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We are $120K in CC debt, which is due to an entrepreneurial venture that failed. We are are now trying to figure out how to move ahead. We would like to settle, mainly because BK becomes a public record. We've maintained a decent credit rating, only because we kept borrowing more money just to make all our payments. It's just too much. We are currently 30 days delinquent on all our CC debt. We did purchase the ebook that is offered on this site, which was full of great information.

We have about $15K that we can pull out of IRAs. The rest is going to have to come on a monthly basis. We can put maybe $2k/mo towards this. (Our previous debt service was about $3500/mo )


1) We have a 2nd mortgage with Washington Mutual, and a credit card with Wash Mutual. We want to continue paying on our debts that are secured. How should we handle a washington mutual credit card debt, when they also have a 2nd mortgage on us?

2) It seems like several of the CC companies want us to file bankruptcy.

(Such as Citigroup and Washington Mutual). When they call, they keep asking for a letter from our bankruptcy attorney. They seem to really be pushing for us to get our BK attorney lined up. Is this normal?

3) We have 4 credit cards through Bank of America worth a total of $60K. They made a 40% settlement offer.

Any advice?

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What do you want to do? (pay off all debts, preserve your credit for future ventures, throw your hands up in frustration and run away to Tibet...) Do you own any real property? Any other assets?

Are you morally opposed to BK? Do you have the income and cash reserves to deal with this debt and support yourself?

Your situation is unique to you and so are your options. No one can tell you what is important to you...But, bankruptcy exists as an option to preserve significant personal assets (like your home, for example) while liquidating other less significant assets to pay your creditors. It allows debt to be discharged, but follows you, credit-wise, for 7-10 years.

I've seen consumers go both directions and noticed a few things, in general. My experience is that Bk people's scores bounce back faster (3 to 5 years) and then hit a glass ceiling of around 620 - 650. Consumers who pay off rather than file have depressed scores for a longer time period, but then are able to get their scores higher (in the 700's).

So, it depends on your ability to pay, your priorities/desires and your future goals...

*waits for feedback*

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