Author Topic: Looking for some guidance on these debts.  (Read 652 times)

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Looking for some guidance on these debts.
« on: December 05, 2017 04:12:19 PM »

I have a few debts that are over a year old at this point.  They are commercial debts and one is with TBF financial.  I haven't gotten a single call from them about the debt and the other company that I owe money to calls me often, but they never reported the debt to my credit.

I wanted to settle these accounts.  Pay for delete, is what I was going for.  My debt totals are $6,000 for one account and $11,000 for the other account.   I wanted to offer around $1,200 for the first one and about $1,700 for the second one.  Is this crazy?  I have some other debts and I do qualify for BK, but I wanted to settle if I could.  So I was thinking about offering them this and telling them the money situation and my only other option would be to use this money to file for BK.


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Re: Looking for some guidance on these debts.
« Reply #1 on: December 05, 2017 05:05:06 PM »
You can probably forget about pay for delete (PFD).

PFD only works SOME of the time, and then only if you pay 100% of the debt.  I recently offered a PFD, and was completely ignored, on a debt that is almost SOL anyway.  Go figure.

However, if you settle a debt BEFORE it is on the credit reports, you can work it out that they never report it. 

As for these commercial debts, I am assuming you are personally liable for them.  Otherwise the company could file BK without you.

The big problem is, the FDCPA doesn't apply to you.  That takes away some of your bargaining power. 

$1200 for a $6000 debt is not crazy.  I have gotten settlements that good, or better, on personal loans. 

However, just about nobody would take $1700 for a debt of $11,000.  I'm not saying it couldn't happen, but it would be extremely rare.  True, I've gotten better settlements than that, sometimes MUCH better, but only in situations where the records were really bad and/or there were a ton of violations.

The main problem with trying to settle debts on a limited budget is:  it only takes ONE creditor to refuse to settle, and the whole thing blows up. 

You also don't know for sure if any, or all, of these companies will sue. 

Realize that these companies hear "I'll file for BK" all the time.  They generally don't take you seriously unless and until you actually file. 

You have three options, and two of them could explode:

1.  Save up money to settle.  Settle with companies when they are close to suing.  Whenever you get to a point where it is the last minute, settle out of the fund. 
PROBLEM:  You could find yourself depleting the fund, then having other companies sue you.  At that point, you'd better have enough left over to file BK, or else you are worse off.  This works best if there is always enough money left for BK on top of the settlement offer. 

2.  Figure out how much you can afford to pay, and over what period of time.  Contact all of your debtors, and give them the offer that if ALL of them accept xx% over y months or years, then you will settle all the debts at once.  Otherwise, you file for BK. 
PROBLEM:  If even ONE of your creditors declines, this won't work.

3.  Similar to #1.  Save up enough money to file for BK.  Put that aside.  Wait until you are sued.  Then, file for BK.  That way if nobody sues you, you won't need to file BK.  The first lawsuit, you file. 
PROBLEM:  This almost always leads to BK. 


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Re: Looking for some guidance on these debts.
« Reply #2 on: December 05, 2017 05:52:03 PM »
Thanks for the response!

I figured I would be hard pressed on trying to get these guys to PFD.  My biggest concern is my credit score.  It's in the 400's right now and I wanted to work on repairing that.  I figured if I filed BK it would be worse than trying to settle the accounts.

In your experience, is it better to file BK or settle with the creditors and have that marked on your credit?


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Re: Looking for some guidance on these debts.
« Reply #3 on: December 05, 2017 06:04:26 PM »
If your credit score is in the 400's I would say that is the LEAST of your problems. A bunch of lawsuits would be the problem. I agree with Broke Bob, especially the options he lists. With a credit score in the 400's, even BK won't cause much of a hit because you really have very little way to go down.
BTW-the Flyingifr Method does work. (quoted from Hannah on Infinite Credit, September 19, 2006)

I think of a telephone as a Debt Collector's crowbar. With such a device it is possible to pry one's mouth open wide enough to allow the insertion of a foot or two.

Debtors Exams are the perfect place for us Senior Citizens to show off our recently acquired Alzheimers.

Founder of the Credit Terrorist Training Camp (Debtorboards)


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Re: Looking for some guidance on these debts.
« Reply #4 on: December 05, 2017 06:38:41 PM »
Thanks for the reply!

I was thinking that offering to settle would be better than having a BK on my credit file.  I know that your late payments don't go away from a BK. 

I was thinking about paying in total $4-5 total between the two creditors.  1200 for one and rest going to the other creditor.  Do I have any shot at this?  If they don't accept that, I will just file BK.


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Re: Looking for some guidance on these debts.
« Reply #5 on: December 05, 2017 09:20:04 PM »
Strange as it may seem, your credit rating would go up faster after BK than before.

The reason:

Delinquent accounts hurt your credit rating.  With BK they are wiped out.

Also, you can't file BK again for another 8 years, so credit card companies are MUCH more likely to give credit cards to someone with a discharged BK than they are to someone with bad debts hanging over his head. 

So your credit rating is the least of your problems. 

If those are the ONLY two creditors, maybe it would work, and maybe it wouldn't.   There is only one way to find out.

I must mention, you need to get the negotiations done with those creditors simultaneously.  Make sure you don't pull the trigger unless BOTH of them accept. 

That might not be a bad strategy.  It would show the debts as paid off for less than the total on your CR.  This would be a noticeable ding until 7 years after the default, but it would probably be easier than BK. 

That way you could keep BK as an option if you have some serious medical expenses in the next 8 years.