Can You Settle New/Young Debt?

[nobk4me]

2 hours ago, DynamiteMan said:

Dude thank you for the info! 
 

Let me know what you think about this…

 

I have 140k in a high yield savings. Never paid anything out of this account.

 

I have 10k in my Chase checking account. I don’t owe any money to chase bank. I currently am using this account to pay EVERYTHING right now (monthly expenses, all loans, food, credit cards, etc) and my work checks are direct deposited there. 

 

I also opened up a local bank account here in town last month that had $100 in it. I opened it because I know I’ll be defaulting soon.

 

So with that information, can you tell me how I should approach this and where to move my money? 
 

How do I pay creditors a settlement when it gets to that point? From what account? 
 

let me know, thanks!  

Your $140K savings should be safe, if it is in a bank where you don't have any debts.  I would move most of the money in the Chase account to the new bank account.   Move your direct deposit paycheck there as well.  I would keep the Chase account open, but without a lot of money in it.

How to pay creditors a settlement?  With money orders or a cashier's check. 

[DynamiteMan]

2 minutes ago, nobk4me said:

Your $140K savings should be safe, if it is in a bank where you don't have any debts.  I would move most of the money in the Chase account to the new bank account.   Move your direct deposit paycheck there as well.  I would keep the Chase account open, but without a lot of money in it.

How to pay creditors a settlement?  With money orders or a cashier's check. 

Thanks so much for your help! I can just mail a cashiers check right? 

[nobk4me]

1 hour ago, DynamiteMan said:

Thanks so much for your help! I can just mail a cashiers check right? 

You should be able to mail it.  It's always possible they will want some other payment method, but I would say, I mail a cashier's check, or they get nothing.

[DynamiteMan]

2 minutes ago, nobk4me said:

You should be able to mail it.  It's always possible they will want some other payment method, but I would say, I mail a cashier's check, or they get nothing.

Thanks I love it! That’s what I’ll do.

[nobk4me]

More thoughts:  you mentioned above, you use your Chase checking account to pay credit cards, along with everything else.  Will you be defaulting on the credit cards?  Even if you plan to keep them current, chances are they will dump you, once your credit score plummets when you default on the loans.  They will most likely close the accounts, or cut your credit limits to the existing balance, and jack up your interest rates.  So you may need to default on them as well.  So, I would advise that you keep using the Chase account to pay ALL debts.   Everything else, such as your daily living expenses, should be paid out of the new account.

[DynamiteMan]

13 minutes ago, nobk4me said:

More thoughts:  you mentioned above, you use your Chase checking account to pay credit cards, along with everything else.  Will you be defaulting on the credit cards?  Even if you plan to keep them current, chances are they will dump you, once your credit score plummets when you default on the loans.  They will most likely close the accounts, or cut your credit limits to the existing balance, and jack up your interest rates.  So you may need to default on them as well.  So, I would advise that you keep using the Chase account to pay ALL debts.   Everything else, such as your daily living expenses, should be paid out of the new account.

Ok thank you for the advice! I’ll be defaulting on one Wells Fargo Credit card. I have already calculated that amount into my total debts.