“Dear Steve,
My wife’s company is about to close next week… she owes $21,000 in credit cards to Direct Merchants Bank, Bank of America and Chase. Her minimum payment every moth is $655 per month. She has never been late. I was laid off in April and no work yet.
My mom had some debt with Sears and Discover for around $6,000 in 2004… she was hounded day and night for 7 months but never talked to no one and no liens were put on her home and now she has credit with Sears again in 2010.
The reason I’m mentioning this is that we met with a credit consultant and told us that she would charge us up to 25% of the total debt owed and we would be making payments of $310 for 3 years. Her 25% would be collected from the $310 payment each month with the remaining going to the credit holders.
Mom moved on with no bankruptcy or debt consolidation in 6 years… should we consider bankrupcy or credit card debt relief in the state of California?
David”
The Answer:
Dear David,
It sounds like you talked to a debt settlement company sales person. Don’t follow that approach. You don’t need to pay anyone 25% in advance fees before the debts are settled.
But based on what you’ve shared I can’t see how either credit counseling or debt settlement makes logical sense for you. It seems that the bankruptcy decision has been made for you by you both being unemployed. Entering into any payment plan based on unemployment income alone would be foolish in my book.
Before you leap to any conclusion about what will be best for you, click here to find a local bankruptcy attorney and talk your situation over with them. I think once you do you will find bankruptcy will be right for you.
Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.
If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.