negotiate before bk?

[InKansas]

What is the name of your state? Kansas
I'm shutting down an s-corp. but have quite a bit of credit card debt in the business name, but personally guaranteed. I'm thinking of offering to pay 50% of the debt, in lieu of ch 7 personal bk. Is there any retribution the cc companies can bring against me if I make this offer?

 

[olgethorpe]

Not an easy question. It probably depends a lot on how much debt, how many cards, and who the CC companies are. Most CCs won't even talk about settling for less until you're 180 days past due...and by then, they've hit you with penalties and interest so your settlement winds up closer to 100% of what you owe now and you've got bad marks all over your credit reports already.

The new BK laws that go into effect in October, will change things somewhat, but the way CCs are now they do kind of force you into BK. You need to remember that those people don't think the way the rest of us do. Depending on how their balance sheet looks at any particular time it may be more to their advantage to write the whole thing off (and get a tax break) then to take a percentage of what you owe.

And, just to make the decision more difficult...if you have any income at all after closing your business, the new BK laws may force you into a BK 13...in which case you will have to pay them back something.

I'd suggest you go talk with a couple BK lawyers about this...most will give you a free consultation.