Possibilities of Settlement

[Debtor]

What are the possibilities that I could work out a settlement before filing for .25 cents on the dollar with all my credit cards. I owe $30,000 on six different cards.
If I file can I later voluntarily remove the petition if I reach a settlement with my creditors?
Thanks,
Debtor

[CATCHMEIFYOUCAN]

If you work out a settlement with the creditors you will most likely be liable for the forgiven debt and have to pay taxes on the amount - you will be issued a 1099 I believe. To me, not worth it (just remember the creditors still make out BILLIONS of $$$) every year despite the amount of BK'ers. And I'm sure they get a hefty tax write off. Your credit is shot once you file - even if you remove the petition - bk will stay on your credit report for like 7-10 years. There is no sense in filing IF your going to reach a settlement with any of the creditors. More will chime in here to lend you their experience.

Catchmeifyoucan

[magyar123]

Why bother with settlements? Especially if you plan on filing?

[jp2861]

Getting 25 cents to the dollar may be quite a stretch. There are some that won't budge off the amount, others will haggle a bit, but 25 cents is asking alot. I'm not saying it's impossible. If you can work that deal out all the more power to you.

Your credit will be dorked up either way so why even deal with them. If filing is an option I'd probably choose to file. If nothing else, it gives you peace of mind that the financial crisis is over. Settling seems to work for some but there's no guarantee that the remainder of your settlement doesn't get sold and you end up dealing with the crap forever. Even with a settlement in writing there's no guarantee how these collectors will operate.

[FreshLikeADaisy]

Debtor, you've gotten really good information so far. I would only add that you should be prepared to make a large payment upfront when you want a creditor to settle for that little. And of course, as has already been pointed out, the forgiven debt IS taxable income, unless you can prove your insolvency at the time of the debt forgiveness to the IRS.

The other thing you should know is that, no, you can't just withdraw a Chapter 7 petition. You actually have to submit a motion to the court, which may or may not be granted. It is my understanding that being let out of a Ch7 is actually fairly difficult, *especially* if there are any assets involved. You can't put a big fat meaty bone in a dog's mouth and then try to yank it back.

Good luck on that settlement thing, but if it doesn't work out, at least don't file Ch7 until you KNOW for a fact that Ch7 is what you want to do. Good luck!!!

[justplaintired]

We got a call from a collection agency today. A very nice lady, who just basically wanted our lawyers name.


One of my credit cards, Citibank, had sent me to collections, so anyway, we talked for quite awhile. She was real nice, said she had been were we are. She's been a debt collector for 25 years, can you imagine! She didn't pressure me to settle, but she offered me half off the debt. I told her the truth, that we were in BK mostly because we had a card who upped our rate so high we couldn't make the payments. She told me she totally understood this. She basically started in on CC companies and what pieces of scum they are!! I was thinking, this is too cool, a collection co bit**ing about CC! She kept calling me hun and dear, I actually like this lady! LOL


The problem I see with settling, is how are you suppose to come up with the money to do that? We don't have the kind of money, obviously or we wouldn't be here. But talking with this lady actually made me feel better about all this, here a collection co was actually being nice to me, gave me a whole new outlook on this whole thing. She said our economy was pushing people into this and she understood, she told me to hang in there, things will work out just fine whatever we decide! Can you believe that?

[HHM]

Why bother with settlements? Especially if you plan on filing?

Dito, why f'ing settle if you are going to file. Settling, for the most part is a waste of time and money. You really don't gain anything by it.