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Aggregate
Stranger
Registered: 08/03/20
Posts: 18
Last seen: 1 year, 5 months
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Bankruptcy vs settling with collectors
#27503022 - 10/13/21 11:06 AM (2 years, 3 months ago) |
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I have about 21k in debt and am being sued for about 1k for an unpaid debt. I went to a bankruptcy lawyer and they advised Chapter 13 and if I agreed I’d pay about $440 a month for about 48-60 months. That’s at least about the amount I owe and potentially even more when it’s all said and done.
After my consultation, I called the collector who has all my debts except the 1k that I’m being sued for, and they offered to settle everything I owe them for $6k.
So if I pay off the $1k I’m being sued for and the $6k, I’d be out of this debt predicament.
Am I missing something here? It seems like a good deal but what should I be aware of if I settle with this collector?
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geokills
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Registered: 05/08/01
Posts: 23,417
Loc: city of angels
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Re: Bankruptcy vs settling with collectors [Re: Aggregate] 1
#27503036 - 10/13/21 11:22 AM (2 years, 3 months ago) |
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This comes down to how much you value your credit score.
If you intend to make use of debt markets before the 2020's are spent, then getting on a payment plan to pay off your full debt is going to leave you a little more wiggle room with regard to things like buying your first home with a mortgage loan, financing a new car, etc. If you don't believe you will be in need of debt markets, for example if you are comfortable living lean and have a reliably stable income to support your lifestyle, then settling for $6+$1K is an acceptable way to ditch all the harassing letters and phone calls about your outstanding debt. You could also just pay nothing and the debt collectors will eventually leave you alone and the missed payments on your credit report will eventually drop off the radar... but I believe that takes at least 7 years from when your account was sold to a debt collections company.
Your debt collector is offering you this low pay option because they very likely purchased your debt from the original debt holder for even less money, so they will still be coming out ahead. The thing is, taking this low pay lump sum settlement option will hit your credit report with "settled for less than the full amount due". That's something lenders don't like, hence why you need to consider whether you will need to or intend to take out any loans in the foreseeable future. If you do, setting up the payment plan with the bankruptcy lawyer is probably the better bet.
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Aggregate
Stranger
Registered: 08/03/20
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Re: Bankruptcy vs settling with collectors [Re: geokills]
#27503073 - 10/13/21 11:58 AM (2 years, 3 months ago) |
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Thanks for your response. The lawsuit for $1k brought me to finally sort this out. I've been ignoring all this for awhile but the lawsuit is making me act. The party suing me had all of my debts but sold them except the one which they are suing me for.
I didn't intend on using debt markets when I decided to stop payments on my creditors and I didn't expect to have access to debt markets with bankruptcy so I'm unsure what to do. The lawyer showed me my credit score and said my credit will go up about 100 points after the bankruptcy process is over. My dilemma with approaching a debt market moving forward regardless of which route I take is that I'm still in a lot of debt because of student loans and even with a 100 point upswing on my credit report, I'm still not in an ideal credit score zone.
I don't need to take out loans in the foreseeable future. It would be amazing to own a home but with the student loan debt that I've accrued and the credit score I have, I don't know that a home is in my future anyways.
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TheFakeSunRa
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Registered: 03/01/05
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Re: Bankruptcy vs settling with collectors [Re: Aggregate]
#27503694 - 10/13/21 10:11 PM (2 years, 3 months ago) |
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Fuck 13
Wipe that shit clean with a 7
Quote:
$440 a month for about 48-60 months
Jesus Christ.

I did a 7 a few years ago. Best decision of my life. Fuck credit scores. Save. Pay in full. Build net worth. Invest.
Ain’t nobody can afford a house in this market.
Buy a cheap whip.
Student loans fucking suck.
Do you have a court date for that lawsuit or is that still in the threat phase?
Anyway fuck the 13. Pay a lawyer and put a bankruptcy on the record and STILL be beholden to make those fucked up payments … triple goddamn seriously big time fuck that
-------------------- [quote]Asante said: You constantly make posts thatr fling middle school insults at people you don't like mixed in with maladjusted psychopathic comments about wanting to beat up the other poster with a crowbar. You know how shit you are, you just don't give a fuck for precisely that reason. I disendorse you.[/quote]
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