setteling a debt...

[71ELCO]

What are the steps to doing this? I keep hearing different things from different people.

Under what circumstances (or at what point) can an agency garnish your wages or put a lien on your bank account?

Pros and cons of settling rather than dragging it out over the next several years making payments (assuming I can even afford them).


How long does this stay on my credit report and are there different 'terms' used depending on how it is settled?

Basically owe $$ to a few credit card companies. I had a small business for a while and got stuck and had to put alot of things on cards. Biggest mistake I have ever made. Closed the doors on the business and was making payments for a while. It has gotten to the point where I cannot make payments on a regular basis.

Was thinking bankruptcy, but would like to somehow settle things out to keep from doing that. Not sure if it is gonna be just as bad or not. I dont have extra money laying around or I wouldnt be in this situation in the first place. Sold my 'extra' truck and am just making rent/food/etc. Dont have cable or land line right now either so its not like I am spending money on things I dont need.

I cant afford to have my wages garnished or make huge payments every month.

My credit is already all screwed up I am sure. It was perfect before I did the business thing and now it has all gone to crap.

Any advice is greatly appreciated.

[Debt Guy]

Q. Under what circumstances (or at what point) can an agency garnish your wages or put a lien on your bank account?

A. These things can happen only after you have been sued and the creditor awarded a judgment. Guidelines are different in different states. You did not indicate your state so I can't offer much more guidance.

Q. Pros and cons of settling rather than dragging it out over the next several years making payments (assuming I can even afford them).

A. As a rule of thumb, it is cheaper to settle the debt. But, you must come up with the cash in a lump sum. If that is a bridge too far, then you will need to enter into some sort of payment agreement in order to avoid the litigation/judgment scenario.

Q. How long does this stay on my credit report and are there different 'terms' used depending on how it is settled?

A. Negative items may no be on your credit longer than 7 1/2 years after default -- in other words, the date that you first failed to make a payment after which the account was never current. The date you settled the account means nothing.

Q. Was thinking bankruptcy, but would like to somehow settle things out to keep from doing that.

A. You need to speak with a bankruptcy attorney. Initial consultations are almost always free.

Q. I cant afford to have my wages garnished or make huge payments every month.

A. Assuming your state allows a garnishment it will happen eventually. A settlement, payment plan or bankruptcy will all prevent the garnishment.