Settle or BK? WWYD?

I think debt settlement will be the good option for you. Bankruptcy hurts your credit score. You may again try to convince your creditors/lenders to settle your debts. But it fully depends on their discretion whether or not to agree for settlement. You may also get help from a debt relief company.

Take your $2k and use it to file bankrutpcy. Bother Citi and Prosper are agressive in their collections. Clear your slate.

Thanks SoapLady,

Was planning on that route all along, but wanted to try to avoid it if I could. Unfortunately, it will screw up any chance of buying a home for the next ten years, but I got to do what I gotta do.

Thanks for the advice!

Not true. You can purchase a home usually 2 years after bankrutpcy.

Really? Wow, why did I think ten years?

Ugh, I want this over with.

The bankruptcy will stay on your credit report for 10 years, but you're usually safe to purchase a home or vehicle within 2ish years, as Soap stated.

Well that makes it a little better knowing that I still have a shot. I am 29 and the thought of not even having a shot of owning a home til 39-40 was depressing.

What?? Why would you want to declare bankruptcy when you can work yourself out of this debt by settling the accounts on your own, without having a court tell you when you can use the bathroom for the next 3 years?

This is a Debt Settlement forum and those of us who have utilized it to assist in our personal situations know this is the best solution.

Don't declare bankruptcy, settle. Read my story.

Curious on what you mean by the court telling me everything...I know in regards to credit but what else?

What would the benefit of settling be to me instead of BK if my credit is already down the tubes and will be either way?

So, we settle these accounts, not to mention one wants a 3000 lump sum and multiple predatory lending places. Say it takes three years to get myself out of debt, credit score still shot and already paid 20,000 as opposed to being able to establish credit around the same time, 20,000 saved and 7 years later, record clean again.

Just asking, so i can get another angle to the story.

Dan,

I respect your opinion but have to disagree.

The OP has only $2000 and well over $30K to settle. The OP also hasn't made a payment for quite some time.

I believe BK is the way to go before lawsuits are filed, especially if he/she wants to be able to purchase a home any time in the next few years.

I'm with dantheman. The amounts are not large enough to justify the nuclear and prolonged damage of bankruptcy. IF you file BK now, what if you end up having real debt later on? You will not be able to re-file for BK for a long time. You haven't said how long the cards haven been past due. While some lenders are more aggressive, many will not be quick to sue for these amounts, and even if you end up having a couple of them sue you in two years from now, you may try to settle with them and you may even have more money to settle with. A lot of lenders who refuse 60% settlement at the beginning of the road, end up grabbing 25% offers later on.

I'm sorry but I'm confused.

The poster clearly indicated that he is nearly 1 year past due with Citi and over a year past due with the others.

He also clearly indicated that he has between $35-$40K of credit card debt and only $2000 on hand to work with. If this isn't "real debt," I'm not sure what is.

The primary accounts listed are all in excess of $7K and, I assure you, the lenders WILL sue.

I think it's pretty clear that BK is the way to go here.

Quote:

To suggest that all lenders sue for any debt over $7K is ridiculous. Find me a single case where, say, USAA sued anybody for any unsecured CC debt under $10K. Like I said, he may end up with only a couple suits or he may end up with no suits. Many consumers have successfully disputed off collection accounts long before the 7-year reporting period. Very few have been able to dispute off a bankruptcy notation from their credit report before the (usually) 10-year reporting period for BK. Then what happens if he later incurs real debt (6 figures, or more) in 3 years from now? He would be out of options because he cannot refile BK for a while at a time when civil lawsuits would be almost a certainty if his debt becomes 6 figures. Obviously there's a grain of truth in all solutions offered here, and the OP needs to pick his own, but to discredit any option less drastic than BK does a disservice to the OP.

As for putting DMPs and settlements in the same category, I disagree with that. DMPs would indeed be a waste of money for most consumers. Settlements, OTOH, are a very viable option, particularly with a consumer who's willing to learn how to DIY.

