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Critique my settlement plan please.

Date: Wed, 04/21/2010 - 11:31

Submitted by rown
on Wed, 04/21/2010 - 11:31

Posts: 70 Credits: [Donate]

Total Replies: 7


Hi All. looooong time lurker new poster. Ive been reading day and night and am about to start my own settlement journey in the next few months. If its ok Id like to post a general sketch of my plan for settlement and would like you experts to tear it apart for me (please try your best to separate real researchable facts from opinion Ive seen a lot of both on here). Here we go......

BACKGROUND:
State: South Carolina
Total Debt: Around 40k (all cc's)
I am not late at all presently. Fico around 675 Due to high debt load.

My plan in brief is thus:

1- change banks as one of my creditors is also my primary bank.
2- default
3- Occasionally take calls citing hardships, greatly increased monthly expenses, a fire a few years ago with no insurance (100% loss of belongings), parents health/financial problems. All these are true incidentally not that they will care at all.
4- Make settlement offers myself and/or respond to offers made.


Assets:

No home. Live at property owned by my parents. Pay them rent when possible, do a lot of work for them when not.
Truck- Lien is about break even with "value"
20 year old SUV, 20 year old Motorcyle, 10 year old jet ski (am planning on selling the first 2 of those)
No accessible 401K (work will not allow cashing it out)
No cash value life insurance.

Essentially I have little to nothing beyond my States exemptions for bankruptcy/judgement (they are the same).

My state does not allow garnishment for civil debts to my understanding (please show me citation otherwise if you say it does)

So my understanding is I am basically "judgment proof" with the exception of what I save up from wages for settlement purposes.

Basically I plan on letting them know that I know what the options/consequences are of them getting a judgment. Protecting my money by pulling it out every week cash (my job refuses to do paper checks I must DD). And then dangling a settlement in front of them of 20-40%.

So they are left with 2 choices
1- Sue and they know they will get little to nothing now given my situation. Sit on their judgment for 10 years (max in my state, NON renewable) and hope my situation changes and they get paid. I dont see this happening as most CAs are about the quick buck I believe
2- Settle for the reasonable amount im offering and move on to easier targets.

What do you all think? Specifically about:

Ways to protect my money while Im saving? Cashing out every week? doing DD to a prepaid card? How are these things treated in judgments?

The plausiblity of them basically giving up and taking the "easy out" im giving them vs a long drawn out judgment enforcement when they know I know to claim my exemptions?

Sorry so long and convoluted but Ive been reading non stop this and several other boards on this subject and am ready to get my feet wet.

Thanks in advance all!! :)


How many credit cards are we talking? Most, not all credit card companies will settle for anywhere from 35-40% and your cards most of the time should be past due around 150 for maximum results. Some banks are offering savings if paid off and they are willing to take less. The only real problem I ever had was with Discover Card. They are cold and heartless.


lrhall41

Submitted by mbishoplaw on Wed, 04/21/2010 - 11:40

( Posts: | Credits: )


I would need to know which cards you have to give you an opinion. But, you are educated so you can easily do this. The toughest part is the wait. Out of 11 cards, I settled only Amex (at 75 days/35%) before 120 days late. Just count from 0-120 cause nothing is going to happen until then. I agree with the prior post that most will settle at 30-40%. In my case, $165k at avg 29% and 150 days. I am a tough negotiator, but mac123 is even tougher. Watch his posts for info. Good luck.


lrhall41

Submitted by dantheman on Wed, 04/21/2010 - 11:48

( Posts: 860 | Credits: )


Thanks for the quick replies. Some more requested info.

