I had about $47K in credit card debt and then lost my job and was sick and in a hospital. I was planning on filing bk, but due to the knew bk laws, I was unable to file bankruptcy. I was out of a job for about a year, and used any income I made to live on while I searched for a new job (which was difficult due to my bad credit).
I finally have a job and have saved some money, but I don’t feel real stable in the job due to the economy and need to try and preserve enough cash as possible in case I lose it and am unable to find another job (due to a resume with gaps and bad credit). My biggest debt was with Amex for about $27K and they have sent me several offers to give me an Optima card if I pay in full and a law firm offered a settlement for about $16K (but in this settlement they mentioned that it would be better to pay the full $27K as that will stop future collection efforts for the remaining balance….this left me a bit confused as to whether this was an actual settlement).
If I pay Amex it would wipe me out, and I still have about $20K in debt from other creditors who may come after me.
I occasionally get offers from some of the other creditors/collectors for settlements…can I just pay off of these and keep their letters as support that the debt was paid in full?
If I get eventually taken to court and get a judgement against me does it really make my credit even worse, even though I already have multiple charge offs? If I cleaned out my bank account and kept my cash (to live on) in my mattress does a judgement really hurt me? If I continue to not pay after a judgement was made, what happens? Since I live in Texas they cannot garnish my wages.
Do I try and wait out the statute of limitations? Or does this make me getting sued more probable?
Ultimately, I would love to get a stable job, and pay all these debts off, but I don’t want to wipe out all my cash trying to pay off half of them and end up homeless either.
Thanks for any help.
So much of your situation is based on the law of Texas where you live. I would urge you to find a lawyer, make an appointment with a lawyer licensed in Texas and go in to speak to them and get specific answers to your legal questions.
Regarding the debt settlement statement made by the collection agency, I think what they were trying to say is that it is getting to be a problem with creditors agreeing to settle a debt and then coming back years latter and claiming they didn’t and instead only got a partial payment.
This can be remedied by getting a letter from the original creditor stating the settlement deal and keeping a copy of the letter and proof of payment with your other important papers so when this issue surfaces in the future, you will have the documentation to resolve it.