Is settelment likely on CC's with very high balances?

[eurocab]

I have 5 CC's that all total about 160K unsecured. How likely are the credit card companies to settle this? It seems to me that with such high amounts they would be more likely to take legal action. Can anyone help? Thanks so much.

[brokeanddesparate]

you mention its 5 credit card companies, do you mean 5 differnt banks? how much is on 1 biggest bank? Remember, if you are headed to chapter 7 bankruptcy and have a bk lawyer on retainer(even a $100 retainer) and you mention to cc company when discussing settlement, they know they are likely to get 0 if you bk, so let them know that is something you are considering, but that if you can afford you would rather settle, don't have them deal with your bk attorney, he wants you to bk, negotiate on your own. At my final offer i got of 15%, they wanted to call attorney's office just to verify he was on retainer, they only needed to speak to receptionist, i had called attorney office to let them know to expect call, they just want to verify that bk is an option. Search this site for "settlement", you will see lots of info. It all depends on your hardship, are you now long term unemployed? If you earn as much now as you did when you borrowed and just don't want to pay, thats not a case for settlement probably, but hey, if bk is looming each card wants to settle with you for something rather than lose all in bk. Remember, the amount of debt you are forgiven for is taxable to IRS unless the total of home equity, 401k, IRA, savings, is less than the forgiven amount. Say 50,000 is forgiven, you have 0 home equity, $500 cash savings, and $9500 in 401k/IRA ON THE DAY YOUR FINAL SETTLEMENT PAYMENT on the forgiven card is made, only 10,000 is taxable if file with irs for insolvency- 50,000 forgiven minus 500 minus 9500 equals 40,000, that is the amount of insolvency as measured on day of final payment, so forgiven debt 50,000, minus amount insolvent, 40g, leaves 10g taxable. If your home equity and other accounts are greater than 50g on date of final settlement, the entire 50g is reportable lncome to IRS, and you will owe taxes. Bank will issue a 1099 and its up to you to prove insolvency to IRS. CONSIDER YOUR OPTIONS, CHAPTER 7 OR EVEN CHAPTER 11 can be cheaper in long run, no taxes due on amount forgiven in bk, and no money spent settling. There are many reasons people would rather settle than go bk, but if bk is possible its better in long run. consult an attorney about bk before going settlement route, and remember the attorney earns more if you go bk, so think through his advice and weigh options. Avoid at all costs going past 6 months past due without settling or going bk, its easier to deal with bank than 2nd party collection agency.

Edited September 16, 2010 by brokeanddesparate

[ruttie]

I have received a response today

Edited November 19, 2010 by ruttie

[ruttie]

CAN ANYONE PLEASE GIVE ME SOME ADVISE

Edited November 19, 2010 by ruttie

[OZZIE69]

BUMP

[willingtocope]

They have provided you with what the FDCPA says is validataion/verification. For any more info, you'd have to do that with discovery in court.

For 160k, its likely that one or more will sue...particularly if this was in any way business related.

[Recovering Attorney]

for 160k, I'd be talking BK

[esterlydsl1]

If you are aware of your liabilities, then why do you wait for your creditors taking any action against you? Why did not you tried making debt negotiation? You can always take an advice from some financial expert in your locality to sort out this problem.Now, if they force you into an involuntary bankruptcy, it will take a good amount of time to get over with it.