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Some last minute advice before I drop the hammer...


blkNgld
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Boy am I glad I found this site and forum. I will be surely spending many hours in research. Unfortunately I may have found it a bit too late as I am in the process of filing for chapter 7.

I just wanted to get a few opinions or recommendations as to what my next step should be. I am currently in college and have no income. I have some old debts of which three have judgments (garnishments) awarded against them (2 for Sears, 1 for Citibank). The total debt from all my collections approaches 10,000. I have contacted many of my creditors and offered settlements and have received responses in the neighborhood of 50-70% discounts. My father said he would entertain the idea of helping me on a few of my accounts. One account though is giving me a problem and it's the Citibank judgment. The judgment is for 4,000 and they won't accept less than 2,000 even after I threatened bankruptcy. The weird thing is they offered to settle for 1,600 in August of last year. I suppose they are tacking on more interest. This particular creditor is continually forcing me to appear in court to make a statement of my financial status and last time yanked the last 20.00 in my wallet.

Again, most of these debts are very old and have been sold multiple times. The Sears account has been closed since the 90's but I think I made some payments around 2000. Citibank is no longer affiliated with my judgment in any way. I am surprised that this collection company would stand firm on their 2,000 or nothing offer.

Anyway, I would just like some opinions as to some possible alternatives to bankruptcy. I just finished my CCCS counseling and am ready to drop the hammer but I don't like the idea of a 10yr record tarnishment. :( The idea of being 40 when that finally drops off scares me. :(

Do you think I should continue to negotiate with the collection agencies and try to settle one by one with either borrowed money (from dad) or school loans?

Maybe just some advice on the next step. I can get my money refunded from the law firm if I choose not to file.

Also, I started working on my credit reports last year by challenging entries and increased my score from high 400's to low 500's.

Thanks in advance for any credit-saving tips!! :D

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What state are you in ?

When was the last time you paid the original creditors for those debts that have NOT gotten a judgment against you ??

Sears, Citibank = all the same, the Sears card is issued by CitiBank. The fact that the judgment creditor is willing to settle for 50% of an unpaid judgment is actually a fair offer, considering the unpaid judgment continues to accrue statutory interest.

As for the debtor's exam they keep hauling you into court for, that WILL continue, they have the right and if you don't find a way to pay them off, they can keep doing it for the life of the judgment. Depending on what state you're in, that could be anywhere from 5 years to 20 to indefinitely (TX) !

The problem here is that if the CA's see you settling debts, they may decide to sue you to get THEIR piece of the pie. Just be warned, they ARE watching for that type of activity.

The student loans are NOT dischargeable in bankruptcy - period. So, w/o those, how much total debt are you talking about ??

Oh .. and the 'threat of bankruptcy' is no threat at all, creditors and collections hear it hundreds of times a day - if not more. It is not an effective negotiating tool.

As for the 10 years on your reports, BK is NOT a 10 year credit death sentence. Once it's over, you repair your credit and start rebuilding. You will recover faster after bankruptcy than you will with settlement negotiations. People here have recovered with better scores than they had in years before they filed and they have new credit. With careful repair and rebuilding, keeping your credit clean, you could qualify for an FHA mortgage 2 years post-BK - that won't happen with settlements you'll have to wait out the full reporting period until they drop off.

Then there's the possible tax hit. You may get a 1099-C from any settlements. Any amount of $600 or more that is 'forgiven' in a settlement deal is reportable as income on your tax returns. If you cannot prove you were insolvent at the time the debt was forgiven, the IRS will then be expecting payments.

So.. weigh everything and make your own decisions.

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Holy Smokes! Thanks for the timely response!

"What state are you in ?"

-Kansas

"When was the last time you paid the original creditors for those debts that have NOT gotten a judgment against you ?? "

-Most are around 2001

"The problem here is that if the CA's see you settling debts, they may decide to sue you to get THEIR piece of the pie. Just be warned, they ARE watching for that type of activity. "

The only delinquent loan I have settled on was my student loan (last summer) so that I was able to continue my education and obtain new loans. The rest have just been settlement offers.

"The student loans are NOT dischargeable in bankruptcy - period. So, w/o those, how much total debt are you talking about ?? "

-And I fully intend to pay my new student loans so no worries there. Total debt (w/o student loans) as reported on my CR is about 10,000.

So my credit will actually be repaired faster after BR than settling if I follow the strategic procedures on this site?

The IRS issue is interesting... thanks for the heads up on that one! :oops::shock:

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Also, has anybody ever heard of discrimination against hiring based on a previous bankruptcy? Several years ago I was a stock-broker and I remember during the interview process the hiring manager discussing credit rating extensively and mentioning that serious credit problems or bankruptcy required special consideration during the hiring process. :?

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that won't happen with settlements you'll have to wait out the full reporting period until they drop off.

I was rereading everything and another question popped in my head. If the last time that I made a payment with a creditor was nearly 5 years ago won't they fall off the record fairly quickly with a settlement or does the action of the settlement extend the reporting time?