3 Credit cards (Cap1, BoA "Business", Wells) All fairly recent bal trnsfrs about 1-2 year old now on the transfers

1 BoA Installment loan (was MBNA pre merger). Very very very old debt just sitting there forever.

1 LoCredit Wells (Frmrly Wachovia) Also mostly very old. Around 5 years since balance first went to its present level.


lrhall41

Submitted by rown on Wed, 04/21/2010 - 12:01

( Posts: 70 | Credits: )


I would not recommend defaulting on your loans or taking your money out of your bank account to try and force settlements. Defaulting will cause your creditors to be less amiable about settlements. And defaulting means they will take you to court to collect what they are owed. You are right in saying that in SC they cannot garnish your wages, S.C. Code Ann. ? 15-39-410 (2009), except in certain circumstances, none of which seem to be present here.
However, if your creditors find out and tell the court that you have been purposely taking money out of your bank account to avoid paying them, the judge will not look favorably on your situation. And if you open another account with another bank/prepaid CC, then your creditors will still be able to find it. [FONT="][/FONT]


lrhall41

Submitted by OVLG Attorney on Wed, 04/21/2010 - 12:06

( Posts: 511 | Credits: )


@ OV...

Ok im now extremely confused. You say "Defaulting will cause your creditors to be less amiable about settlements." I am not aware of them being amiable at ALL about settling debts for less than full balance if you are NOT behind. I mean, why would they? You're paying them. They are happy with the status quo. Ive never. Ever. Once. Heard of them settling with a current customer. Someone please correct me if Im wrong.

You say "However, if your creditors find out and tell the court that you have been purposely taking money out of your bank account to avoid paying them, the judge will not look favorably on your situation". How can they tell what im taking the cash out for? Living expenses etc etc. Also I dont believe there is a penalty for you taking your own cash out of your own bank no matter what the reason. I could just not trust banks (and I dont incidentally after their treatment of me for the last 1.5yrs) and want to stock up my cash for the next big banking bust to come? Who knows why Im doing it...

Incidentally my states exemptions for someone not claiming a homestead exemption are 5000 in cash as well. A fact that they are sure not to take into acct when they sieze my bank acct and force me through the hoops of getting it back as exempt. In my view im just taking my exemption....proactively :P

Dont mean to come off angry but your post makes little to no sense to me based on what I believe happens re: judges, debt cases, judgment enforcement.

Please clarify when convenient. Thanks


lrhall41

Submitted by rown on Wed, 04/21/2010 - 12:56

( Posts: 70 | Credits: )


It is true that your creditors will have to prove to a court, if it comes to that, that you are purposely taking money out to avoid paying them what they are owed according to the contract you signed when you borrowed the money. The standard of proof differs according to your jurisdiction, but do you want to take the chance?
I have read several posts on this forum where people have been able to settle with their creditors without being behind on their payments and my firm gets settlements for people who aren't behind on their payments all the time.
The $5000 exemption in lieu of the homestead exemption only applies if you are currently in a suit for collection or bankruptcy. The court in a collections action will make your creditors take the law into account if they file, and you will not have to go through any hoops to get exempt property back. It is my understanding that the court makes an accounting of all of your assets and "removes" those assets the creditors cannot legally touch from their reach before giving a judgment.
But I admit I could be wrong about SC's court procedure. In order to be 100% sure you should consult a lawyer in SC.


lrhall41

Submitted by OVLG Attorney on Wed, 04/21/2010 - 13:19

( Posts: 511 | Credits: )


Way ahead of you. I had an appt with one about a month ago but all he wanted to talk about was BK. I had to DRAG him to my subject of choice. Sigh. All three attnys I have consulted with here just jump right on the BK bandwagon like its no big deal at all.

Ive made ANOTHER appt with him (this time I will have to pay him but I will be much more insistent we talk about MY subject of choice)

I will have to look into this concept you mention of settling while current. This is brand new to me on the other credit boards I regularly peruse (Creditboards, Creditnet, Creditinfocenter, Infinitecredit and this one) conventional wisdom I thought was that if current there was no settlement. You have to make them think you are defaulting and are going to (dissappear, Bankrupt, force them to sue you) In short there has to be some motivation for them to settle and someone paying current doesnt make sense.

Ive also chatted with more than one local magistrate (the likely judges in my future lawsuit) about the real worldconsequences of defaulting.

The summary of their answers were :if you own property they'll file a lien, if you dont own property theres really nothing they regularly do.

We shall see.

Keep em coming please. I crave someone tearing my ideas down so I can try and adapt them. So thanks in advance :P


lrhall41

Submitted by on Wed, 04/21/2010 - 14:43

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