debt reduction versus bankruptcy
Date: Wed, 06/02/2010 - 13:28
I have begun to rethink the BK in favor of debt reduction.....our accounts are all 4 months late....we have started to call the creditors and for the most part, they have given quotes for significant reductions on our accounts (as much as 75%). All of our accounts are with major banks....we have no other debt....no car loans or smaller Credit cards with balances.
I may be able to borrow some money from my mother to pay most of the reduced debt in a lump sum.
My concerns are: how much better is the debt reduction than Bankruptcy for our credt. Most of the credit card companies are saying they would close our accounts and mark them as "settled." Do we need an attorney to help us ....we seem to be negotiating fairly well on our own. Do we have to be concerned about the credit card companies coming back at us later or not clearing the debt from our credit report if they sign a contract?
Are there any pitfalls to doing debt reduction on your own with major credit card companies? I am just frightened but also frightened about losing my home and my cars.
thank you for any help or suggestions....thanks you again
Debt reduction is always better than Bankruptcy on your credit s
Debt reduction is always better than Bankruptcy on your credit score. If you feel you're doing fine settling your debts on your own and don't need a lawyer to help you, then don't get one (g)! The best thing to do to stop the credit card companies from going back on their deals is to get everything in writing and have it signed by both parties. Also make sure you get an acknowledgment from the creditors that you've paid them in full, again in writing.
You won't lose your home or your cars as long as you can get the creditors to settle. In bankruptcy, if you still have loans out on your home and cars all you have to do is reaffirm the loans and they won't be included in your bankruptcy estate. Something your bankruptcy lawyer should have told you when talked to him, along with the option of filing for Chapter 13.
thanks OVLG! I am worried about losing my home because I have eq
thanks OVLG!
I am worried about losing my home because I have equity...not because I am behind on payments. The attorney I am working with is going to homestead our house, but the equity has recently gone up and I am fearful of this. I do not have any car payments either...that is the problem ... I may be viewed as having too many assets. I would rather settle than go Chapter 13 because it is better than BK as you stated above.
Another issue is that I do not want to give them my bank account # and routing # to pay them. Any other suggestions for payment of settled credit card debt?
thank you for your response!
Checks and money orders are best. It's a good idea not to give
Checks and money orders are best. It's a good idea not to give out personal information.
You only risk losing assets in Chapter 7 bankruptcy, Chapter 13 is essential a court ordered (and monitored) debt repayment plan.
Like I said, if you have loans out on your house and car, and you end up having to file for Chapter 7, just affirm the loans (it means they aren't wiped out) and keep paying. You don't have to be late on your payments to do this. And it's fabulous that you've been able to make the mortgage with those huge debts!
If I give them a personal check won't that give them personal in
If I give them a personal check won't that give them personal info and my checking account # and routing #.....??? Any suggestions please? Set up a new account just for payments? thanks
[QUOTE=debtor in CA;706326]If I give them a personal check won't
[QUOTE=debtor in CA;706326]If I give them a personal check won't that give them personal info and my checking account # and routing #.....??? Any suggestions please? Set up a new account just for payments? thanks[/QUOTE]
Yes, you can always set up separate account and use only for settlements. Put in only funds needed to make payments.
[FONT=Calibri][COLOR=black]Some I have called (BofA) have said t
[FONT=Calibri][COLOR=black]Some I have called (BofA) have said they will NOT accept a cashier's check. I do not understand why.... Also some (BofA) insist I provide them with a routing # and account# of my checking account BEFORE they send any proposed agreement in writing by mail or fax. They said they need this info so they can submit for approval by their superiors (who they will not let me talk to) a proposed payment plan (3 payments within 90 days). I told them I don't have a checking account and one said 'well use your friend's account or family member's account'. I will not and should not provide any info like that. HOW do I get around this "procedure" .. i.e. how do I get something in writing before providng an account# so payments can be made? [/COLOR]
[COLOR=black] Thank You![/COLOR]
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