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Bankruptcy as a negotation tactic?


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I lost my job almost a year ago and now I'm being sued by Discover (OC)for almost $20k (I just answered the complaint thanks to the great posts on this site). I'm trying to work out a settlement with the plaintiff's attorney but they won't budge off 85%. Does anyone think there's merit in me 'mentioning' that I'm considering declaring Chapter 7 bankruptcy (I really don't have any assets to sell) to try to get them off of their position and dramatically reduce the negotiated amount? I don't want to play that card if I don't have to but it's the only thing that I can think of now. Does anyone think that will hurt my case going forward?

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I lost my job almost a year ago and now I'm being sued by Discover (OC)for almost $20k (I just answered the complaint thanks to the great posts on this site). I'm trying to work out a settlement with the plaintiff's attorney but they won't budge off 85%. Does anyone think there's merit in me 'mentioning' that I'm considering declaring Chapter 7 bankruptcy (I really don't have any assets to sell) to try to get them off of their position and dramatically reduce the negotiated amount? I don't want to play that card if I don't have to but it's the only thing that I can think of now. Does anyone think that will hurt my case going forward?

Why not try to fight it and in the worse case, if you lose, then file for BK?

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i dont think it will work.

it depends on who their attorney is, because some of those attorneys operate under the "talk is cheap" doctrine. until you actually do something they will not care, and that includes an ITS.

maybe the arbitration card may help, but for $20k i dont see them budging too much on a threat that may be empty. they'll do whatever they can to get their money if you threaten you better deliver

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Let's say you can negotiate a $20k debt down to $10k, then that sends the message that you must have assets somewhere, so as an attorney, I would not buy it.

Don't recall where I read it, but somewhere I saw where they generally do not fall for that threat period. Otherwise, every debtor would do that. They'll believe it when they see it.

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If you actually qualify for a Chapter 7 BK, but it happens to be in your best interest to file it sometime in the future, would it help in negotiating a settlement if the BK attorney you've hired makes a nominal offer to settle the debt?

get into targeted discovery and then send admissions 2-3 at a time. eventually they are gonna miss one set and then get them deemed admitted.

The BK card is not good to play now because if you mention it now, they will have time to get their ducks in a row. Your best option is to get into a diswcovery fight then offer them the same amount they would get from a JDB.

Just my opinion that threatening BK will come back to bite you if you do have to file BK. also by engaging in negotiations in that matter will be brought up in court(trial court or BK court) and the judge may not look kindly to the manner in which you threatened BK.

It almost sounds to them as if you defaulted on purpose and are now thumbing your nose at them. BK is going to tighten up their timelines a bit more than regular court.

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get into targeted discovery and then send admissions 2-3 at a time. eventually they are gonna miss one set and then get them deemed admitted.

Just my opinion that threatening BK will come back to bite you if you do have to file BK. also by engaging in negotiations in that matter will be brought up in court(trial court or BK court) and the judge may not look kindly to the manner in which you threatened BK.

It almost sounds to them as if you defaulted on purpose and are now thumbing your nose at them. BK is going to tighten up their timelines a bit more than regular court.

Makes sense.

Please elaborate on "targeted discovery".

Thank you Seadragon!

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