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Ready to File BK7 & BofA wants to settle, can I?


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Hi all,

Things have progressed quite a lot since my last post. We met with the attorney and we will be filing as soon as I can get a heap of paperwork together for him. Good new is that we qualify for a 7! What a relief!

Meanwhile, BofA who I owe 30,550 to has offered to settle with me for $4,600, 15% of the balance (which is inflated with 6 months of penalties and interest). Sounds like a good deal, every time I've called them to say I can't take their offer, they lower it! I was so surprised... My credit report would read settled for undisclosed amount.

Can I take this offer or would it be considered favoritism over other creditors and cause problems with my bk? I asked my attorney but he hasn't gotten back to me yet and the deadline is this weekend before they charge off the account. So I have to call them tomorrow and give a yay or nay.

Should I take this offer or is it just throwing money down the toilet? The reason I'm considering it is because we are very close to the limit of not being able to file a ch 7 or 13 and this would give us some wiggle room. Also, I have to admit, it's giving me some hope that maybe we could settle out with the other creditors and avoid bk.

The only other creditor I've spoken to is Chase and they said they don't go lower than 40% and they need it all in 4 months. Impossible.

Thank you in advance for your suggestions!

Is that a light I see at the end of this long dark tunnel?

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Agree with Bingo 100%. Two things here:

1) you are filing Bk7. All unsecured debt will be discharged. Why pay anyone? To have a credit card after? They probably will cancel your card anyway.

2) A payment within the past 90 days to one creditor should be "avoided" by the trustee. This means the trustee receives your $4600 payment from BoA and then distributes it equally to all of your creditors (aftre taking their recovery %). 11 U.S.C. 547(B).

IMO, this payment is totally pointless. That's $4600 that you could potentially use for post-BK rebuilding.

fyi- you say that you are considering making the payment to get you wiggle room to be able to file a BK7. If you're on the edge, making this payment would definitely work against your BK7. You'll now have a large amount more of "disposable income" under the means test. It may push you into a BK13.

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Ok thanks for the voice of reason bringing me back to earth. I guess there was still the hope that we could somehow manage to dig ourselves out one account at a time, especially if they are all willing to give us an 85% break on the amount owed. After reading more here I realize that this is highly unusual and not something I can or should expect from the other credit card companies anyway.

We've met with the attorney, paid the deposit and signed a contract with him but have not yet actually filed. Time to face facts and come to terms with it.

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