BK or continue settling CC debt?

[beobeep]

I have $160k of CC debt, $80k that I settled with the CCs. I was new to the negotiating game and did not DV the creditors and will suffer the settlements not being deleted from my report. But at the time I thought I was moving in the right direction by reducing the debt load by $50k.

Recently I sold my house in CO, paid off my second and am debt-free with family. That feels good, but I still have the other $80k in CC debt to deal with. I am in graduate school to find another career path, no secured debt and no job, with an 12-year old car worth maybe $2k.

This is where I am today: to continue to settle I would have to borrow money. The little I have in savings would be nice to keep (~$10k), but I could use it to settle if I were to get the right advice. A lawyer here in NYC where I am going to school said I should do bankruptcy, his rule being that I owe more than a year's salary. He also said that because my credit report shows all these settlements, I'm already looking like a BK, and that I should cut my losses and get on with my life. In the end, he said he can take care of this chapter 7 no problem, and I can walk away with a little in savings and repair my credit with time, whereas with settling it could take as long as a BK and possibly never go away.

Is there value in not claiming a BK and trying to settle, or should I pull the trigger on a BK (my 4 month old daughter would really like to know)??

[LadynRed]

With 80K in credit card debt, I'd be RUNNING to a bankruptcy attorney !!!

There is no logic in BORROWING money to pay debts ! You can't get out of debt by making more debt, plain and simple.

Your lawyer is essentially correct, all those settlements on your reports are damaging and they will stay there for 7-1/2 years !! They can't, however, stick around indefinitely.

You won't be able to keep 10K in savings with a CH 7, the Trustee will take it to distribute to your creditors and you MAY get to exempt a small portion of it, but not much. You will be debt free in about 6 months and you'll have your fresh start for your 4 mo old daughter. You can actually recover faster after a BK than you can with settlements or waiting out the 7-1/2 years of totally bad credit. In 2 years of squeaky clean credit and some credit repair post-discharge, you could quailfy for an FHA mortgage at a decent rate.

[beobeep]

Thanks LadynRed,

Being mid-stream confused things a little, just needed some outside perspective. I really appreciate the board and all the experience you bring to it. Thanks again.