• FreeAdvice has a new Terms of Service and Privacy Policy, effective May 25, 2018.
    By continuing to use this site, you are consenting to our Terms of Service and use of cookies.

Settlement Program or Bankruptcy

Accident - Bankruptcy - Criminal Law / DUI - Business - Consumer - Employment - Family - Immigration - Real Estate - Tax - Traffic - Wills   Please click a topic or scroll down for more.

T

TOOMUCHDEBT

Guest
What is the name of your state? Maryland

Please give any advice possible. I have an outstanding amount of debt. This settlement program Debt Rescue says for $300.00 a month after the service amount fee of $2100.00's broken down in installments is paid, with all of my debt I could be debt free in 23 months. This will have an adverse report on my credit report as I will be sending the $300.00's to an account of mine and as the monthly payments add up then I will write each creditor one check to pay off the debt. The other solution is bankruptcy which I don't want to persue. I do not pay a mortgage, I pay rent in an apartment.
 


bigun

Senior Member
If these are the only choices, I'd say you're better off in bk. When you settle like this, not only is your credit report dinged but, you will get a 1099C from the bank or cc company and that will be considered taxable income in the year received. In bk, there is no taxable event. Also, you don't pay $2100 in fees. On a couple of oter sites I haunt people are reporting that creditors are not playing ball te way they used to. Two people have reported being sued by the cc company before any settlement could be reached.
 
A

a neighbor

Guest
Did I read that right, $2100 service fee, what a rip-off! If you don't care about the credit issue of bad reporting, go to Consumer Credit Counseling Services. Your credit report won't look any better, but at least they won't take you for $2100! Just how much debt are you talking about?
 
A

a neighbor

Guest
1099 Question to Debt Rescue

I phoned Debt Rescue, and asked about the 1099, the question was evaded till I asked to speak to someone that could tell me. One of the Managers claimed they could NOT say that you wouldn't pay on the forgiven amount, but he didn't think so, his exact words "that would be up to you and your accountant". Can you say CLUELESS???
 
T

TOOMUCHDEBT

Guest
Debt amount about $14,800.00. If I file bankruptcy that will be on my credit report for 7-10yrs, and probably stop me from trying to purchasing a home. With the settlement program I'm out of debt in 23 months. If I file for bankruptcy do I have to list all of my debts?I have two loans that are payroll deducted and have been for two years now. I did not included that into the settlement program because thats payroll deducted. If I file for bankruptcy you are talking about a debt amount of $24000.00 not including a truck lease that term ends next December 2003. That's another $9000.00's but would I included that if I choose bankruptcy? My annually yearly salary is $36,900.00. If I choose bankruptcy can I choose which creditors to list?
 

bigun

Senior Member
If you file for bk, you must list all of your creditors. Yes, the truck lease can be included.
If you settle, the settled notation will be on your credit report for 7 years. The bk will be there for 10 years.
 
T

TOOMUCHDEBT

Guest
bigun said:
If you file for bk, you must list all of your creditors. Yes, the truck lease can be included.
If you settle, the settled notation will be on your credit report for 7 years. The bk will be there for 10 years.
In bankruptcy Chapter 13-I still will have to pay an amount to the court or trustee monthly? Also after that has been satisfied is that when I get the discharge papers? If at the end of the truck lease term next December 2003 when I turn in the truck, and if I file bankruptcy, if I don't include the truck lease in the bankruptcy will it still be hard for me to get another vehicle? My concern is I did the lease because I was upside down when I traded in my car. Being in the leasing program for 5 years at the end of the term will make me come out in the clear next year. I will not have any upside balance. When I turn in the truck thats it. If I chose to get a new vehicle I would not be carrying any balance over. If I file bankruptcy will this hurt me from getting a new car?
 

bigun

Senior Member
If you don't own a home, why fool around with a chapter 13? You want a chapter 7 and wipe out all unsecured debt and then, reaffirm the the truck.
You need to schedule a consultation with a lawyer. Most bk lawyers give free initial consultations.
 

Ladynred

Senior Member
Did these Debt Rescue people tell you that all of your accounts are going to go to near charge-off status, or maybe even charge-off before THEY pay a dime to the creditors ???

Their ususal strategy is to let your accounts get that far on purpose, totally trashing your credit in the process. Then and only then are the creditors willing to settle for less than the full amount due. On top of that, as mentioned earlier, you will most likely end up with 1099-C's from the creditors and have to pay the IRS on any amount over $600 per account settled.

IF you sign up for that outrageous fee for someone to totally trash your credit FOR you, you might as well forego the fees and let that happen all by yourself ! When you get close to charge-off they start offering settlements. Charge-offs, paid charge-offs and settlements are all pretty bad marks, and will most definitely make it difficult for you to by that house for quite a few years.

I'd have to agree, Chapter 7 sounds like a better solution, either way you're going to have at least 7 years of horrible credit.. at least the affects of bankrupty tend to lessen after 3-4 years and you can still buy a house with your 'fresh start'.
 

Find the Right Lawyer for Your Legal Issue!

Fast, Free, and Confidential
data-ad-format="auto">
Top