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Is it better to consolidate debt before trying to settle?

Date: Thu, 03/26/2009 - 09:39

Submitted by anonymous
on Thu, 03/26/2009 - 09:39

Posts: 202330 Credits: [Donate]

Total Replies: 2


I have 31K with AMEX, 7K with Capital One, & 20K with Citi. All business debt personally secured by me. The business is failing and I won't be able to make the payments. I have been current so far, but I recently lost my house and have only been able to make payments by selling off all of my furniture. Now I am not going to have the money to continue making payments. My question is this: right now I have the option to balance transfer up to 11,000 to Citi as I haven't missed any payments yet. would it be better to transfer the Capital One balance over to Citi? This would mean that I would only have to deal with 2 creditors instead of three. Would this make the process easier and better on my credit report? Is it easier to get a good settlement from Citi with a 27K vs. a 20K balance? Is it better when looking for a settlement to have multiple creditors or less creditors?
Thanks


Hi Lookingforhelp,

If you are looking to stop paying on a nearly $30,000 card, make sure that you can win if you get sued, as you likely will be. As soon as you miss your first payment, they will immediately raise your interest rate to as high as 30%, and will call you repeatedly.

I would say you should file Chapter 11 for the business and Chapter 13 for yourself. You probably should have filed before you lost the house, you may have been able to keep it.

As far as balance transfer, please be very careful to read the fine print. What is the initial APR? If it is low, is it an introductory rate? If so, how high will it go and when? This info will all be on the legally required disclosure notices.

I wish you the best of luck,

chrys


lrhall41

Submitted by Chrys Henderson on Thu, 03/26/2009 - 23:38

( Posts: 2538 | Credits: )