Which is the right option - Settlement or bankruptcy?
For some reason I cannot log on!! Here is my new question and I will post my old underneath thanks!
I spoke with an attorney about bankruptcy and the news is not good. My husband and I make over the medium income so we would have to file a chapter 13; however, based upon government figures: we should be able to pay $1000 a month towards the bk! I'd like to know how they figured that out!! So basically we lose everything, have to shut off our cable, sell/eliminate one vehicle plus pay $60,000 over the next five years. So we will end up paying our creditors in full!! If this is possible, why am I filing bk? Can anyone explain this to me?
Would debt consolidation work for us? We don't want to lose everything, pay our creditors in full but still have the bad credit hit for the next 10 years. This just doesn't make sense to me. I don't mind a sacrifice and I don't mind paying what I owe but I swear our current budget comes back negative 400 per month. Our gross incoming is $8000 over the median which is 75,000.
I know you can't tell me what to do but if this was you what would you do? Go with the bk? Honestly I'm more curious about knowing the bk alternatives. My stomach is so sick that I can't sleep. Thanks!
First Posted January 30th
I realize it is harder to file bk now than ever before, however, it's something we have tried hard to avoid, but I'm wondering if it may be a better option for us.
We have roughly 52,000 in unsecured debt. Last April we signed a contract with a debt settlement Company to handle our accounts. We have already paid them about $5,000 of the $8,000 we will be paying them. We stopped paying all of our debt last April/May and instead have been putting our monthly payment an Escrow Account, which currently holds about $1200 (the rest has gone to their fees). There were three of our accounts that we were able to send Power of Attorney Letters to and they have pretty much left us alone (until recently). However, three of our debts we had to handle differently than the rest of the accounts. I have logs and logs of calls that we have received over the past 7 months.
On January 15, 2007 I received a fed-ex package from one of our credit accounts for an Arbitration Hearing. I called our settlement company to inquire about this and they sent me paperwork and guidelines to follow, however, they basically told me I'm on my own. This account was suppose to be an "easy" settlement account; however, now it has turned into Arbitration which could end up with a judgement that would not be included in the program.
I guess, basically, I fear going through this settlement program and ending up with judgement that they "don't handle". I am tired of the endless harassment and tired of always struggling and being behind in our bills.
We have a house with no/little equity to speak of and two cars that we have a balance on which is pretty equal to the amount of the blue book value. My husband and I have decent incomes; however, our debts exceed what we bring home every month so we are always behind on something. We are going to catch up this February with our tax refund but will probably again fall behind towards the end of the year.
What do you think our best avenue is? To stick out the settlement or to file bk? We've consulted a bk attorney - she advised that we file bk. She can guarantee results. Although we make "too much" to file Chapter 7 we would have to file Chapter 13 and I have no idea what the monthly payment would be.
Thank you for your time.