[clance65]

Hi,
I am 42,and have been a successful earner in the past.I have a wife and 3 kids.I currently have 154,000 in unsecured debt.I applied [with my accountant] for financial hardship,and have received 81,000 from a 401k rollover.[I quit a good job a year ago,to start a business... failed terribly,and irresponsibly racked up these[mostly cc] balances.I am about to go back to work.The prospect of filing bankruptcy concerns me greatly.I have read many of your posts.I am a homeowner,with maybe 40-50k equity.Mortgage brokers can't seem to help here.Can I do some sort of debt settlement... as opposed to filing a ch 13,like the attorney[of course] advises me to do.He says put the $$ back in the 401k... I only have 3 weeks left to do so.Is there a way I can just stick this in my bank,and settle with these companies?. I just started not paying my credit cards this month... remember I have yet to start working... but I have to be in default for too long before I can show the courts that my pay[commission] will even support the ch 13.I just want to start tackling this,so I have peace of mind when I do go to work... Please Help!

[ScottGem]

Put the 401K money back. Contact all your creditors and explain to them what happened. Tell them you have gotten a new job and will be working to pay back your debt. See if you can get them to reduce or suspend interest on the accounts so you will be able to pay them down.

Most creditors will work with you if you give them the chance and show you sincerely want to pay.

[clance65]

Scott... no way will I be able to make these payments.I can make the 401k money back... but I would have to make double what I'm going to make,even if they reduce or suspend interest.Do you see a solution with what I have,aside from a bk??

[ScottGem]

Given your circumstances I would go for the bankruptcy. Your debt is not due from irresponsible spending.

[clance65]

154,000 is a lot... I know.I am also stating that I have 81,000 in cheques,in my possession.Rather than get into a ch.13 repayment,which the court has to approve after employment,do I have any leverage with this money to settle in lump sums?. Will a debt settlement company be of help if I started with say 40,000... then added monthly to that.I would like to use this money[even though I'm 70k short],rather than put it back,and deal with this complicated and humiliating bankruptcy... that will serve me poorly,and the creditors even worse.My future income is volatile... but if I can settle these accounts with the money I have,I like my prospects of building it back,and earning enough to pay for the house,cars,and other living expenses.

[ScottGem]

If I follow you, you have $80K in receipts from your business trhat you can use to settle the debts. If so, go for it.

[clance65]

No... from the I.R.A. rollover from my 401k.I have write off losses for the next 3 years... and the 81,000 is from the retirement account.My accountant released these to me in cheques,and applied for a ''financial hardship'' to avoid penalties.Do you think I can settle then?

[Superfed]

If you have 81,000 to pay on your debt, that still leaves you in debt 73.000
See if your creditors will take less as one lump sum. However, some creditors can be pretty demanding. They may want 80% to 90% payoff.