alternative to ch 7 bk

[fljb]

Has this ever worked for anyone .... instead of filing a ch 7 or 13 just wait to get offers from various CC's and pay them off? would this ever be advisable ? what kind of deals do they make for a payoff (or do they?)

I have some potential income that I could use to do this .. it will never be enough to pay them all off in full - and this income is not guanenteed AT ALL - just a hunch I may be able to get by selling an asset.

filing bk is looking less and less like an option because of my husbands business ... he can't risk it right now - loosing it - even though all our debt is personal and unsecured CC's from what i am reading our business (S-corp in FL) is at risk under BK rules.

any advise??? thanks!!

just trying to see all my options!!

[StartingOver08]

Yes that works. You can negotiate lump sum payouts with each of the creditors for much less than the current balance. If you don't have lump sum you can get in touch with the hardship dept of each cc (NOT the CSR's - you must work directly with the hardship dept). You can jam down the rate to 2%, close the account and make payments over 60 months for long term hardship plans. If you do that timely enough you will not even show a 30 day late! I negotiated a Chase CC and also BOA CL that way. Got excellent payments for substantially less than what I was paying. Then had a severe drop in business that I have never had in over 30 years (I am a real estate agent) so I ended up BK 7 - but try to not file if you can.

The reason you don't negotiate with the CSR's is because they do not have the authority to do the hardship program - but instead of telling you that, they tell you no. Took me many calls to actually get through to the hardship dept because the CSR's kept saying there was no such thing!

[fljb]

Thank you! so if I do this negotiating with the hardship ppl - they could lower my payments - can they offer me a lump sum pay off? do they ever lower the balance owed? or just lower the interest? Not sure this will work for me but good to know my options ... and this in no way disqualifies a person from filing later ... based on what happened to you - right? Man this is so stressful!! but gathering good info here!! thanks!!

[laurannm]

Be VERY careful with lump sum payouts. Any amount you are "forgiven" on becomes income that you must pay taxes on come tax season (the CC company will send you a 1099)

[HHM]

Yes that works. You can negotiate lump sum payouts with each of the creditors for much less than the current balance. If you don't have lump sum you can get in touch with the hardship dept of each cc (NOT the CSR's - you must work directly with the hardship dept). You can jam down the rate to 2%, close the account and make payments over 60 months for long term hardship plans. If you do that timely enough you will not even show a 30 day late! I negotiated a Chase CC and also BOA CL that way. Got excellent payments for substantially less than what I was paying. Then had a severe drop in business that I have never had in over 30 years (I am a real estate agent) so I ended up BK 7 - but try to not file if you can.

The reason you don't negotiate with the CSR's is because they do not have the authority to do the hardship program - but instead of telling you that, they tell you no. Took me many calls to actually get through to the hardship dept because the CSR's kept saying there was no such thing!

That is a bit optimistic, but it is possible. You will almost never get a lump sum offer from the creditor directly and not until you default on your payments. What startingover is talking about is when the CC companies rewrite your CC to a personal loan. Basically, they close your credit card, reduce the existing balance to a personal loan and can sometimes give you better interest rates.

Trying to do a lump sums almost always requires going into default on your payments...i.e. trashing your credit, waiting for the original creditor to charge off the balance and then making a deal with whatever collection agency or debt buyer ends up with you account.

Basically, these tactics are NOT a way to "avoid" BK, they are used when a person CAN'T file BK for whatever reason (i.e. filed BK within the last 8 years).

You need to go make consults with experienced BK attorney's that can handle the business issues. It appears that you and your husband are in the "looking for any excuse not too" stage of filing BK, which typically leads to bad decision making.