looking for some advice

Okay, so you want to know about the pros and cons of all the options available before you to get out of debt. lemme tell you that its the wisest way to deal with this problem. Often people blindly adopt one, without sparing thoughts to the other available alternatives.

Bankruptcy: if your debt is overwhelming and beyond your ability to repay them, then you may not have any other option other than filing bankrupt. The good thing about it is that
It'll stop the creditors from filing and getting judgment against you. It'll also restrict them form garnishing your wage.

If you're filing ch-13, then you're actually committing yourself to a long term repayment plan that's convenient to you.

The bads of bankruptcy, it'll stay on your credit report for ten years. Moreover, it'll ruin your credit . Lenders may not forward you a loan during this period.

You're losing your possessions. The trust, set up by the court, will liquidate your assets and will pay-off the creditors.

The secured loan lenders (auto, home) can obtain a stay over the court order and can continue with the repossession act.

Bankruptcy can't let you get discharge over the loans like -student loans, child support, alimony and so forth. Hence, you need to continue paying for those.

Debt Settlement: a debt settlement company will negotiate with your lenders and will try to reduce the amount you owe to them. You then need to take up a monthly payment schedule suggested to you by them.

The goods: you no-longer have to deal with the multiple creditors. You're forwarding one single payment to the settlement firm and they'll take care of the rest.

It'll stop the harassing phone calls form the lenders.

You can pay-off all your debts in 4 to 5 years.

It'll stay in your credit report for lesser years (7 years) and also your credit will start improving from the day one as you are saving a substantial amount of money through the settlement.

Now the cons, if you fail to get a written statement form the creditors and collectors, the balance amount may resurface in the future with another CA.

Though it'll improve the score later on but there will be an immediate adverse effect on it.

The debt settlement company will take a monthly maintenance charge for managing your account. Also they may charge a portion of the money you have saved through the deal.

However, if settlement is an available option for you, you may wish to try it out first than filing bankruptcy.

Another con of debt settlement is you may face lawsuits and the company may not work with the Debt Settlement company. Also, if you pick a company, make sure you check the BBB and google the company. There are many fake companies out there that will take your money and run.

Hi Dan
I was still am in the same shoes you are in. I cumulated most of 130k (same amount as you!!) over 5 year period. I am down to 68K debt at this moment. I missed lot of payment here and there so I was near 30% on my apr on most of cards. credit counseling will spread your debt in to 5 years with about 10 % APR according to counseler I talked resulting 3k payments monthly. To settle your accounts you need about 40 to 60 % of your total debt.
If you have high balances on few cards try to settle before 180 day past due to avoid litigations. Before you do any thing tell all of credit card companys to use only your cell phone as ONLY contact phone #. Otherwise they will drive you crazy night and day.

Thanks everyone for the comments/advise. I do have just a few follow up questions:

1. Assets - I do not have any (car, house, etc); what else falls underneath the category of assets?

2. Seeing as I have never had a late payment or missed payment, would that hinder a credit counselor's ability to negotiate with the creditors (I'm not referring to defaulting first, just trying to get on a payment plan, as long as it may be).

3. The debt settlement company I contacted (well I contacted several, but this would be the one I would work with) promised that creditors would not be contacting parents, friends, work; is that a claim that seems reasonable? I don't mind calls made to myself, but I just don't want those close to me involved.

Thanks again...

As long as you stay in contact with them, I doubt they would call any of your references. Usually they call your references when you avoid their phone calls.

Thats where my issue is. The debt settlement program I am considering specifically advises not to pick up any calls that I can't ID. Supposedly they would be re-routed to the debt settlement co. However, I don't know if to trust that statement that all calls and communications would go to them...

can i pay as low as 100 to 150 dollars a month

it sounds like in your post that settlement is not something you are comfortable with. but yet settlement would be your better option vs bankruptcy. not that bk is all that bad, but its worse for your credit. Settlement is your best route but there are things that can happen like the collectors do get nasty and do call friends and family (even though its illigal) they can sue you, not that that is really as bad as you think either.

but be sure what ever you decide its a decision you are going to have to stick with for awhile even when things get tough or down right scary. The fact is your in debt that you cant pay. you need to do something.