For some reason I am just so against the idea of bankruptcy -call me cooky.

Thanks again!

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I doubt seriously that there is any cause of action for not hiring someone with bad credit. Generally, to be the "victim" of actionable discrimination you have to be the member of a "suspect class" or a "quasi-suspect" class.

A suspect class would be someone who is a member of a certain race or religion that is being discriminated against. An example of a "quasi-suspect class" would be someone who is being discriminated against because of age, national origin, or gender.

Having bad credit does not make you a protected minority.

As for the stock broker position. To work as a stock broker you have to have to be licensed and bad credit or a previous bankruptcy could hurt you in that regard. It also indicates your inability to manage finances which isn't a situation I would want with my broker.

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Just a bit more information:

The only problems I am having is with two law firms in regards to the two judgments. The rest of the debt, while being listed on my report as under collection has been fairly quiet. I would assume it is either SOL or very close to it. This statement puzzles me a bit:

"The problem here is that if the CA's see you settling debts, they may decide to sue you to get THEIR piece of the pie. Just be warned, they ARE watching for that type of activity."

Would you be referring to other collection accounts that are "quiet" but would then file for a judgment or are you referring to other judgments that would pursue further legal action (whatever in the world that might be)? Also what "piece of the pie" exists? My only source of funds for a possible settlement would be from my father or my student loans. There would be no "pie" to draw from for several years..

At this point I only receive collection efforts from two different agencies/attorneys. Does it seem like it would still be a good idea to file 7?

I'm sorry for all these questions and everybody just take a stab and whatever you think you can answer. My appointment with the "legal services" firm regarding my possible 7 is July 11th so I still have some time for research.

Also, I read on another thread that paying for your credit reports allows for the procurement of a more comprehensive copy than what you get free annually from annualcreditreport.com. Is this correct? My three free reports are quite comprehensive.

Thanks again!

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I doubt seriously that there is any cause of action for not hiring someone with bad credit. Generally, to be the "victim" of actionable discrimination you have to be the member of a "suspect class" or a "quasi-suspect" class.

A suspect class would be someone who is a member of a certain race or religion that is being discriminated against. An example of a "quasi-suspect class" would be someone who is being discriminated against because of age, national origin, or gender.

Having bad credit does not make you a protected minority.

As for the stock broker position. To work as a stock broker you have to have to be licensed and bad credit or a previous bankruptcy could hurt you in that regard. It also indicates your inability to manage finances which isn't a situation I would want with my broker.

Thanks for time and response, BigLaw.

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Hey guys/gals, I have been calling my creditors this afternoon trying to negotiate a settlement before going to my bankruptcy meeting in July. If anybody has any answers to the following questions I would be greatly appreciative!

If the last time that I made a payment with a creditor was nearly 5 years ago won't they fall off the record fairly quickly with a settlement or does the action of the settlement extend the reporting time?

"The problem here is that if the CA's see you settling debts, they may decide to sue you to get THEIR piece of the pie. Just be warned, they ARE watching for that type of activity."

Would you be referring to other collection accounts that are "quiet" but would then file for a judgment or are you referring to other judgments that would pursue further legal action (whatever in the world that might be)? Also what "piece of the pie" exists? My only source of funds for a possible settlement would be from my father or my student loans. There would be no "pie" to draw from for several years..

Also, I read on another thread that paying for your credit reports allows for the procurement of a more comprehensive copy than what you get free annually from annualcreditreport.com. Is this correct? My three free reports are quite comprehensive.

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Hey guys/gals, I have been calling my creditors this afternoon trying to negotiate a settlement before going to my bankruptcy meeting in July. If anybody has any answers to the following questions I would be greatly appreciative!
If the last time that I made a payment with a creditor was nearly 5 years ago won't they fall off the record fairly quickly with a settlement or does the action of the settlement extend the reporting time?

It would still have to drop off within 7 years from the Date of First Deliquency. Making a payment or arrangement can restart the SOL for suing you for it, if it's not past already, but that doesn't affect the reporting period of 7 years. You can check your state's SOL here http://www.creditinfocenter.com/rebuild/statuteLimitations.shtml

"The problem here is that if the CA's see you settling debts, they may decide to sue you to get THEIR piece of the pie. Just be warned, they ARE watching for that type of activity."

Would you be referring to other collection accounts that are "quiet" but would then file for a judgment or are you referring to other judgments that would pursue further legal action (whatever in the world that might be)? Also what "piece of the pie" exists? My only source of funds for a possible settlement would be from my father or my student loans. There would be no "pie" to draw from for several years..

Both. They don't know you don't have any money and they won't care, anyway. It would be good to have SOL on your side for those.

Also, I read on another thread that paying for your credit reports allows for the procurement of a more comprehensive copy than what you get free annually from annualcreditreport.com. Is this correct? My three free reports are quite comprehensive.

The ones that come directly from each bureau are just mroe accurate, that's all.

