New to the forum and would appreciate some advise. Have recently had a business fail. We now have over $500,000 of business and personal debt. There are several reasons why we do not want to take bankruptcy, and have had new appraisals done on our home and have confirmed we are upside down on mortgage. We would like to begin negotiating with the personal creditors on unsecured cc debt. Most are 90+ days and would like to start sending validation letters to the couple of creditor firms we have begun receiving letters from. We are insolvent so therefore are our chances for settling the personal credit card debt high or low? I have seen on this forum that the credit card companies have begun suing as well as the creditor firms, will they deal with us or just proceed to sue? Thanks for your input.
What will you try to settle with if you are "insolvent"? In the past, the actions of some creditors haven't been particularly rational. For example, Dumb Bob finds it amazing that various national banks are requiring infusions of billions of dollars even as they charge people 30% interest on their credit cards, get perhaps 1.5% of every credit card transaction, charge $40 each for over limit, returned payments, and late payments. How could anyone not make a killing in that business? The banks have figured out a way! So Dumb Bob wouldn't argue that their responses to your overtures will make any logical sense. They may insist on the entire loaf and get nothing to eat at the end. If there was some way to lay out on the table what your situation was and make some sort of deal with the group, that might be salvation but Dumb Bob doesn't know of any way to do that. Likely each of them will be out to maximize what he gets to the determent of everyone else. Dumb Bob suspects that if you show them that you owe a half million dollars and have just this little bit to pay, someone will accept that, or that plus some amount each month. But that won't get everyone solved. That's the problem. If you choose to fight this, it will be very difficult.
Why wouldn't you consider bankruptcy if you're insolvent, owe half a million, and are upside down in your house? Creditors may well sue and get judgments. They could force a sale of everything you own. Or they could just sit there with the judgment, let the interest accrue, and hope that you get some money sometime within the next ten to twenty years (or however long a judgment is good for in your state).
Your right, they may sue and obtain judgments, but I would intervene before any judgments occurred. But bankruptcy is last resort and the way I look at it now, all they can say is no. I figure I might as well try to negotiate the debt down and pay off rather than bankruptcy. But in the end, that is a resource I may have to consider. I just wanted to know thoughts on settlement possibilities given this scenario. Thanks
I once owed a bit more than 300K e and did not want to do a bankruptcy. I did not want to sell my home, and as far as bank accounts they could attach them but being self employed they would not get much from them. When I first knew I was gong to go under I started selling a lot of assets so I would have some money to pay off the OC's that would work with me. Mostly all did but they did not do it until I was 90 days late. Some gave me a break of ZERO interest for a year, others took off about half of what I owed and let me pay in large chunks for the next year, and some would not negotiate. The ones that didn't never sued me but they sold and or transferred the account to JDB who did sue, but by then I was getting pretty savvy into how to go on the offense. What I think you are saying is you have money now and or think you will have money in the near future,to pay them if you have to, and until that time you are figuring out how to pay them off for less if at all, is this correct? You can start calling the creditors now (ONLY THE OC's) or have some gone to third parties already? Tell them you need a hardship plan and that you do want to pay them but need some room. They may or may not take you up on it now as I have found they need to have you 90 days late and then they seem to want to listen to you a b it more and try to work out something. WOofer
What does "intervene" mean? Sure. You should figure out the amount of time these will be within your state's SOL. [quote[ But in the end, that is a resource I may have to consider. I just wanted to know thoughts on settlement possibilities given this scenario./QUOTE] Of course you should try to find a way to settle.
