Babcruptcy vs payoff how do some do it?

[Mickey527]

I was wondering how some people talk their credit card companies into the pennies on a dollar deal that I read about here.
I have a friend who has been through the ringer in the past two years. They were doing well, then the husband got laid off. She still works as a nurse. A few months after being laid off the husband was diagnosed with cancer, went through treatments but passed away a few months ago. They were using their charge cards to pay the $200 deductable for each chemo treatment, and for food and other necessary debts like utilities. She paid the mortgage with her income.
Now she is alone with a house she can't afford, three kids and many debts.
Sher doesn't want to file bancruptcy but has started the process. She saw a lawyer last week who said she has no choice but to do bancruptcy and forclosure on her house.
She called the credit card companies to try and talk them down and accept a smaller amount. She owes approx $11,000 and they will close the accounts for $8,000 which she can't afford. So bancruptcy is her only choice right now but she is afraid of what she will have to deal with after. She is looking to forclose the house but even finding an apt. right now with a bancruptcy history will be tough since the landlords look at your credit history.
I read about people on these boards talking their credit companies into accepting pennies on the dollar. How can that be done?
I would love to help her because she was there for me when I was going through cancer treatments but I am on disability and have no extra income. I do watch her kids when I can but wish I had some good thing for her to try.

 

[ArielsMommy]

I was wondering how some people talk their credit card companies into the pennies on a dollar deal that I read about here.
I have a friend who has been through the ringer in the past two years. They were doing well, then the husband got laid off. She still works as a nurse. A few months after being laid off the husband was diagnosed with cancer, went through treatments but passed away a few months ago. They were using their charge cards to pay the $200 deductable for each chemo treatment, and for food and other necessary debts like utilities. She paid the mortgage with her income.
Now she is alone with a house she can't afford, three kids and many debts.
Sher doesn't want to file bancruptcy but has started the process. She saw a lawyer last week who said she has no choice but to do bancruptcy and forclosure on her house.
She called the credit card companies to try and talk them down and accept a smaller amount. She owes approx $11,000 and they will close the accounts for $8,000 which she can't afford. So bancruptcy is her only choice right now but she is afraid of what she will have to deal with after. She is looking to forclose the house but even finding an apt. right now with a bancruptcy history will be tough since the landlords look at your credit history.
I read about people on these boards talking their credit companies into accepting pennies on the dollar. How can that be done?
I would love to help her because she was there for me when I was going through cancer treatments but I am on disability and have no extra income. I do watch her kids when I can but wish I had some good thing for her to try.

Do not let them foreclose on her house. She is so much better off including it in her bankruptcy and just handing it over to the bank now. In my opinion, it is better for her credit to have a bankruptcy than to have a bankruptcy and a foreclosure.

I wish her all the best of luck.

 

[princessfionasmom]

She should try getting her mortgage modified. Check out creditboards dot com. There is a lot of good advice there. I feel for her, my DH was diagnoses with leukemia and was given six months to live unless he had a bone marrow transplant. We were VERY fortunate to find a donor (angel) and he's doing well. But the medical bills are enormous. I am so fortunate to have such an amazing support group of friends who organized a fundraiser to help with the medical bills and they raises enough money to pay our bills so far and help with our other bills. DH is out of work for a year so money is ULTRA tight. Does she have any friends who may be able to organize something for her to raise $$? Also, from what I've read on creditboards, you never accept the first offer from the cc company, tell her to hold off, they'll come down. I spent a lot of time in there because when DH was first diagnosed I thought we were going to loose everything but so far we are doing ok. I wish her good luck and I hope it all works out for her.

 

[HeatherC]

How many years are left on her mortgage? Maybe she could refinance to a thirty or now even forty year and it would lower her payments to free up some cash each month to pay down the credit cards.

If she were able to do this, maybe she could do a cash out refinance and include the $11,000 in her new mortgage. Payments may be less and credit cards get paid off.
Then in a year or two she could sell the house without having had to do bankruptcy.

So sorry to hear this. Cannot imagine the stress she must be under.

 

[PatsMom]

I would suggest that she deal with a reputable credit management agency that can help her negotiate with the creditors and work out a payment plan. These are not the people who advertise settling your credit card debt for pennies on the dollar but they are companies who help work out interest rate reductions, reduced payments, maybe even some debt consolidation. They should offer a free initial meeting that will review her situation.

It is probably too late but she should look into whether or not the hospital her husband did the chemo at has some type of assistance plan. With a deductible like that (sounds like a co-insurance payment) they sometimes can help you out.

 

[AmandaRG]

As for the credit cards, she would need to stop paying on them for months prior to getting them to accept a much lower lump sum. That is the other part of it, they will reduce it but it usually has to be a lump sum, not payments.

