Bankruptcy vs DebtMgmt vs "Settlement" ?

[150mph]

Another question.... (whoops inadvertantly hit Return)

...Was wondering what you all thought, given my circumstances, or if you've tried this...

What if, in a last ditch effort to save me from filing for BK, I wrote to Chase (25k owed, instigator of my current situation) AGAIN, and said something to effect of - "Look, I'm going to file for Bankruptcy and then you won't get ANYTHING... I'm offering to go back to the $500/mo payment I was making before you doubled it. Will you take another look at my acct, properly maintained for 10 years and give me a break here?"

Or do you think they'll assume I'm threatening them and just blow me off like before? The 10 year customer line didn't help on my previous letter and I did say this on the phone to a low-level supervisor, who was sympathetic but only gave me the CCC 800#. But I didn't think I would really have to file then and now I know I will.

Just a thought....

[ConnieS]

Just my two cents............I fell for one of those "debt Settlement" scams............all I can say is run very fast and don't look back. The credit counselour that was working with me was the one who advised me to file for bk! They bilked me out of thousands and did NOTHING for me!

[HHM]

...Was wondering what you all thought, given my circumstances, or if you've tried this...

What if, in a last ditch effort to save me from filing for BK, I wrote to Chase (25k owed, instigator of my current situation) AGAIN, and said something to effect of - "Look, I'm going to file for Bankruptcy and then you won't get ANYTHING... I'm offering to go back to the $500/mo payment I was making before you doubled it. Will you take another look at my acct, properly maintained for 10 years and give me a break here?"

Or do you think they'll assume I'm threatening them and just blow me off like before? The 10 year customer line didn't help on my previous letter and I did say this on the phone to a low-level supervisor, who was sympathetic but only gave me the CCC 800#. But I didn't think I would really have to file then and now I know I will.

Just a thought....

From much experience, it probably won't work. From their perspective, you are just a very very small fish in a super large ocean. You have no idea what factors go into their decision regarding troubled debt. For example, you said you owed $25K, they could sell that debt TODAY to a secondary debt buyer for $18,750 and not blink an eye. After all, they have probably already made a profit in interest, so they don't really lose any money by selling it at a partial discount, so your offer to pay $500 per month is worthless to them, even if they stopped all interest from accumulating, it would take you over 4 years to pay that back. Unfortunately, there is NOTHING you bring to the table to motivate any movement on their part. I don't mean to sound pessimistic, but you need to know what your up against.

Just to give you some idea of how insignificant you are to them, JP Morgan Chase & Co. (the parent co for Chase Manhattan) did over $25 Billion dollars in Revenue for the 2nd quarter of 2006 (that is just 3 months worth of revenue)

[tresjolie]

I tried that myself - basically when the minimum payments went up I was pushed over the edge and could no longer "juggle" my credit card payments. So, I called CITI and MBNA....noted to them the very thing you are suggesting and CITI reduced my interest rate but MBNA just referred me to a debt management program, which anyone I've known to use one ended up much worse off because they would be late with a payment and then you were back to square one again. I decided my credit is bad already and I just cannot get more $ out of what I have to pay off the debt. BK is a legal option...as noted, probably the least costly....cleaner....yes, a bad mark, but guess what...I can't get credit now unless it gouges me terribly. At least I can move forward after filing - even with a BK against me. Unfortunately divorce and job loss and some poor decisions on my part have occurred but life goes on and my worth is not based on those past events. Good luck and I hope to be filing soon----taking some time to even get the $ to file but getting there!! :-)

[CAB_44]

From much experience, it probably won't work. From their perspective, you are just a very very small fish in a super large ocean. You have no idea what factors go into their decision regarding troubled debt. For example, you said you owed $25K, they could sell that debt TODAY to a secondary debt buyer for $18,750 and not blink an eye. After all, they have probably already made a profit in interest, so they don't really lose any money by selling it at a partial discount, so your offer to pay $500 per month is worthless to them, even if they stopped all interest from accumulating, it would take you over 4 years to pay that back. Unfortunately, there is NOTHING you bring to the table to motivate any movement on their part. I don't mean to sound pessimistic, but you need to know what your up against.

Just to give you some idea of how insignificant you are to them, JP Morgan Chase & Co. (the parent co for Chase Manhattan) did over $25 Billion dollars in Revenue for the 2nd quarter of 2006 (that is just 3 months worth of revenue)

Wow HHM~ this is gut wrenching....the statistics....
I can only say~ all of the money that I have tried to pay back over the years, and it took me this long to realize just how much money I have thrown away~ because I was never going to be able to pay them back....ever.
I truly wish I had done this years ago...when I was only 45K in debt~
One good thing this has taught me...it has taken this painful realization to force me to look at money and how I spend it and what it means to me.
I don't ever want to be in this mess again...ever~

[ekelly4200]

ekelly,

I think you misunderstood what I meant (or maybe I wasn't clear enough, which is probably the case).

What I meant is, if your credit balance is $20,000, that represents an accumulation of charges and "INTEREST". So what happens is, when you enter a legitimate debt management program, they freeze your balance at what ever it is when you join the program...and reduce your interest from that day forward. In essence, they can't reduce "already accumulated" interest, but they can reduce the interest going forward. So, when our friend here enters a debt management program, he will still have to pay off the $48,000 he owes, but over the course of the payment plan he enters with the debt management program, he will hopefully pay less, or not interest during that time. I just wanted to warn him/her that a debt management program will NOT reduce the balance owed at the time he enters the program.

Which is the exactly what you said. So we are saying the exact same thing.

yes
I misunderstood what you were getting at. I did the DMP for 4 months before deciding BK. what a waste of time. Sure they reduced my interest rates but the min due under the DMP were only marginally less than I was paying before...I was still in the negative every month. And when I started and went through the whole debt workup I did ask about BK and was told "nah, its not that bad (my debt)" Well since I easily qualify for ch7 I would say it is bad.

[ekelly4200]

...Was wondering what you all thought, given my circumstances, or if you've tried this...

What if, in a last ditch effort to save me from filing for BK, I wrote to Chase (25k owed, instigator of my current situation) AGAIN, and said something to effect of - "Look, I'm going to file for Bankruptcy and then you won't get ANYTHING... I'm offering to go back to the $500/mo payment I was making before you doubled it. Will you take another look at my acct, properly maintained for 10 years and give me a break here?"

Or do you think they'll assume I'm threatening them and just blow me off like before? The 10 year customer line didn't help on my previous letter and I did say this on the phone to a low-level supervisor, who was sympathetic but only gave me the CCC 800#. But I didn't think I would really have to file then and now I know I will.

Just a thought....

Its certainly worth a shot. Chase was also a big PIA for us with 29% interest. We asked to have it lowered, explained our situation, etc. Wouldnt budge. Under the DMP they did lower it though. But after we decided to file to BK and informed them THEN they all the sudden were willing to work with us. Too little too late I told the. If you call (they do have an internal debt dept) and explain BK might be in the future they might be willing to work something out.