Restructuring...

[freedom]

what would happen if i did my own restructuring in that i let a few cc bills go into collections while i used their payments to pay off other debt? but, i continued to pay a high balance unsecured line of credit....

my intention would be to pay all the debt, but in my own restructuring manner. i know it would effect my credit but it wouldn't be as bad a bankruptcy. i'd just be able to pay off credit faster using the funds that would otherwise go to the delinquent cc companies.

any thoughts?? and thank

[lillaimof2kids]

You can definately try that route first. Once you've gone a few months not paying your cc bills. They will try to start working with you too. Sometimes they will make a deal with you to get your card paid. Ex., say you owe $10,000 on a CC, they may accept $2000 and say it's paid off. Now, I have heard that sometimes you have to claim the $$$ you didn't pay as income. They'll send you a 1099 during tax season.

I haven't done any of this...my sis in law did.

DH and I did get a couple CC companies to set us up on auto payments at 2% for 6 months so we could try to get back on our feet. The only problem with this was when we still couldn't dig ourselves out of the hole we were in, I had to close the bank acct. because they kept automatically withdrawing money after I told them to stop.

Best of luck to you!

[krielly]

The thing is, I'm not sure it wouldn't be as "bad" as you say........
Either scenario is going to be a really bad hit to your credit report.

You don't say whether you are considering doing a Chap 7 or Chap 13? It's good to look at your options before deciding. Many many folks on this forum have tried to work things out with creditors, only to delay the inevitable.

Dont' forget about all the interest/penalties/fees that will continue to rack up while you "re-structure". The beauty of BK is that it freezes all of that as of the day of filing (for unsecured debt).

It might be a good idea for you to have a couple of free consults with BK attorneys. See where you stand.

JMHO
Good luck
K