**NOTE: I initially posted this question in the Collections forum but then realized that this forum might be better suited for it. I apologize in advance for the double post and won't have any problem at all with a mod deleting the one that is where it doesn't belong.
Okay, so I have a close friend who has a large credit card debt. Long story behind that, but I won't get into that. Point is he wasn't able to afford to pay for any of them then and he's still barely able to get by now. He wanted to declare bankruptcy some years ago but was not able to afford it, and debt consolidation would not have helped because there was no way he was going to be able to make any payments unless it was $50 or less a month. So he ended up just ignoring it. His last payments to any of his credit cards was in October of 2003.
Now the statute of limitations on unsecured debts in TX is 4 years, but one debt collection agency filed against him 3 days before one of his debts could expire (back in 2007), and now they've scheduled a hearing for a Motion for Summary Judgment this October 1.
He has many other credit card debts besides this one, but not a single one of those debtors has attempted to file a suit against him, and those debts are scheduled to fall from his credit report some time next year. He doesn't even receive collection letters from any of his old debtors anymore except around tax season when they offer a bunch of discounts on his old debts so that he'll use his income tax money to pay them off (but he has to use that money to catch up on other expenses, such as his car and electricity bills, since he's usually behind by that time).
Anyway, unless the collection agency suing my friend fails to show up to the hearing (which I seriously doubt), my friend will in all likelihood lose and will then have a judgment hovering over his head. So he's going to have to declare bankruptcy anyway. He still doesn't have the money to pay for it, but, luckily, there are a few people in his life now who are all willing to pitch in close to about $2000 to help him with that.
My question is this: should he use this money to go ahead and declare bankruptcy even though his other now expired debts will fall off of his credit report around this time next year anyway, or attempt to settle with the agency suing him and agree to pay them the $2000 instead so that he can save himself the trouble of a bankruptcy? We don't even know if the agency would accept the deal since the original debt was for about $7000 and they're seeking $12000, but I thought that if he talked to them and showed them that his expenses (insulin, mortgage, car, food, phone, child support, etc) almost exceeds his means and that he's planning to file for bankruptcy that they'd agree to take something over nothing.
What do you all think? Assuming that they'd be willing to take such a deal, would it be best to settle on the one debt, or declare bankruptcy to clear them all even though they're all expired now and only have a year left on his credit report?
Also, if anyone could tell me how fast a company is generally able to act after being awarded a judgment, that would be great. I'm talking about placing a lien on a checking account or seizing assets (like furniture), that sort of thing. Reason I'm asking, even though there are people (including myself) who are willing to help my friend financially, it will still be a couple months before we'll all be able to scrape enough together for him to use. I know that some BK lawyers are willing to accept payments, but I think I was told that they won't actually begin filing until after they've received the whole thing. Any info on this would be appreciated. Thanks in advance.
Okay, so I have a close friend who has a large credit card debt. Long story behind that, but I won't get into that. Point is he wasn't able to afford to pay for any of them then and he's still barely able to get by now. He wanted to declare bankruptcy some years ago but was not able to afford it, and debt consolidation would not have helped because there was no way he was going to be able to make any payments unless it was $50 or less a month. So he ended up just ignoring it. His last payments to any of his credit cards was in October of 2003.
Now the statute of limitations on unsecured debts in TX is 4 years, but one debt collection agency filed against him 3 days before one of his debts could expire (back in 2007), and now they've scheduled a hearing for a Motion for Summary Judgment this October 1.
He has many other credit card debts besides this one, but not a single one of those debtors has attempted to file a suit against him, and those debts are scheduled to fall from his credit report some time next year. He doesn't even receive collection letters from any of his old debtors anymore except around tax season when they offer a bunch of discounts on his old debts so that he'll use his income tax money to pay them off (but he has to use that money to catch up on other expenses, such as his car and electricity bills, since he's usually behind by that time).
Anyway, unless the collection agency suing my friend fails to show up to the hearing (which I seriously doubt), my friend will in all likelihood lose and will then have a judgment hovering over his head. So he's going to have to declare bankruptcy anyway. He still doesn't have the money to pay for it, but, luckily, there are a few people in his life now who are all willing to pitch in close to about $2000 to help him with that.
My question is this: should he use this money to go ahead and declare bankruptcy even though his other now expired debts will fall off of his credit report around this time next year anyway, or attempt to settle with the agency suing him and agree to pay them the $2000 instead so that he can save himself the trouble of a bankruptcy? We don't even know if the agency would accept the deal since the original debt was for about $7000 and they're seeking $12000, but I thought that if he talked to them and showed them that his expenses (insulin, mortgage, car, food, phone, child support, etc) almost exceeds his means and that he's planning to file for bankruptcy that they'd agree to take something over nothing.
What do you all think? Assuming that they'd be willing to take such a deal, would it be best to settle on the one debt, or declare bankruptcy to clear them all even though they're all expired now and only have a year left on his credit report?
Also, if anyone could tell me how fast a company is generally able to act after being awarded a judgment, that would be great. I'm talking about placing a lien on a checking account or seizing assets (like furniture), that sort of thing. Reason I'm asking, even though there are people (including myself) who are willing to help my friend financially, it will still be a couple months before we'll all be able to scrape enough together for him to use. I know that some BK lawyers are willing to accept payments, but I think I was told that they won't actually begin filing until after they've received the whole thing. Any info on this would be appreciated. Thanks in advance.
Comment