What is the best way to negotiate with my creditors?

[Pacificang]

After reading extensively on this site, I have concluded that given my situation I should seek the help of someone that can help me negotiate with my credit card companies.. Rather than file BK... Everything I have heard or read all conclude that they are scams to take advantage of people in financial distress. Any suggestions of where I should go from here? What is the best way to negotiate with my creditors? Thanks for your help!

[StartingOver08]

The best way is for you to do it yourself. Plan your budget as to what you can afford to pay. Do not negotiate with the CSR's as they do not have the authority. Get to the right dept, usually the hardship dept to negtiate, unless you are behind, then it will be the collections dept.

Go to this website www.creditinfocenter.com and look at the forums section. There is tons of info on credit and negotiating - all for free. There is even a section devoted to settlements. This is a do-it-yourself type process for many reasons - not the least of which is - once you get out of credit h*ll you do not want to go back there!

Good luck.

[HHM]

Well, good luck with that. Most people who attempt to negotiate with creditors to avoid BK end up filing BK within a year anyway.

What you really need to assess is whether you have the resources to settle and whether you can accept the consequences of doing so (which are far worse than filing BK).

1. You must default on the accounts you want to settle. (they won't even talk to you about settlement until you start missing payments...short of offering to covert the existing balance to a closed-end loan at a fixed interest rate).
2. Do you even have the money to settle. If you think you can reduce the balance and get a long term payment plan, forget it.
3. Thus, can you come-up with 30-60% of the balance you owe and be able to pay it in 1-6 monthly payments.
4. Are you prepared for the tax consequences. Forgiven debt is taxable income (see IRS Form 982).

[2Bshinyandnew]

Well, good luck with that. Most people who attempt to negotiate with creditors to avoid BK end up filing BK within a year anyway.

Perhaps their failure is due to not having the information needed at the right time? The link provided by Startingover08 is pretty awesome! If I had that info a year ago, I might not be where I am now. I'm not convinced that failure to negotiate successfully with creditors and avoid bankruptcy needs to be something only a minority of folks accomplish. I don't think it HAS to be that way.

What you really need to assess is whether you have the resources to settle and whether you can accept the consequences of doing so (which are far worse than filing BK).

1. You must default on the accounts you want to settle. (they won't even talk to you about settlement until you start missing payments...short of offering to covert the existing balance to a closed-end loan at a fixed interest rate).
2. Do you even have the money to settle. If you think you can reduce the balance and get a long term payment plan, forget it.
3. Thus, can you come-up with 30-60% of the balance you owe and be able to pay it in 1-6 monthly payments.
4. Are you prepared for the tax consequences. Forgiven debt is taxable income (see IRS Form 982).

The above are good questions to ask yourself.

[HHM]

Perhaps their failure is due to not having the information needed at the right time?

Not really, it is simply that most people are in denial about their circumstances and grossly misinformed about BK, thus, they are will to try "anything" to avoid BK.

The thing is, debt settlement is only a tool for someone who legally cannot receive a discharge in BK, or higher net worth individuals who cannot file a 13 because of debt limits, but have too many non-exempt assets to do a chapter 7 (and where a chapter 11 does not make sense). Other than that, debt settlement usually puts a person in a worse circumstances for credit reporting and financially.

[Pacificang]

I agree, I have been in denial about my circumstances and grossly uneducated about BK, and yes we are willing to try "anything".
I can not file chapter 7. I have a jointly owned asset With friends and family that I cannot relinquish to a trustee.. I have to find a way to sell a portion of this asset or borrow against it and settle my debt.. In the meantime how do I deal with these creditors? if they all agreed to a five year plan I still cannot pay them and servive..

[HHM]

I agree, I have been in denial about my circumstances and grossly uneducated about BK, and yes we are willing to try "anything".
I can not file chapter 7. I have a jointly owned asset With friends and family that I cannot relinquish to a trustee.. I have to find a way to sell a portion of this asset or borrow against it and settle my debt.. In the meantime how do I deal with these creditors? if they all agreed to a five year plan I still cannot pay them and servive..

Well, if you cannot even swing a 5 year plan, then Debt Settlemet is a non-starter.

Ok, so you have an asset that has non-exempt equity. (I am assuming this is probably jointly owned real estat...what is it?)

First, the trustee is only entitled to what ever your rights are in the property. Could you legally sell the property without the consent of the other owners? If the answer is no, than neither can the trustee.

Options.
1. Sell your share for fair market value, and dissipate the cash and file BK.
2. File chapter 13 Bk, and at least pay over 60 months the value of the nonexempt equity.
3. File chapter 7, and let the trustee figure it out.

[Pacificang]

[QUOTE=HHM;225087]Well, if you cannot even swing a 5 year plan, then Debt Settlemet is a non-starter.

First, the trustee is only entitled to what ever your rights are in the property. Could you legally sell the property without the consent of the other owners? If the answer is no, than neither can the trustee.

If this is accurate information, and I believe that it is, you just solved my problem.. to reiterate, you believe, at the appropiate time a letter from the corporation informing the trustee that the corporate bylaws eplicitly state that, "Do to the nature of the corporations holdings, the sale of common stocks are prohibited withhout expressed consent of the board of directors" he would be unable to liquidate my asset..? Resulting in an exemption.

[2Bshinyandnew]

[QUOTE=Pacificang;225183]

Well, if you cannot even swing a 5 year plan, then Debt Settlemet is a non-starter.

First, the trustee is only entitled to what ever your rights are in the property. Could you legally sell the property without the consent of the other owners? If the answer is no, than neither can the trustee.

If this is accurate information, and I believe that it is, you just solved my problem.. to reiterate, you believe, at the appropiate time a letter from the corporation informing the trustee that the corporate bylaws eplicitly state that, "Do to the nature of the corporations holdings, the sale of common stocks are prohibited withhout expressed consent of the board of directors" he would be unable to liquidate my asset..? Resulting in an exemption.

The way I understand it, once you file a BK petition, the trustee has the same ability/rights/access to your non exempt property as you did. If you have interest in a corporation's common stock, the trustee's access to that stock post petition would be exactly what your access is/was. If you could have somehow liquidated that stock, the trustee can too.

So, if "expressed consent of the board of directors " is needed to liquidate your interest in the asset, the trustee will have the same rights to gain that consent as you would have.

Thats the way I understand it