BK vs Charge Off

[HHM]

Probably missed this point, but why can't you file for another 8 months?

[OhioFiler]

Settle- No payments. ie settled. Cost: $22,500 (owe $70k)...life goes on starting in June of this year.

BK- Save $20,000 ($2,500 to file). Can't file for 8 months (Jan 09) assume in that time frame we won't get sued, garnishment or rejected.

So how much do you value your time and piece of mind is the question? We do a lot...hence the thread...

I don't value the unknow of suits, garnishments or rejection at $20,000 for 8 months. I think you'll be surprised how long it takes to get those actions taken against you. I wouldn't value them at more than $50.

[BKINAZ]

I must be missing something - IF you settle and still have payments, you have an extra $3500 but if you file BK AND DO AWAY with the debt and make NO payments you don't have any monies left? -jb

Settle- No payments. ie settled. Cost: $22,500 (owe $70k)...life goes on starting in June of this year.

BK- Save $20,000 ($2,500 to file). Can't file for 8 months (Jan 09) assume in that time frame we won't get sued, garnishment or rejected.

So how much do you value your time and piece of mind is the question? We do a lot...hence the thread...

[jeb]

It's tough for me to argue with her that IF we get a loan mod (know in 30 days), deed in lieu our land obligation (30 days also) which both look good...settle our CC's....we'll be over $3,500 ahead per month and we can make it work. BK gives us no more per month.

I must be missing something - IF you settle and still have payments, you have an extra $3500 but if you file BK AND DO AWAY with the debt and make NO payments you don't have any monies left? -jb

[BKINAZ]

See that's what I am talking about...it's the worst, to it's not the worst. BTW TEW/CHAD I would be going for insolvency for the 1099...so they don't come into play.

HHM "Why spend $25,000 to settle $60,000 worth of debt when you can pay $2,500, file chapter 7 and not pay anything back."

Actually $70k (just to be correct) and I guess that's the question. If BK is 7-10 yrs and settlement is 5 yrs (or whatever) is it worth the $22k+ not to do BK? Personally I am for BK, my wife is for settling and moving on. It's tough for me to argue with her that IF we get a loan mod (know in 30 days), deed in lieu our land obligation (30 days also) which both look good...settle our CC's....we'll be over $3,500 ahead per month and we can make it work. BK gives us no more per month. Yes I now a lot of IF's...but as I have said, we won't settle until we know about the mod & Deed...if both go south...the wife is on board with BK.

SO...again...HHM...you say BK is the best option, why is debt settlement the last option...how long to fix the credit with settlement? Yes...I know moving forward the credit is fixed starting right away for both.

HHM "Also, if you are going to base your course of action on how it is going to effect your credit, then your priorities are totally out of whack."

I never said that...you did. Our options...settle now, move on with our lives vs not being able to file until January 1 going through all the phone calls and threats. Then I wondered out loud...if settlement gets us out of the woods (credit rating) YEARS earlier than BK then that's a bonus. Does it? That's the question...

Thanks.

[HHM]

Totally DISAGREE with others, BK IS NOT THE WORST mark on your credit. The length of time something is reported on your credit report has absolutely no correlation to how it negatively effects your credit.

Also, if you are going to base your course of action on how it is going to effect your credit, then your priorities are totally out of whack. Why spend $25,000 to settle $60,000 worth of debt when you can pay $2,500, file chapter 7 and not pay anything back.

Debt settlement is actually the worst because of the cummunlative effects of the things that happen to get to the point to get a good settlment. Typically, to get good settlemnts, you need to allow the accounts to go into default, charge off, go into collections, and then finally get the "debt settled" mark. All that is far more devastating than a BK. A BK is a one time event on your credit score. For those that have bad credit going into BK, BK actually improves their credit (because it zero's out the debt to balance ratio).

IMHO, debt settlement is the true last resort, not BK. The order or debt resolutions is this

1. Self-help budget, low interest balance transfers, and hardship payment plans from CC's
2. Consumer Credit Counseling
3. Bankruptcy
4. Debt Settlement.

[chad9162]

Yeah agree with TEW, BK is 10 years on Credit Report and you pay nothing. Chapter 13 and everything else is 7 years, I believe. As far as credit goes, I think its the same....time heals all. One or two years and you'll be able to establish credit again with any of the above. Some here get credit right after they discharge so it's really up to creditors. I also think its based on your Income to Debt ratio. If the creditors thinks they can make money off you and you have the ability to pay (low income to debt ratio) they'll give to credit.

I had slow pay a few years back....my salary tripled and the credit offers came rolling in....

[TEW]

Bk is the worse mark you can have on your credit report.
Charge offs doesn't mean the debit is gone it means that the creditor handed it off or will be handing it off to a collections company.
settlements as far as i can tell are not real. If you do get the creditor to settle by law they have to send you a 1099 and you get to pay the tax on the difference plus if you use a settlement company you end up paying them so where is the gain.

[BKINAZ]

In advance sorry if this doesn't make sense...

I know there are A LOT of people in here that are proponents of filing BK vs negotiation or settlement with creditors. Does anyone have any idea which kills you more, longer and what order do they fall in...BK, Charge off, forclosure, negotiation...settlement
...written how on your credit report?

I'm told Charge offs and forclosures are worse than BK...no, yes?

Place in order...Deed in lieu / forclosure / BK / Charge off / Settlement / Short Sale / Walk away from house.

WORSE FOR CREDIT REPORT: TOP FOUR
1. Sicks around how many years on your CR?
2. Same...
3. Same...
4. Same