BK after debt negotiations with CC companies?

[endro]

I'm wondering if I go ahead and negotiate a repayment plan at greatly reduced debt load (credit card companies), if I cannot keep up with payments if I can then file BK anyway at the agreed to lessened debt load or do they nail you with a ton of interest and revert to the previous debt load?

[HHM]

If you're going to be filing BK, why negotiate at all and make any payments? You don't have to, and they are not going to rush to sue you. So you have time.

(generally speaking, credit cards companies do not reduce the balance owed and put you on an extended payment plan, settlements generally take a couple forms.
1. Reduced principal balance due, you pay a LUMP SUM to pay off the reduced amount due.
2. Payment plan at reduced or no interest...this is what Credit counseling firms do.
Credit Card Companies typically don't do anything in between.
Sometimes you can get Reduced Principal due for a very short payment cycle, i.e. 2-6 months.)

But anyway, back to your question, yes, if you file BK, the settlement is void, and the entire principal balance plus all accumulated interest and fees (minus any payments you made) become due. However, since you are filing BK, if in a chapter 7, the unsecured debt gets discharged, if in Chapter 13, you will pay whatever percentage you pay to unsecured, but the creditors will claim the FULL amount in their proof of claims they file in a Chapter 13.

[Spartan]

HHM is correct. If you are facing a strong possibility of filing, might as well bite the bullet, the sooner the better. Otherwise, you will just sink deeper and deeper. Many of us have been there, and we all wish we had bitten the bullet much much sooner. If we had, we wouldn't have a deeper hole to get out from.

There is no point in throwing good money after bad money.......

It is a total waste. You will waste the money and end up exactly at the bottom that you hope to avoid. Won't do you any good. You wouldn't even get a thankyou note from your creditors..

[CATCHMEIFYOUCAN]

Get a FRESH START. Your credit is probably shot anyway. I know that I wouldn't negotiate. At one point (and I'm sure most everyone in here was borrowing from peter to pay paul and mary). Eventually my debt just got worst. Like Spartan wrote: There is no point in throwing good money after bad money.......

Best of Luck, Catchmeifyoucan

[CATCHMEIFYOUCAN]

Just to Add the money you are giving to the debt company is the money you could be giving to the lawyer! About May I chose a debt negotiation company not knowing anything at all about what a scam most of the companies turn out to be anyways. That company wanted $3500 upfront before they would even start the negotiations, and to top it off I was to put about $1000 aside every month in a separate savings account. After it accumulated for awhile then they would choose one creditor at a time and try to negotiate a lower amount. After I initially gave them $500 (lets call it a retaining fee the one you would usually give to a lawyer - probably much less though) than I could use them and tell my creditors that those are the people you need to call. Just like paying a lawyer a retaining fee, after you paid him the fee than you could tell your creditors to start calling HIM. As days went by I started researching these debt companies and researching the bankruptcy and the new laws. Why was everyone making such a big hype about the new laws? Thats what scared me into the the debt company instead of going to Bk. But my research continued and the new laws weren't that scary, it just required more paper work and a bit more money to file. I booted out of the debt company and got myself a lawyer and filed instead. The $3500 the debt company was going to charge me would have been about the same amount I would have paid a lawyer. There was better protection in Bankruptcy too and I still had to go through another debt mgmt program but this they called CCCS (credit counseling program) and only at a mere $50 bucks - nothing more nothing less. To make a long story short, I only had to pay the lawyer about $2000 bucks. And now I got a FRESH START !

Good Luck, Catchmeifyoucan.

You can still file Bk if you are in the debt management program or in the middle of the program and any monies you owe them you can include them in the bankruptcy !

[BKTango]

Catchmeifyoucan hit the nail on the head. That's money you could be paying a good attorney for bk. I spent a year in a debt settlement company. Paid them over $3000 (their fee) and then just ended up being able to settle 2 accounts for actually more than what I owed to begin with, and 3 lawsuits at the exact same time. Not all creditors will settle, nowadays it seems most will not. Do what's right for you, but make a wise decision.