$30,000 CC debt.... Debt Consolidation or Chapt 7 Bankruptcy?
I have never been behind time with my payments but recently lost my chore and can no longer make the $1000 in monthly payments to 10 credit cards.
I've hear debt consolidators can negotiate down to 30% of debt but then again I don't even have 30% to recompense with. I can make possibly 6 months of payments and that's all.
So would I be better off a short time ago filing Ch 7 Bankruptcy? I've seen a commercial that 75% of debt consolidations go amiss and that they are left with a discouraging credit and a large debt.... but it was from a collapse lawyer.
Answers:
chapter 7 since you have no career.
Forget debt consolidation -- that's usually a big loan to pay off the credit cards. Shifting the debt ain't gonna relieve you now.
Forget debt settlement -- these are the companies promising to settle for half or smaller number. They will trash your credit by letting all your accounts go 90 days previous due. Then offer lowball settlement offers. Most credit card companies veto to play and will just sue you.
Check into a NFCC member credit counseling: http://www.nfcc.org/. These are legit, non-profit companies that propose debt management programs for a nominal fee. They don't settle your debts but negotiate lower interest and payments so you can recompense off your debts.
While in the program, it is noted on your credit report. However, upon completion, that notation is removed and you will own decent credit.
Debt consolidation is usually not a good option. You get screwed and your creditors get screwed. The merely people that debt consolidation is good for is the debt consolidation company. Look for a non-profit consumer credit counseling agency, they will assist you look at all your options including liquidation. Source(s): Certified Consumer Credit Counselor
Stay away from any "debt consolidation" company that promises to cut your debt in half through debt settlement....This is a risky tactic of obviously ceasing all payments to creditors and forcing your accounts into failure to pay to attempt settlements. You pay a monthly fee to a debt consolidator....this entire charge goes towards building a settlement account and to the consolidator's fees to “settle” your accounts within the future. Your credit card companies will deliberately not be rewarded so that all the accounts will default/charge-off so that they can attempt settlements at around 50%. If you are current on your accounts, this process will ruin your credit rating for sure. Debt settlement is like a roll sour the dice with your finances...You can never predict how your creditors will respond to the deliberate defaulting of your accounts...they might settle at 50%...or they might serve you a summons, clutch you to court...and if they win, you could be looking at wage garnishment.
None of these “debt consolidation” firms have the power to force your creditors to accept settlements. Your creditors own the right to refuse these terms and appropriate you to court.
http://online.wsj.com/article/SB12239445…
http://podcast.mktw.net/wsj/audio/200810…
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If you are 100% totally serious about filing for Chapter 7, after you can play a hardball tactic of negotiating big settlements with your creditors....resembling 30 cents on the dollar. Be careful though and only do this if you really intend to pass out the threat to file for Chapter 7...because your creditors might call your bluff and sue you...which would force you to directory even if you never intended to.
FYI: Settled/Forgiven debt is treated like earned income next to the IRS...any debt that is forgiven must be added to your next year's income and you'll enjoy to pay whatever auxiliary taxes
=================
Don't let anyone guilt trip you if you have to record for Chapter 7...do what's best for you ...just remember that you can only directory once every 8 years.
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I've hear debt consolidators can negotiate down to 30% of debt but then again I don't even have 30% to recompense with. I can make possibly 6 months of payments and that's all.
So would I be better off a short time ago filing Ch 7 Bankruptcy? I've seen a commercial that 75% of debt consolidations go amiss and that they are left with a discouraging credit and a large debt.... but it was from a collapse lawyer.
Answers:
chapter 7 since you have no career.
Forget debt consolidation -- that's usually a big loan to pay off the credit cards. Shifting the debt ain't gonna relieve you now.
Forget debt settlement -- these are the companies promising to settle for half or smaller number. They will trash your credit by letting all your accounts go 90 days previous due. Then offer lowball settlement offers. Most credit card companies veto to play and will just sue you.
Check into a NFCC member credit counseling: http://www.nfcc.org/. These are legit, non-profit companies that propose debt management programs for a nominal fee. They don't settle your debts but negotiate lower interest and payments so you can recompense off your debts.
While in the program, it is noted on your credit report. However, upon completion, that notation is removed and you will own decent credit.
Debt consolidation is usually not a good option. You get screwed and your creditors get screwed. The merely people that debt consolidation is good for is the debt consolidation company. Look for a non-profit consumer credit counseling agency, they will assist you look at all your options including liquidation. Source(s): Certified Consumer Credit Counselor
Stay away from any "debt consolidation" company that promises to cut your debt in half through debt settlement....This is a risky tactic of obviously ceasing all payments to creditors and forcing your accounts into failure to pay to attempt settlements. You pay a monthly fee to a debt consolidator....this entire charge goes towards building a settlement account and to the consolidator's fees to “settle” your accounts within the future. Your credit card companies will deliberately not be rewarded so that all the accounts will default/charge-off so that they can attempt settlements at around 50%. If you are current on your accounts, this process will ruin your credit rating for sure. Debt settlement is like a roll sour the dice with your finances...You can never predict how your creditors will respond to the deliberate defaulting of your accounts...they might settle at 50%...or they might serve you a summons, clutch you to court...and if they win, you could be looking at wage garnishment.
None of these “debt consolidation” firms have the power to force your creditors to accept settlements. Your creditors own the right to refuse these terms and appropriate you to court.
http://online.wsj.com/article/SB12239445…
http://podcast.mktw.net/wsj/audio/200810…
==================
If you are 100% totally serious about filing for Chapter 7, after you can play a hardball tactic of negotiating big settlements with your creditors....resembling 30 cents on the dollar. Be careful though and only do this if you really intend to pass out the threat to file for Chapter 7...because your creditors might call your bluff and sue you...which would force you to directory even if you never intended to.
FYI: Settled/Forgiven debt is treated like earned income next to the IRS...any debt that is forgiven must be added to your next year's income and you'll enjoy to pay whatever auxiliary taxes
=================
Don't let anyone guilt trip you if you have to record for Chapter 7...do what's best for you ...just remember that you can only directory once every 8 years.
Related Questions: