Debt Management?

[Liaah]

I am in the process of filing Bk, but my father has recently passed away leaving me an inheritance. This money will keep me from filing BK.

Is it possible to set up a debt repayment plan with one of the approved counseling services to avoid turning all of the inheritance over to the CC's at one time? I am currently almost 6
months behind on all CC payments. This inheritance was completely unexpected.

I would be able to make the payments with this added $.

Just trying to think of any options I have, instead of just turning over all the money in one lump sum. My credit is shot now anyway.

Thanks

Also, since I now have some $, could I negotiate with the CC to settle my debts for less than I owe?

[JRScott]

I am sorry to hear of the passing of your father. My condolences.

You mention that the inheritance is enough to keep making payments. Is it enough to pay off the debts entirely? If not it possibly is only a temporary solution.

You can use debt settlement if you desire. Keep in mind though that you would be responsible to pay taxes as though it were income on any amount of debt forgiven in excess of 600 dollars per creditor I believe. They would mail you 1099s towards the end of the year for the debt forgiven amount, which does count as income sadly. Still if the inheritance is not enough to cover the full amounts and the tax burden would not be excessive this is perhaps a good solution.

The Debt Consolidation programs generally fail. I'm not saying you would fail, but it is difficult for many folks to pay them off. It is certainly something to consider. I'd sit down and perhaps get some quotes from them. Then taking the quotes figure out if you can maintain it on just your income without the inheritance for the duration of the plan. If you can't, then it isn't a good idea. There is no telling what emergencies might come up and eat away at the inheritance which is why I suggest considering it without including it.

Also has the taxes been paid on the inheritance yet? If not then make sure to set aside enough funds to pay the tax. In addition I would put at least 1000 dollars into a savings account for a rainy day fund, not to touch except in emergencies. Then sit down with the remainder and decide what is the best option for your situation.

Having more information might could help those here come up with a better of idea of what advice to give in the situation. Good Luck.

[Liaah]

Thanks, I am not sure right now what the total amount will be.
Could be enough to pay off all debt, maybe not. Depends on taxes. Also, part of the inheritance will be a house that I have no idea when it would be sold. I also have a brother, so not all of the inheritance will be mine.

Creditors have stopped calling us right now because we had retained a lawyer and told them that, but if they call again I might ask them if they will settle with me. Can't hurt to try I guess. Most are now starting to be sold off to 3rd party collections I think. I don't know if they will be easier to deal with or not.


Again, thanks!

[leftyf]

I think if you can tell them "I have $XXXX.00 to pay you right now", you will be in a great bargaining situation. You may want to have an attorney help with the debt negotiation...it looks like a lot of them are into that now also. You could probably do it yourself if you're pretty tough and thick-skinned, but a lot of attorneys are pretty good negotiators and can be even more annoying than debt-collectors (LOL, I'm half-joking here.) I suspect the 3rd party debt collectors will be at least twice as annoying as the original creditors...just a hunch.