Settlement offer: 15% of 75,000 with B of A?

[tyfoon]

I have 67k with BOFA and am teetering on settlement or BK7. The problem is i'm well over the median but will probably means test out. Is yours amount spread out on different accounts or 1 card? Mine is divided among 5 cards. I owe discover 7k and told them I wasn't going to be paying for months, one quiet week so far. I am approaching 60 days on Discover, citi, and 90 on some Bofa. Did you approach them about the settlement? Did you consult with Nova Debt? Sorry for all the questions but like you if I can get them off my back I can probably come out as well as in a 13. Since I might get forced into one anyway I'd rather settle if possible. Please keep me posted. Thanks.

I have 4 BofA cards with combined balance of $75k. They approached me about the settlement. Started out at 20% but "settled" for 15%. Did not consult with Nova Debt or any other service.

[paulf8]

If your filing bankrupcy dont even think about paying enybody.Its totally lost money whoever you try to pay .It wont matter at all in chapter 7 or 13

[Cheeseater]

I have 67k with BOFA and am teetering on settlement or BK7. The problem is i'm well over the median but will probably means test out. Is yours amount spread out on different accounts or 1 card? Mine is divided among 5 cards. I owe discover 7k and told them I wasn't going to be paying for months, one quiet week so far. I am approaching 60 days on Discover, citi, and 90 on some Bofa. Did you approach them about the settlement? Did you consult with Nova Debt? Sorry for all the questions but like you if I can get them off my back I can probably come out as well as in a 13. Since I might get forced into one anyway I'd rather settle if possible. Please keep me posted. Thanks.

[tyfoon]

Have you had any luck negotiating with Discover? I have heard they are tough to deal with. My two cents is jump on the BOA 15% deal,Especially if you can't file ch 7. that is the biggest chunk of your outstanding debt.

What I have read on the net is that 120 is the magical number of days and your debt is due to be sold off to a JDB real soon. The original creditor is the easiest to deal with. The JDB usually pull all sorts of crap and as the above person said, are notorious for selling your account even after you have settled it. Everything I have read is that the original (BOA) doesn;t do that. hear is a good site that has helped me. I hope it helps you.

http://www.creditinfocenter.com/debt/settle_debts.shtml.

Only thing i got with Discover is that for a year they will reduce monthly payment to $80 a month (from the $160 I was paying). Must come direct from your bank account. I went with it to stop some of the calls. I made that agreement with them a couple of months ago. They were very persistent. Called me at home and office.

Kohl's collectors were friendly. Almost made me want to pay them . Agreed on $44 a month for my $3000 balance. No calls since.

I will look into site and may call GM and Sears to see if they will make me a offer. But I do not want to also owe taxes on the difference.

Not sure when companies turn over to outside agencies. I company I work for turns them over at 180-210 days without any payment. Really think one could go along time before a account is turned over to a outside agency if he/she occasionally pays something on the account.

thanks

[tyfoon]

Thanks for your comments. I am going to look into the 1099c tax issue. I know that one has to fill out form 982 to claim insolvency and pay little or no tax on the settlement. Maybe i will redo my 2008 tax return assuming that i took the settlement and see if i would have owed anything on it.

Regarding BofA selling forgiven debt. That sounds crazy. In my case I have a signed settlement offer in my hands. I have no idea how they could get away with selling the remaining debt. I might ask them if that is even a remote possibility or to indicate that they would not do so in the written offer. Have to do more research on that.

I know that it will be real tough to get the rest of the creditors to settle. A couple of days ago I asked Chase ($4k balance) for a 15% settlement and they said absolutely not and pretty much hung up on me. Have had little or no contact with Sears and GM card collectors. They must be too busy working on other customers accounts to care about my "small" $12-$13k balances.

Most likely will eventually end up filing ch13. But, like everyone else, I am looking for the option that makes sense to me. At this stage I really do not want my employer to find out about my financial condition. Bankruptcy would require part of my salary to go to the courts which obviously requires our payroll/personnel staff to be informed.

[Brighterdays]

Have you had any luck negotiating with Discover? I have heard they are tough to deal with. My two cents is jump on the BOA 15% deal,Especially if you can't file ch 7. that is the biggest chunk of your outstanding debt.

What I have read on the net is that 120 is the magical number of days and your debt is due to be sold off to a JDB real soon. The original creditor is the easiest to deal with. The JDB usually pull all sorts of crap and as the above person said, are notorious for selling your account even after you have settled it. Everything I have read is that the original (BOA) doesn;t do that. hear is a good site that has helped me. I hope it helps you.

http://www.creditinfocenter.com/debt/settle_debts.shtml.

[optimistic1]

Be aware that JDB's might buy up the forgiven debt from BofA and still hound you for the balances, what HHM calls "the dirty secret of debt settlement". I would utilize your bk rights and be done with it.

[walkthaplank]

If you can't get them all to settle with you, you'll probably still end up filing BK. Think of the 13 as an enforced settlement offer that is interest free without the tax issue.

I'm not sure negative net worth is the same as insolvency. If you make too much money to file a CH7 more than likely you will be paying taxes on that added $64k in income next year.... you won't have that car to sell to pay it and you won't be able to BK on it.

IF you can get all of your creditors to settle and IF you can afford the additional income taxes and IF your creditors don't send the deficiancy amounts to collection agencies (some have been known to do that*) you might be able to avoid BK. Those are some giant "IF's".


*I don't know how or why that would be legal, either they accepted the settlement as payment in full or they didn't.

[tyfoon]

Bank of American has offered to settle four of my accounts having a total balance of $75,000 for 15% or $11,250. Been 120+ days since I paid anything on those accounts. Payable 1/3 a month for three months. Going to be tough to come up with the cash, may have to sell one of my three cars (i have four of them).

Other unsecured obligations total about $40k and include sears $12k, discover $7k, kohls $2k, chase $4k and GM cards $13k. Have paid very small payment to kohls and discover so I am not as behind. So far I get a few calls but not many from the creditors.

Upside down on my home mortgage (owe $130k, worth $100k) and the one car that I still owe on (owe $12k worth $10K).

Lawyers say I would have to file chapter 13. Chapter 7 is out of the question. Make too much $ and have too many cars. Probably would have to pay $700 a month to the unsecured creditors if I went chapter 13. Over five years would be $42,000.

Regarding possible settlement (if i can manage to come up with the $11250 to begin with), I know there is a 1099c issue. But I thought since my net worth is negative, there would be no tax due?

The BofA settlement sounds good to me. Eliminates 65% of my unsecured debt quickly. But, since the other card companies may still come after me for the remaining $40k, I am not sure if it is a good idea.

I am looking for comments and suggestions.


Thanks