File or settle

[Blackgoose]

My dad has been vocal about trying to avoid a bk at all cost. If I hold out long enough and can settle the debts around .20 on the dollar is there an advantage to do that over a bk?

[ValleYum]

Settlements also show as a negative mark on your credit report.

You may have to pay federal tax on the amount that is 'written off'.

[HHM]

Pretty much ALL the advantages favor BK. I am hard pressed to think of a scenario where settlement makes sense.

The only time settlement makes sense is if somehow bankruptcy would end up costing you more money.

Also, depending on your circumstances, .20 on ALL your debts is fairly unrealistic.

Also, if you file BK now, you immediately begin credit recovery, if you wait to settle, your credit report gets trashed, and depending how long it takes to settle, that much longer to rebuild.

As I said, there is absolutely NO ADVANTAGE to DS over BK.

[Blackgoose]

Very good advice. Thank you!

[btbeme]

My dad has been vocal about trying to avoid a bk at all cost.

Then maybe he shouldn't ever file BK.

Sorry to be flip about this, but there is (and will always be) a segment of society that feels that BK is morally wrong. Hard to change that, and I would not try. But I'd make sure that I didn't have to do it again if it were caused by my own actions. This is a process known as "learning from your mistakes" and parents everywhere always preached it to us growing up.

[btbeme]

If I hold out long enough and can settle the debts around .20 on the dollar is there an advantage to do that over a bk?

In addition to the good advice already posted... Settling pretty much requires ALL of your creditors to play ball. If only one holds out and files suit, where would that land you? If your pay were suddenly garnished, would the other creditors be pleased that you couldn't make the payments you agreed? Would they be amused and satisfied with one creditor (not them) getting paid in full via garnishment while they settle for 20 cents on the dollar?

Or would they pile on?

[karm43]

Sorry, but whatever company your dealing with are liars. Its more like 70 cent after said and done oh and don't forget the tax liability. I did alot of research on this topic. Truth is they want your money.