Bankruptcy vs debt settlement??

[bigtendominator]

I can't believe the moral degenerates in here.

She borrowed the money, she has the ability to work and
create income, she should pay it back.

Then we've got someone else piping in that she should run up
her credit card before she files for bankruptcy, which
is essentially stealing.

WTF... Just because you aren't looking the person in the face
that you are fucking over, doesn't mean that you aren't
reaming someone up the ass and stealing from them.


hno:

I agree with you completely, however, the counter to that is that the CC companies made an investment and it lost. How is that any different than when someone invests in a stock and it goes belly up.

They have no problem collecting X% of these idiots, who don't know the first things about basic finance. Credit Card companies are partially liable for continuing to issue credit to people with either outstanding debt or available credit that is well-beyond their financial means of repayment.

How do people who make 30-50K, have credit cards that total 40-60K in debt made available to them.


I am not trying to justify anyones actions, I am just telling you what the counter point is to your point.

 

[DollarDay]

OK now onto the discussion about Statute of Limitations vs what's on your credit report.

Legally (i'm not saying that everybody follows these laws because i've seen many people sued for this), under the FCRA (Fair Credit Reporting Act), a creditor may keep a derogatory remark on your credit report for 7 years from the Date of Delinquency.

If your in a low statute state (3 years), it's STILL going to be there becuase FCRA is Federal. The Statute of Limitations doesn't make it go bye-bye from your bureau.

Now look at Kentucky, where you've got a much longer statute, even though they can still pursue the debt it's gone from your bureau in those same 7 years. They can get it back on if the file suit against you and win.

 

[DollarDay]

I agree with you completely, however, the counter to that is that the CC companies made an investment and it lost. How is that any different than when someone invests in a stock and it goes belly up.

They have no problem collecting X% of these idiots, who don't know the first things about basic finance. Credit Card companies are partially liable for continuing to issue credit to people with either outstanding debt or available credit that is well-beyond their financial means of repayment.

How do people who make 30-50K, have credit cards that total 40-60K in debt made available to them.


I am not trying to justify anyones actions, I am just telling you what the counter point is to your point.

I partially agree, however, you should see the shit that hits the fan when somebody is "denied" credit because of their income, etc. They go screaming to their congressmen about "everybody should have equal access to credit, etc", and it becomes a huge headache for the banks.

Really, what is a realistic amount of credit ??? I don't know - can't answer that, other than to say an amount that can be paid back in a reasonable period of time by a reasonable person.

Problem is our society is made up of unreasonable people.

 

[festeringZit]

I agree with you completely, however, the counter to that is that the CC companies made an investment and it lost. How is that any different than when someone invests in a stock and it goes belly up.

They have no problem collecting X% of these idiots, who don't know the first things about basic finance. Credit Card companies are partially liable for continuing to issue credit to people with either outstanding debt or available credit that is well-beyond their financial means of repayment.

How do people who make 30-50K, have credit cards that total 40-60K in debt made available to them.


I am not trying to justify anyones actions, I am just telling you what the counter point is to your point.

The "investment" that the CC company makes is the promise that the
person who is loaned the money (and makes a signed contract)
will pay it back. The fact that the CC company knows that a certain
% of the people are outright fraudulent with the usage of the loan
(and others just end up honestly not being able to repay) doesn't
take away the moral obligation of the individual borrower to make good
on their signed contractual obligation to pay, especially if they have the
ability to pay. IMHO.

 

[quantumleap]

All right, all right - lot's of fallacies in this.

I own a collection agency and have been in credit & collections for 20+ years now.

#1 Do NOT file for bkty. The problem isn't your credit, the problem is doing anything else in the future where you may get asked the question "have you EVER filed for bkty". I don't know if she has any aspirations in her life but many times professional licenses can be held up. On the other hand, Colonel Sanders filed BKTY I believe 2 times before coming up with Kentucky Fried Chicken. Many successfull people have had a bkty in their past. My opinions are biased, however, being a collection agency owner - so take that into consideration.

#2 BKTY will FUCK your credit up significantly more than just a charge-off. $20k is NOT a lot of money in the grand scheme of things. In the 4.5 years I've owned my agency I have had over $2 BILLION in placements. Yes, that's BILLION. Now, we don't collect anywhere near what gets placed, but we collect enought to make some money.

#3 If you settle the accounts you WILL have fucked up credit in the short run but in about 2 years that will turn around. It is MUCH better than bkty. However, there are places that will give you a credit card RIGHT AFTER you file bkty - their reasoning is that you no longer have a lot of other debt to pay so you'll want to pay this off. It won't be a large line of credit but you can find these folks, although not nearly as easily as before the economy tanked.

