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Debt Consolidation or Bankruptcy?

Date: Mon, 10/04/2010 - 22:10

Submitted by Stevo Devo
on Mon, 10/04/2010 - 22:10

Posts: 7 Credits: [Donate]

Total Replies: 12


I am an Australian that lived in the US for 10 years and while I was there I managed to rack up $30K in credit card debt through a series of bad luck events (medical expenses for cancer treatment, job loss, loss on sale of a house).

I moved back to Australia at the beginning of this year because I couldn't find work in the US and have been trying to get back on my feet. I have been thinking the best option for me is to just file bankruptcy in the US and have my credit card debt go away, but that was before I was considering returning to the US!

Now, I am thinking I'll probably want to come back to the US in the next few years and I'm keen to get my debt situation there resolved ASAP so I can start paying for my mistakes. I just ran my credit report and have a credit score of 591 with a Charge Off status on one of the credit card accounts.

I could try to negotiate the credit card debt down as I have access to some cash from my parents to pay off my debt, but only have $12K in cash and $30K in debt. I have no assets in the US, only this debt so I don't have a lot to lose at this point.

What is the best course of action? Should I just file bankruptcy or should I try to negotiate with the creditors? It's a lot of money and my credit is already wrecked!!

Any advice would be appreciated but please don't criticize my previous actions - I can't change what has happened, I can only make improvements from here.

Thanks


Hello Stevo,

It is of course impossible to give you specific advice without knowing more about your situation. But just going with my gut, if your credit is already wrecked and you want to have this situation resolved as quickly as possible, than BK may be the best option if you can qualify for a chapter 7.

The main question is, how much is it worth to you not to file BK? Also is that 12K the only liquid money you have? Meaning if you used all of it to settle these debts would that leave you with anything? That money could cause you some problems if you tried to file a Ch 7 if you qualified and the money is already in your accounts. If it is your parents money and they still have it, then you shouldn't have a problem. If you would rather pay 12 or 15K to avoid BK, then perhaps a settlement is the better approach. How far behind are you on these debts?


Sorry I can't be more specific, but as they say, the devil is in the details, and it is hard to provide advice without context.


lrhall41

Submitted by Damon on Tue, 10/05/2010 - 01:33

( Posts: 80 | Credits: )


Thanks for the reply Damon.

I stopped paying these credit cards in Feb this year, so about 7 months behind. I don't have the cash in my account but even if I did, it would be in my Australian bank account.

I do have a car and a ski boat in the US though (that I forgot about). The car is probably worth $4K and the boat $6K. So probably would be good see if I can work in out with the creditors.

Steve


lrhall41

Submitted by Stevo Devo on Tue, 10/05/2010 - 01:43

( Posts: 7 | Credits: )


Hello Steve,

You are welcome.

Well there are exemptions and certain amounts of personal property that debtors are allowed to keep. These levels vary by state, so it would be good to first consult with a BK attorney to learn how you would specifically be affected by a BK, and then you can make a more informed decision on the BK vs Debt Settlement question.


lrhall41

Submitted by Damon on Tue, 10/05/2010 - 01:53

( Posts: 80 | Credits: )


I am currently building a nationwide list of well recommended consumer advocate attorneys as a value added service for my clients. I do not currently have any recommendations for Oregon yet though. Tell me what city in Oregon and I can do some searching and let you know a few to check out.


lrhall41

Submitted by Damon on Tue, 10/05/2010 - 02:08

( Posts: 80 | Credits: )


Thanks for the advice. I called the first creditor (AMEX) and they said the lowest they typically settle is 58% - so I'll see if I can get the Visa one lower and then perhaps I might be all set and not have to file. I didn't realize I would have to be in the US to appear at a court hearing, so that's good info!


lrhall41

Submitted by Stevo Devo on Tue, 10/05/2010 - 16:26

( Posts: 7 | Credits: )