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    goldie_9256's Avatar
    goldie_9256 Posts: 24, Reputation: 1
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    #1

    Jun 19, 2008, 02:06 PM
    Inheritance or bankruptcy
    This is my dilemma.. I am $64,000 in credit card debt. I cannot pay any of my creditors. We have considered bankruptcy, however, now I am due to collect some inheritance of about $22,000. If I take the money, I cannot file bankruptcy for 1 year and 1 day and if I do file bankruptcy.. we will have to turn the $22,000 over to the trustee of the courts. I know we only qualify for chapter 13. We do not qualify for Chapter 7. I understand that the money needs to go to my creditors, however, I want to keep some and pay the rest towards debt.. the first paying off 1 of our cars. But.. since I can't pay all my creditors, I am stuck... either way, eventually we will have to file as I don't see a way out of the $64,000 credit card debt--but can we wait 1 year and 1 day... or will the garnishments/lawsuits occur before then.? If so... I will be screwed because I won't have the money from my inheritance to pay it back. I also heard that they can go back to whom you paid with the money and ask for it back... so if I pay $14,000 towards the car to pay it off.. they can go back to that creditor and get the $14,000 back... Plus, I don't mean to be greedy, :), but I would like to keep some of the money to pay for a few home improvements. One attorney's office indicated we can keep about 20% of the inheritance.. so they thought... The attorney's won't give you any guidance as to what to do and I understand.. but I am torn as to what to do... file, don't file, wait the year.. see what happens, deal with calls... I just would like another's perspective. Any thoughts?
    N0help4u's Avatar
    N0help4u Posts: 19,823, Reputation: 2035
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    #2

    Jun 19, 2008, 02:09 PM
    Have they taken you to court and gotten a judgment yet or are they still in the harassing you stage? Have you been making payments?
    goldie_9256's Avatar
    goldie_9256 Posts: 24, Reputation: 1
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    #3

    Jun 19, 2008, 02:37 PM
    Just harassing at this point. I am only just at 30 days late on some of them.. the rest, maybe just a week or so late.
    N0help4u's Avatar
    N0help4u Posts: 19,823, Reputation: 2035
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    #4

    Jun 19, 2008, 03:00 PM
    If you don't have any judgments and are making your payments I don't see why they would demand payment in full. I don't know how that works. I wouldn't file bankruptcy and then
    If they do not take the inheritance off you maybe you could make a large payment on each debt when you get it and then double the monthly payments you are paying now.
    TheCleaner's Avatar
    TheCleaner Posts: 152, Reputation: 3
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    #5

    Jun 23, 2008, 04:41 PM
    I would take those 22Ks in cash and put them in a safe deposit box, then you can pay your car and negotiate with your creditors having a little leverage and probably do also part of those home proyects, keep in mind that your creditors do not want to sue you if they see a way to reduce their looses, if you own 60+ Ks you'll need those 22,000 and more even if you finally manage to settle it off for 40, 50 or 60% get every agreement in writing before you pay, count for your plans with the money you will make over the next two or three years and spread your payments over time, cut expenses, ovbiusly you've been expending more than you make, now is time to put some of your income aside to pay back.
    I'll bet your wife and kids ain't going to like it :), I been there is not so horrible you get used to live without credit and at the same time you learn some very healthy financial habits, very useful once you have good credit again.

    Carl.-
    goldie_9256's Avatar
    goldie_9256 Posts: 24, Reputation: 1
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    #6

    Jun 24, 2008, 06:04 PM
    After talking and listening to several folks.. we have decided to NOT file bankruptcy and take the money and settle. I talked to a Debt settlement company and they indicated some of my creditors will settle for 15-20%. If I can get most to settle for 30% or less, then I should be OK with taking all the money to apply to credit cards. Whatever does not get settled, I will have to deal with. We WILL NOT be using credit cards for a long time.. and in addition, you are correct, we have to make some financial changes. Right now.. I have a nice home, cars are OK and I can make the required bills (although gas prices are killing me). We don't really NEED anything. I don't need credit, nor do I want it. I am setting a little aside for emergeny funds... the rest gets divided up. I do have another question.. what do we tell creditors when they call... I would love a script of what to say. Most of the time, we don't answer, but sometimes, my kids pick up the phone by mistake. I am waiting for correspondence in the mail before I begin sending my settlement letters. In addition, I have been told that most won't settle until they sell off the debt to a collection agency. We are not at that point.. so I am waiting. The inheritance will be held for me by the executor of the estate until I need it for the settlements.. If I receive it too soon, I am afraid it will go to unnecessary spending. We are trying to be very smart about this. So.. any suggestions on what to tell creditors when they call??
    KCDave's Avatar
    KCDave Posts: 61, Reputation: 5
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    #7

    Jun 25, 2008, 09:17 AM
    I'd be selling those cars and cutting up those cards is way over due.
    TheCleaner's Avatar
    TheCleaner Posts: 152, Reputation: 3
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    #8

    Jun 25, 2008, 06:27 PM
    It takes at least 5 or almost 6 months without paying before they even want to talk about settlements, right before they charge the debt off (6 months by law) is the best moment to make your offer, maybe you can start offering 30% but be ready to pay at least 50, keep in mind that they can sell the account to a collection agency for at least 30 or even 40% plus they take maybe another 10% in tax cuts after the charge off.
    About the calling thing at thie early stages I wouldn't talk to them, let them see that the harassment does not work and you are in control, when ready to offer you call them, make your offer over the phone to see their reaction but don't pay over the phone, not even a "good faith payment" for $20, just tell them that you'll send it in writing and you expect to have a written agreement before any payments are made. Even if they reject your offer over the phone send it anyway, cretified mail and keep copies for your records, it might be useful in court if somebody sue you.

    Capital one colectors use to be the hardest to deal with, they don't sell accounts to hird party collectors, they use all kinds of dirty tricks but finally all comes down to a money thing, if they see that they will not get more money suing you than aceppting you offer they will back off

    When one of my kids picked up the phone I just answered and tell them anything... like in a very deep and rought voice kind of drunk and with my unique accent "Sorry sir Mr. Doe is not here I'm just the baby sitter, can I take a message?"

    Or kind of rude

    Miss and Mr. Doe had a big fight an hour ago and they are now down the police station or maybe at the hospital I'm not sure, I'm the next door neighbor watching the kids and trying to clean up the mess, who in the hell are you?

    Some even leave a message and a phone number to call back when they get out of jail, I managed to make some fun out of a bad situation.


    The idea behind this was to harass them back, make them wish me to go away, put my name and number with a big red flag in their computers, worhtless calling, a dead beat, drunk, criminal records, no job, no money, so if I finally can offer them something they will pay attention, somehow it worked, didn't pay a penny, didn't get sued by the original creditors only a junk deb buyer 3 and a half years latter, they didn't stand a chance in court.

    I quit my job just in case and became an independent contractor to realize that I was making way more money that way, two years after that I started a company and started making very good money but then it was no worth it to pay anybody, they were all junk debt buyers, the SOL had passed and I just cleaned up the credit reports using disputes an debt validation.

    Carl.-

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