#4 99% of all clients out there in collections (I'm talking about the banks and auto lenders) have SIGNIFICANTLY lowered their settlement amount - ie, the % they will take. I know that 3 of the major cc companies now are offering settlements on pre-chargeoff accounts at 20% or 30% .... yup, not even charged-off and they'll take that low of a sif.

#5 One of the worst things she can do is go to a "credit repair" place. They will fuck you up just as bad as BKTY. Here's the MO - they take a % of the amount they "save" you. Since they know that most places will take 40 cents on the dollar, they look to take half of the savings - roughly 30 cents on the dollar (1/2 of 60c savings). THEY GET PAID FIRST before they settle any accounts. YOU END UP PAYING A 70% SIF THAT YOU CAN NEGOTIATE DIRECTLY WITH THE COLLECTION AGENCY AND GET 40% !!!

#6 Statute of limitations varies by state. It can be as short as 3 years to as long as 20 years (thank you Kentucky). However, a Statute of Limitations does NOT extinguish a debt. There are very few States that have a Statute of REPOSE, which extinguishes the debt. Wisconsin, Mississippi, Louisiana (they don't even follow the UCC) and most recently North Carolina. There is a law in NY State Assembly where they're trying to get a Statute of Repose here as well. It probably won' pass because of the lobbying of the Buffalo collection agencies since there are a ton of us here who would be significantly impacted by the legislation and we are fighting that tooth and nail.

#7 I prefer to eat out at restaurants but that's neither here nor there regarding this conversation.

#8 Junk Debt Buyers WILL buy and re-sell the debt many, many times. She will most likely hear from at least 10 collection agencies for EACH account she has, provided she is not in a state with a statute of repose. The price of primary paper (just charged-off) is hovering around 6 cents on the dollar right now. The bank may or may not sell her account at charge-off but at some point in time will most likely sell it rather than having to 1099-C the account.

#9 If you Settle the account and the savings is more than $600.00, you will most likely get a 1099-C, where she will have to pay taxes on the amount of the savings, if the amount she saved is over $600.00. There is a way around having to pay that (i'll defer to the tax guys here (Willie) for real advice) but you have to create a paper trail that shows you are disputing the account because of bogus charges, fraud, etc,and that you are paying in full on the Undisputed portion of the debt. If you do this and it's not true you are committing fraud, i believe. I AM NOT RECOMMENDING YOU DO THIS ~ just giving you a possible reason for not having to pay on a 1099-C. Again, talk to Willie on that one.

#10 nhoj. Wrong. You MAY get sued even if you don't own a home, and it doesn't matter if you're in Texas or any other debtor friendly state. Keep in mind that a JDB (junk debt buyer) may buy your account, based on age, for as low as a 1/4 of a penny on the dollar. If they sue you and get a judgment, not only does that extend the statute of limitiations, it also makes the debt worth a hell of a lot more. IE - Judgments sell for anywhere from 10 cents on the dollar to 25 cents on the dollar. I know guys that buy stuff that's just on the verge of passing stats, sue the accounts then repackage them as judgments and make a FORTUNE doing it.

Lastly, PM me and I'll give you my office # to call - it's a hell of a lot easier to go over this on the phone than write about it as I'm sure you / she will have tons of questions. There's also a chance that my company could be collecting on one of her accounts. If it is #1 This communication is from a professional debt collector. #2 This is an attempt to collect a debt and any information obtained will be used for that purpose. #3 If the account is here I'll hook her up with a good settlement.

This has been my experience as well. I was unemployed and owed credit cards. I paid a certain amount each month after I got a job. I was able to buy a nice truck based upon my income.

 

[Illini]

I can't believe the moral degenerates in here.

She borrowed the money, she has the ability to work and
create income, she should pay it back.

Then we've got someone else piping in that she should run up
her credit card before she files for bankruptcy, which
is essentially stealing.

WTF... Just because you aren't looking the person in the face
that you are fucking over, doesn't mean that you aren't
reaming someone up the ass and stealing from them.


hno:

It's not as black and white as you're making it out to be. Yeah, if she were to go out and spend money now, knowing that she's going to file, then that would be stealing. I don't believe the OP mentioned how she got herself into debt, but it could have been anything from losing a job to medical expenses to irresponsible purchasing, or a combination of things.

You go to prison for stealing. Bankruptcy is legal. They are not exactly the same.

 

[funtyme007]

i know my credit is terrible I am probably in debt about 7 grand.. so I think I can fix mine...

 

[1cheater]

I was in the same shoes a while back, just negotiate down the debt and pay them off one by one; allocate a certain amount each month and keep with that allocated amount and the debt will disappear faster.