I wasn't suggesting that all lenders who are owed > $7k will sue. I am specifically referring to this OP's post. Two thirds of this poster's debt is owed to BofA and Citi. Both of these lenders sue. The accounts are already 1 year (or more) past due. the OP only has $2k to work with. These accounts aren't going to be settled for $2k and a DMP is a waste of time and money at this point.

The problem I see is that, even if the OP could settle one of the larger account (BofA for instance) for the $2k, he'll then have $0 and still have over $20k of debt and no way to pay it.

Also, I don't see where Soap stated that DMPs and settlements should be lumped into the same category. Her point is that you still risk being sued if you choose either of those options and that they are both riskier. That's hardly saying they're the same.

You seem to be making a lot of assumptions. I think you should fully read the posts and work through the logic (or lack thereof in some cases) of the answers given by the experts on this board.

More often than not, I suggest settling debts on your own. In this particular instance, I believe bankruptcy is the best solution.

That's my opinion, FWIW.

OP States: "I say I would have to get it to around 10,000 or under to even bother with settling."

That is 33% and I settled hundreds of thousands in the 20's.

Just mho... It is empowering to settle and it is humbling to hand it to the court to fix.

To the poster who asked what I meant about the court watching over you:

An associate of mine did bk. When he tried to buy a car a couple of years later, he had to run it by a lawyer and the court and in the end he bought a beater car because if he had the money for a car the court had the right to it. OR at bare minimum, the purchase money was suspect and he did not want the possibility of bk fraud. BK is a bad way to go unless there truly is NO other option. Again, jmho. dtm

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Settling BofA for pennies on the Dollar is easy. I settled for 15% and my balance was much, much higher than OP's. I also settled with Citi for 15%, but I admit it was not easy as Citi rarely goes below 35%. OTOH, Citi will sometimes agree to 12 payments of the settled amount. So yes, I do make assumptions, just like filing BK requires assumptions, such as, that he wouldn't have a few more grands to settle with in the next 2-3 years. Yes, it would have been better if he had $2600 more to settle with right now, but you do not file BK for being $2600 short -- the BK proceeding itself can easily cost that much, preempt any future BK option for years if things get worse (which they can), and placed on his report for 10 years.

I think it's good that we're having this discussion (even if we disagree on the preferred method) so that no matter what OP decides, they would be much more informed about the costs and benefits of whatever course of action they choose. All too often people choose one way or another without fully knowing and understanding neither the alternatives nor the ramifications.

Hi, I am a Paralegal. [COLOR="Blue"][Personal info removed per Terms of Service ~OG1][/COLOR] We deal with collection agencies/ collection attorneys/ creditors etc. on a daily basis. We are not a settlement company or a debt management company or a debt consolidation company.

The best way to resolve these accounts on your credit is to settle them out. However every creditor has different guidelines. some are easier to deal with others. Example:

Discover is the worst to deal with. Dealing with discover bank in collections is like putting a mentos in a coke bottle. We have working relationships with many many different collection agencies/ collection attorneys. Usually the creditors will offer you what is known as a blanket settlement. The goal is to get what is called a below blanket settlement. the below blanket depends on each creditors guidelines and what they are able to take to their clients "aka" the original creditor, if it is with an attorney or a collection agency.

For example if you ask a 1 to take an offer of10- 15% to their client they will take it as an insult and flat out decline to even entertain the offer. You need to provide what is known as a good hardship. Key trigger words in a good hardship letter will get the creditor to consider a below blanket offer. You can also work out term settlements with some creditors and lump sums with others. Most creditors go off of what is known as an aggregate. This represents a certain percentage / average that the collection agency/attorney collects for the month. needless to say this number changes quite a bit.

The creditors that are the best to work with are the following:
BOA- very flexible and open to below blanket arrangements both lump sum and term

Citibank- Not the best when it comes to percentage but extremely flexible on terms.

Chase- hit or miss..... depending on the situation and status of the account it may be possible to get an extremely decent below blanket settlement.
If you need any advice or help please feel free to contact me. Good Luck!

friedman...

How bout sharing some of those "trigger words". Any special words for Capital One?