I'm so sorry for your friend. I hope that things improve for her soon.

 

[ccgirl]

I was wondering how some people talk their credit card companies into the pennies on a dollar deal that I read about here.
I have a friend who has been through the ringer in the past two years. They were doing well, then the husband got laid off. She still works as a nurse. A few months after being laid off the husband was diagnosed with cancer, went through treatments but passed away a few months ago. They were using their charge cards to pay the $200 deductable for each chemo treatment, and for food and other necessary debts like utilities. She paid the mortgage with her income.
Now she is alone with a house she can't afford, three kids and many debts.
Sher doesn't want to file bancruptcy but has started the process. She saw a lawyer last week who said she has no choice but to do bancruptcy and forclosure on her house.
She called the credit card companies to try and talk them down and accept a smaller amount. She owes approx $11,000 and they will close the accounts for $8,000 which she can't afford. So bancruptcy is her only choice right now but she is afraid of what she will have to deal with after. She is looking to forclose the house but even finding an apt. right now with a bancruptcy history will be tough since the landlords look at your credit history.
I read about people on these boards talking their credit companies into accepting pennies on the dollar. How can that be done?
I would love to help her because she was there for me when I was going through cancer treatments but I am on disability and have no extra income. I do watch her kids when I can but wish I had some good thing for her to try.

Oh my goodness, what an awful thing to go through. Is there any life insurance coming? Does she have an equity in the house? You say she can't really afford the house so I would sell it. Pay off the debts with the proceeds and move into a much smaller place. I would try to stay out of foreclosure if possible. How old are her children? Does she have any old gld? Gold is extremely high right now. $11,000 is really not that much in credit card debt compared to some others. Did they have a second vehicle that she can sell? What about a fundraiser? A lot of times when families lose a husband/wife they will have fundraisers for the family to help with their leftover medical costs etc. Best of wishes to her!

 

[Mickey527]

thanks for all the good advice. I am going to see if someone she works with at the hospital might help with a fund raiser. I think that might help her get a bit back on her feet until she can sell the house. Good ideas, I will go over them with her this weekend.

 

[Poohs Pal]

With the death of thier father would the children qualify for social security. This would greatly help her make ends met and take some of the pressure off while dealing with bancruptcy. Susan

 

[bsusanmb]

I would suggest going to apprisen.com
They are the old Consumer Credit Counseling Services. They will look at all her debt and they can help her to decide if she has no alternative but to file for bankruptcy. They will deal directly with the cc companies for her, negotiate a payment plan. She can decide to accept that or not. They are very nice, have been in business for many many years and are wonderful.
I had 47000 debt in cc and unsecured loans. They made this affordable for me and I am now down to 8,000. I didn't think I could ever pay off the debt, but with their help I did.
I hope that your friend is able to save her house, and that somewhere in this world an angel will help her deal with the medical debts. My medical debts were negotiated to $10 a month. It's all I could afford, but they are paid off now.

 

[Disney-Kim]

I am not sure of all the details of her situation but she can declare bankruptcy and keep her house. she doesn't have to foreclose if she doesn't want to.

well...I should say if the court approves it....if the payment is insane compared to her income...they may not.

 

[BellePrincessBelle]

I see you're in CT if she is also she can file BK, include the house but keep it on a stay and pay. They can't force foreclosure or deed in leiu. She is allowed to keep it in CT. As long as she stays current on the house she'll be good but if circumstances change she can walk with no recourse from the bank.

 

[Ciciwoowoo]

I learned this through my brother

The ONLY way to get a bank, credit card, etc, to talk to you is to STOP PAYING

If you are current, they won't budge.

 

[seashoreCM]

To force a creditor to do something it does not want to do you must be prepared to declare bankruptcy. Not to say that you must actually go through with bankruptcy.

It is possible for a mortgage lender to restructure the entire loan (such as add an interest rate cap) rather than face "taking back" the property as part of the bankruptcy proceedings. Each instance is treated as an individual situation by the lender. In practice the mortgage loan survives the bankruptcy and you can't go bankrupt again for 7 years or so.

 

[BellePrincessBelle]

To force a creditor to do something it does not want to do you must be prepared to declare bankruptcy. Not to say that you must actually go through with bankruptcy.

It is possible for a mortgage lender to restructure the entire loan (such as add an interest rate cap) rather than face "taking back" the property as part of the bankruptcy proceedings. Each instance is treated as an individual situation by the lender. In practice the mortgage loan survives the bankruptcy and you can't go bankrupt again for 7 years or so.

Completly untrue. Each state has different laws regarding mortgages in bankruptcy & in CT the mortgage can be discharged & you can still keep the home allowing you to walk away scott free at a later date if the situation is calls for you to.