Need some advice

[rrockinggramma]

then make a list of the pro's and con's. Because you filed in 04, I think that some of the trustee's are "tougher" on refiler's but I have no proof of that. Just an observation of posts at this website and others.

In a chapter 13, not all creditors will file a claim (usually) but it is true that your life will be budgeted for several years. However I have found that learning to budget has been a good thing for me.

You need to analyze your situation completely. Will settling those accounts for less really put you in a better financial position? Can you afford your current lifestyle plus those payments?

Many will try all avenues before filing. For me, it was just such a relief to not have the phone ringing off the hook and knowing that no creditors could send me to collections and ding my credit report more than "included in bk" notation.

So weigh all your options carefully and do what you think is best. GL

[MJJ3767]

If I was in your situation (what am I talking about....i am!), I would file Chapter 13 now and convert to a Chapter 7 in 3 years. Either way, you are going to be "handcuffed" by filing Chapter 13 or by working more hours to pay off the debt you already have. You said the company that is sueing you is "willing to work with you" but you don't know how much they are willing to work. In my state they can garnish 25% of your paycheck. My guess is the company is going to want at least that much each month because they know they can get it with a garnishment. If you think Chapter 13 is being "handcuffed", imagine a garnishment.

[junjun]

If I was in your situation (what am I talking about....i am!), I would file Chapter 13 now and convert to a Chapter 7 in 3 years. Either way, you are going to be "handcuffed" by filing Chapter 13 or by working more hours to pay off the debt you already have. You said the company that is sueing you is "willing to work with you" but you don't know how much they are willing to work. In my state they can garnish 25% of your paycheck. My guess is the company is going to want at least that much each month because they know they can get it with a garnishment. If you think Chapter 13 is being "handcuffed", imagine a garnishment.

You can convert to a Chapter 7 once you're in a Chapter 13?

[HHM]

RockingG makes some good points, let me try to bottom line this thread here.

There are pros and cons and tradeoffs for each possible solution, Bankruptcy and Debt Settlement.

A few things you need to know
1. Generally, when your account gets in the hands of these junk debt buyers, getting BOTH a reduction in principal and a payment plan are out the window. These players are looking for quick money. Thus, generally, you must be prepared to make a lump sum payment or a several large payments over no more than 6 months. So, your plan to try to negotiate to reduce the balance owed and pay it off over a long period is essentially a non-starter
2. If any entity forgives a portion of debt of $600 or more, they are required to issue a 1099-C and the taxpayer (you) is required to declare that portion (the forgiven debt) as income for tax purposes, there are some exceptions to paying the income tax (see IRS Form 982).
3. RockingG makes a good point, will settlement solve your underlying financial problems with any degree of certainty. Do you really have the resources to settle (i.e. lump sums).

As for chapter 13, yes its a payment plan, it is a 5 year payment plan (sometimes 3), BUT, it puts YOU in control. Also, you always have options in a 13 if things change. If your income goes down, guess what, you can amend your plan and reduce your payment, if your income goes down enough, you can covert you case to a chapter 7 (note, in your particular circumstances, you could only convert 8 years after the date of your previous chapter 7 discharge).

Bottom line, if your plan to settle with these guys was to try to get into some extended payment plan, the ONLY option you have is a chapter 13.