my youngest is the same way. He got himself into a big mess- we helped him out of it- he paid us back and thought he learned his lesson--wrong :lol: He has settled down alot thanks to his girlfriend and is seeming to become more responsible- but I still don't trust him completely with money management-we don't give him money anymore- if he needs help, we loan him money till next payday and he pays it back, or we make him work it out--he doesn't like that- so he doesn't borrow so much anymore!! Hang in there!!..karen :D