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Equifax is the only one that ever lists a DOFD. TU just shows "apporx date that this item will be removed", but none of that is shown on TrueCredit. You have to get actual reports.

Can I buy that online or is that only available by mail?

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Yup! Go to Equifax.com, Experian.com, or Transunion.com, whichever ones you want. Don't pay for a score, those are fako's.

If you really must have your score you can get reports with real scores included at myfico.com.

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I pulled up my old Experian report and many of the collections do not show up with DOFD. Is there any definitive way to get the exact DOFD on all my collection accounts?

Here is the SOL in Kansas:

Oral Agreements 3 yrs

Written Contracts 5 yrs

Promissory Notes 5 yrs

Open Accounts 3 yrs

One of my typical accounts reads:

120 days late as of Nov 2001

90 days late as of Oct 2001

60 days late as of Sept 2001

30 days late as of Aug 2001

So my DOFD would then be Aug 2001 correct?

A couple of my other accounts only show:

Collection as of Dec 2005, Feb 2006, Oct 2005, etc.

Those accounts I know are delinquent from the same time as the other cards. How can I verify these as being beyond the SOL?

Also, if I am contacting my creditors and offering a settlement number am I creating a new "open contract" that voids the SOL? I HOPE NOT!! :(:(:(

Thanks so much for all your help!

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I'm sorry for all the questions. It's just seeming like bankruptcy isn't the answer here if I can get a lot of these to just go away with the SOL.

If the debt passes the SOL what is my best approach then? Just ignore unless someone attempts to contact me? Can I still be sued after the SOL? This goes back to my original question, if I am forced to provide proof of SOL is there an original, accurate record somewhere available to me?

Thanks again and sorry for all the Q's!

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As for the debtor's exam they keep hauling you into court for, that WILL continue, they have the right and if you don't find a way to pay them off, they can keep doing it for the life of the judgment. Depending on what state you're in, that could be anywhere from 5 years to 20 to indefinitely (TX) !

I did a search on the SOL for judgments in Kansas and it looks like 5 years. When I went to a debtor's exam they yanked 20 bucks out of my wallet. Does that in any way void my SOL by constituting as a payment or contract?

Thanks again!

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I pulled up my old Experian report and many of the collections do not show up with DOFD. Is there any definitive way to get the exact DOFD on all my collection accounts?

Here is the SOL in Kansas:

Oral Agreements 3 yrs

Written Contracts 5 yrs

Promissory Notes 5 yrs

Open Accounts 3 yrs

One of my typical accounts reads:

120 days late as of Nov 2001

90 days late as of Oct 2001

60 days late as of Sept 2001

30 days late as of Aug 2001

So my DOFD would then be Aug 2001 correct? Yep! On something like this, I wouldn't even bother yet; I'd just let it pass SOL and then DV if you want it off your credit report. Keep a copy of all your reports just in case CA's try to change this date.

A couple of my other accounts only show:

Collection as of Dec 2005, Feb 2006, Oct 2005, etc. Hmm I hate it when they do this.

Those accounts I know are delinquent from the same time as the other cards. How can I verify these as being beyond the SOL? One possibility would be to avoid the CA's call the OC's and ask, they might still have you on record, but they may not. Worth a shot.

Also, if I am contacting my creditors and offering a settlement number am I creating a new "open contract" that voids the SOL? I HOPE NOT!! :(:(:(I don't know about Kansas, but I know in California this would have to be a CONTRACT in writing for it to restart the SOL. My advice is to never contact them by phone again except under certain circumstances. I guess what you need to find out is whether a verbal offer is sufficient to kick off a new SOL in Kansas.

Thanks so much for all your help!

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I'm sorry for all the questions. It's just seeming like bankruptcy isn't the answer here if I can get a lot of these to just go away with the SOL.

If the debt passes the SOL what is my best approach then? Just ignore unless someone attempts to contact me? Well that depends. If you want it off your report you can DV. If it's an account that will fall off soon, you may want to ignore it. If they are harrassing you and it's past SOL, you can send them a C&D letter (do a search, it'll explain that).

Can I still be sued after the SOL? No, that's what the SOL is for.

This goes back to my original question, if I am forced to provide proof of SOL is there an original, accurate record somewhere available to me? Providing proof of SOL mostly falls on the creditor or CA. In court, this is something the collector would have to prove, not you. DV is very helpful in figuring out what SOL is. If a collector sent you something that said 6/2000 and tried to change it later, I think a reasonable judge would want to know why they changed it and if they could prove they were doing the right thing. (BTW - the SOL defense is not one that will be brought up for you. If you are sued for an out-of-statute debt you will need to tell the judge that you have an absolute defense becasue the debt is past SOL.)

Sometimes you can't get collectors off your back without proving them wrong in court, that's why you have to treat everything as evidence - keep good records, as if you are going to eventually sue them, even if that's not really the plan for now.

Thanks again and sorry for all the Q's!

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