How to get out of credit card debt with out filing for bankruptcy,nor do I wish to use debt counseling.?

I have 4 credit cards that I have been paying (it seems forever) I am currently on a debt counceling progam. I”m current. The problem that I am now face with is a reduced income. I am retired. My 401K took a big hit. I will no longer be able to pay the 3.00 monthly payments.
Had A family meeting with kids. They will (for xmas) give me ,000.00 to help pay the debt. The balance is ,000.00. I would like to do a settelment. Best way to proceed.

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I have a huge debt of 24,400 if i was to get a loan to pay it all instead of filing for bankruptcy.? I have a huge debt of 24,400 if i was...

Thu, May 14, 2009

Credit Card Debts

401k, Credit Card Debt, Credit Cards, Credit Debt, Current, Debt Counceling, Debt Counseling, Face, Family Meeting, Filing Bankruptcy, Filing For Bankruptcy, How To Get Out Of Credit Card Debt, Settelment, Xmas

Tags: 401k, Credit Card Debt, Credit Cards, Credit Debt, Current, Debt Counceling, Debt Counseling, Face, Family Meeting, Filing Bankruptcy, Filing For Bankruptcy, How To Get Out Of Credit Card Debt, Settelment, Xmas

One Response to “How to get out of credit card debt with out filing for bankruptcy,nor do I wish to use debt counseling.?”

OC1999 Says:
May 14th, 2009 at 4:49 pm

Creditors will not accept settlement offers if you are current. So you will have to stop paying on your bills for a couple of months before they will even consider any settlements. Even at that point a 50% settlement is not likely right away, you may only get 60%-75%. By the time they accept 50% with all of the fees and additional interest it will probably be the same amount as the 60% is now. The other little known factor is that you must claim the settlement amount on your taxes as unearned income. So if you did get them all to settle for $11,000, you need to declare the other $11,000 as unearned income. The amount would depends on your tax bracket and even at the highest bracket it is still cheaper than having to pay the entire thing. But if you fail to pay this the IRS can hit you with additional penalties and interest.

As an alternative try and see how many of your bills can be “paid off” with the 11K. That should reduce your monthly payment by about 1/2. If so think if you can afford the approx $500 a month to remain on the program?

As a final alternative there is Bankruptcy. So before you pay off any of the debts really think if you will be able to pay the remaining balance. Because once you pay the creditor the money you don’t get it back in BK. What you don’t want to happen is pay the creditors the 11K, and still file bankruptcy.

OC1999 Says:
May 14th, 2009 at 4:49 pm
Creditors will not accept settlement offers if you are current. So you will have to stop paying on your bills for a couple of months before they will even consider any settlements. Even at that point a 50% settlement is not likely right away, you may only get 60%-75%. By the time they accept 50% with all of the fees and additional interest it will probably be the same amount as the 60% is now. The other little known factor is that you must claim the settlement amount on your taxes as unearned income. So if you did get them all to settle for $11,000, you need to declare the other $11,000 as unearned income. The amount would depends on your tax bracket and even at the highest bracket it is still cheaper than having to pay the entire thing. But if you fail to pay this the IRS can hit you with additional penalties and interest.

As an alternative try and see how many of your bills can be “paid off” with the 11K. That should reduce your monthly payment by about 1/2. If so think if you can afford the approx $500 a month to remain on the program?

As a final alternative there is Bankruptcy. So before you pay off any of the debts really think if you will be able to pay the remaining balance. Because once you pay the creditor the money you don’t get it back in BK. What you don’t want to happen is pay the creditors the 11K, and still file bankruptcy.