Lost job and had business fail, filed Chap13 but not had hearing yet, wondering if settlement would be better/quicker route. Approx $130k unsecured debt. If settled for 50%) could borrow $50k from 401k, then use $15k bonus from next year to total $65k. Would clear creditors with 2 years. Not concerned with credit rating, nor phone calls from creditors
Should I stop Chap 13 proceedings (can I stop it?) and pursue settlement, using new 401k loan ($50k) and 2011 bonus ($15k guarenteed) to pay credit debt?
Well outside of losing an additional 30% of your retirement fund to penalties and taxes you would essentially be throwing away money already protected from creditors with this path.
Besides, if you’ve already filed bankruptcy you can’t undo it. You could cancel the bankruptcy but it’s already on your credit report. And bankruptcy gives you something debt settlement doesn’t, protection from lawsuits and collections.
If you want to get a second opinion and see if settlement makes and sense, contact Damon Day.