Have your 25% ready when they mail or fax a settlement offer, have it reviewed by a lawyer to make sure the remainder of the debt cannot be sold or assigned to a collector. You will then owe taxes on the forgiven balance.

Have your 25% ready when they mail or fax a settlement offer, have it reviewed by a lawyer to make sure the remainder of the debt cannot be sold or assigned to a collector. You will then owe taxes on the forgiven balance.

thanks

Thanks for the comment.

I think the difference her is that you are applying emotion to a situation that your creditors only apply profit potential.

I certainly understand the issues of keeping your promises and doing the moral thing. But at what cost? How much do you need to punish yourself and do you have a greater responsibility to fix the past, or the future?

One critical point people don’t see is that you can still go bankrupt and do the right thing. There is nothing to prevent you from repaying your debts after bankruptcy. Bankruptcy gives you options that credit counseling never will. It gives you an immediate fresh start, the protection of law, and the opportunity to build a safer financial life now, not six years from now.

You can go bankrupt without credit counseling.

In bankruptcy your IRA is protected from creditors.

Here is an interesting previous post for you to read. “If Bankruptcy is Immoral and Against Religion or God Then Why Did the Jesuit Priests of Oregon Just File Bankruptcy?”

If you instead applied the same detached business logic to your situation you would come to the conclusion that bankruptcy offers you the most protection and the ability to meet your emotional needs.

Do me this one favor, please. Find a local bankruptcy attorney you like. Make an appointment and go in and meet face-to-face. After talking with Novadebt and a bankruptcy attorney you will be better informed to make a decision that is right for you.

Big hug.

Steve

P.S. Here is an excellent post from a bankruptcy attorney who is also a minister. You should read it.

I get that the banks involved are operating in their best interest in the areas of credit counseling, but that doesn’t really surprise me (and I don’t totally blame them — if I were to lend someone money and they were to struggle with payments, I might not be inclined to go out of my way to suggest bankruptcy).

I realize that bankruptcy and lump sum payments are options, but I also still feel an obligation to “keep my word” (even if this was a deal with the devil). Going with the credit counseling service sounds like the best way to do that.

Am I missing something? I have about $125,000 in credit card debt and although I currently have no lates, I’m probably 60-90 days away from a LOT of lates (and the subsequent snowball effect of fees, etc.) due to a loss of a huge portion of my work (self-employed). I’m super-super-super-stressed and want to do the most moral, but realistic thing. Shouldn’t I try to do the consumber counseling with Novadebt, et al first? I thought that was required before you can do bankruptcy anyways (I’m in California).

I did just get a modification on my mortgage that brings it to a realtively realistic level (for where I live in California at least!) so I’d like to keep my house for my family, even if my credit is shot for a while.

Also, I have about $35,000 in IRAs. Will those be liquidated with credit counseling and/or bankruptcy.

Thanks so much for the free advice!

I applaud you for bringing this ‘contorvesial’ subject of CCS to the foreefront.

One item that your article did not mention is the percentage of people who go to CCS for help but are turned away for one reason or another.

Courtney Kostelecky
Founder DebtFreeNews.com