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Debt Relief – Insolvency – Bankruptcy Information » Bankruptcy Help » options other than bankruptcy for judgment on credit card debt?

options other than bankruptcy for judgment on credit card debt?

12,000.00 owed for credit card 10,000.00 is interest alone collection agency will not settle for less than half. I need some good advice I don’t have 6,000.00 anyone have the same issue with a real solution?


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4 Responses to "options other than bankruptcy for judgment on credit card debt?"

  1. someone says:
    Go to court and hope the judge is agreeable to something you can afford but you end up paying the 3k court costs.
  2. Molok says:
    You may be able to retain a bankruptcy attorney, yet not file for bankruptcy. When the collection agency calls you, you can refer them to your lawyer. You can instruct the lawyer to not file the actual bankrutpcy petition until you tell them to, and also tell them that thay may negotiate with the credit agency. If you would be required to pay much less in bankruptcy than what they would get by negotiating with you prior to the filing they may settle for some reasonable fraction of what you have on hand in cash.

    The lawyer may explain to them what they’d get in a bankruptcy procedure and offer them the same amount now, or slightly more. Both parties would benefit from this; you would both be avoiding the expense of court procedures, you would avoid the negative consequences of formal bankruptcy while settling for much less than they are demanind now, and they would get the same amount or more than they would if you proceeded with bankruptcy.

    if you know what percentage of the receivables the collection agency most likely paid to buy your debt from the original creditor you will have a good estimate of what they are actually willing to settle for in order to break even.

    These maneuvers of offering to settle a matter under threat of bankruptcy are sometimes referred to as “Greenmail” or “Debt Greenmail”.

    Another tactic might be to file bankruptcy but withdraw the filing if they’ll settle before the matter goes to court.

    A final idea which may not be ethical is to hold your bankruptcy filing in suspension with the lawyer until the statute of limitation on collection of debt in your state expires. In some states if a debt is uncollectable after 4 years it is no longer collectable. A statute of limitation of 10 years applies to federal income tax.

    An even more dubious idea would be to offer to pay a bankruptcy attorney half of their fee in advance and the other half before they actually file your papers without telling them that you never intend to actually file, then referring the collection agency to them. The collection agency will then be in limbo, waiting for the filing number, and may just sit there until the statute of limitations runs out. Your lawyer will probably refuse to take their calls after they realize that you have flaked on the filing, Yet they won’t tell the creditor why they are refusing the calls. The collection agency probably has no procedure for dealing with this situation and the statute of limitations may elapse before they take any action to collect.

    The downside of statute of limitations is that if you acquire any assets or money during the 4 years and the collection agency learns of it they can get a lien on the assets pursuant to the civil judgement.

    I’m obviously not a lawyer, so you’ll have to investigate the feasibility and ethics of any of these ideas yourself.

    Some or of these ideas may not work in certain jurisdictions.

    You may also want to take a course at a community college or with a nonprofit credit repair organization in debt management or credit repair. They will have suggestions that are known to be reasonable and successful in your specific legal and financial context.

  3. just call me Buzz says:
    Change your phone number and just ignore it. It will get “written off” eventually and they will stop calling.

    This however, will hurt your credit for 10 years.

    unlike bankruptcy, which will be “ON YOUR CREDIT” for 10 years, but your credit won’t be screwed up for the whole 10. you are allowed to rebuild with a past BK…with a charge off, no one will give you credit.

  4. Moe J says:
    Do you have assets that _can_ be “attached” by the debt collectors?

    If your balance sheet (assets -v- liabilities) shows that you are insolvent (have _nothing_ that can be attached by your creditors) then perhaps you could write to each of them with a copy of your balance sheet, telling them that you’re absolutely broke & prove it. Would be good to involve an accountant for this just to lend some weight to it. Also, if you do this, DON’T under any circumstances begin paying off any of this debt – the statute of limitations will begin running all over again and you’ll have that much longer to be dunned by collectors for that much more money.
    If you do this, also send each creditor a letter asking them to stop contacting you about this debt; this is called a “Cease & Desist” notifice and will (should) keep them from contacting you again. You’re protectyed under the law, I believe, from being contacted again. They will probably continue to send you monthly statements with added interest & fees – DON’T PAY THEM. I’m neither a lawyer nor an accountant, but this seems to be an alternative to bankruptcy if you are truly dirt poor. (No judgment is implied here)

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