Bankruptcy is Out of The Question and We Want to Pursue Debt Settlements. – Sandy

“Dear Steve,

DROWNING in CC DEBT! To give backround we have been looking at many options including Bankrutpcy even though we have not consulted an attorney yet and from what we read we make too much for Chapter 7 and 13 would be impossible since we owe 100,000 in CC and in Chapter 13 he has to be paid back in 5 years.

We are current on all payments but we know we are running out of time and have to do something now because we live pay check to pay check and no more savings. We have been reading that people have stopped paying all their payments to force a settlement and they have been able to also get in writting that the CC companies remove all negative remarks from their credit reports as part of settlements.

So the question we have is…. Should we stop paying on one card to force a settlement while keeping all others current. Then once we settle with one company we would pick another card and do the same etc and so on. We thought we could avoid bankruptcy this way and still show balances paid and over time build back credit rather then have bankruptcy on record for 10 years.

The fear I have is we will only have enough money to settle one at a time. I’m so confused…..


Dear Sandy,

The confusion and uncertainty what to do is natural and normal. It is an overwhelming situation and there are many people involved here with both you and your creditors.

Trying to decide on what to do can be confusing especially when you call debt relief companies and the sales people are trying hard to sell you their product and meet their commission quotas.

How about this approach? It seems that what you really need now is good advice and factual data in order to make a decision on how to deal with this that is right for you.

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First, let me tell you that the statements of being able to write the credit reporting agencies and get negative but accurate information removed, are false. And if you decide to pursue bankruptcy or debt settlement there will be a lasting negative mark on your credit report. In fact a Chapter 13 bankruptcy, where you would only repay a part of your debt, will be reported for seven years just like a delinquent debt in a debt settlement approach.

But the good news is that you can rebuild your credit following either strategy. Bad credit is not a life sentence.

For me what this comes down to is the reasonable expectation that based on your specific situation you would be able to settle your debts fast enough to avoid being sued, having a judgment issued and having your wages garnish, or worse.

I know from your question that time is of the essence but rather than leap at a last minute solution I really need for you to do some homework.

Before you make any decision about what to do I would suggest that you not guess what bankruptcy would mean for you, but click here to talk to a local bankruptcy attorney and get the facts.

Additionally I think you would greatly benefit from talking to Damon Day (follow the link) and allow him to spend some time with you over the phone, evaluating your situation at length, and giving you an independent assessment of your situation and the path he suggests. If you give him permission he can discuss your situation with me and I’ll confer with him.

What do you think, does it make sense to take a deep breath and follow this approach?

Please update me on your progress by

You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

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Steve Rhode

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