Please help with, Credit Card Debt Negation Settlement Or Other options?

Question

Seeing a friend fall deep in debt in no time, I like to help him, get an idea of what his options are - Bankruptcy or Settlement.

He made huge debt (over 50 thousand) to 4 major credit cards while in New Jersey.

Since Feb 2006, he has no job, no nothing ... literally nothing, stopped paying, moved out of state, no contact with creditors or response to court orders. (A lot happened with other cards). Now,

Card-1:
With Original Creditor
Principal 10K.
With penalties 15K

Card-2
Been sold 3 times and with an outside recovery company.
Principal 19K.
With penalties 27K.

QUESTIONS:

We understand Bankruptcy may be best option… its apparent it’s quite easy in his case. BUT please advice on the below.

1) In this scenario, how much these agencies would agree for one time payment?

2) How should we proceed OR should we hire an attorney to do this work for us?

3) Are there any better options such as consolidating?

4) Plz recommend attorneys, consolidators, any thing.

Big Thanks.

Answer 1

Regarding how much the agencies would agree to a one time (reduced amount) payment depends on a few factors - age of the accounts, if they had sued and won (you had mentioned court), etc.

If the accounts are fairly recent and/or they received default judgments on them, they probably will not discount the amount much.

If the accounts are pretty old since he defaulted and there are no judgments, they may work with him on a much lesser amount.
If the accounts are past the collecting SOL with no judgments, they would probably be more inclined to settle for a greatly reduced amount since the only way they could "legally" get paid on the accounts is with his offer to pay. Or, if they are past the collecting SOL and there is no judgments, he has a legal right to send them a SOL letter informing them the account(s) are no longer legally collectible and he has the legal right to not pay.

He needs to order his credit reports to see who/what is reporting.
He also needs to contact the court clerks in "every" county/city he has lived in since his "very first" default and ask if there is anything filed in his name.

If he decides to try to work with them, he should first start by sending validation letters. If/when they properly validate he might send them his offer along with the requests that they consider it as "payment in full" and that they will delete what they have placed on his reports.

If he is considering bankruptcy (BK), he might speak to a BK lawyer.

You/he might also click on my profile and click on the last link I have listed. Do some reading in both the credit forum and the BK forum. (It is a "totally free" site with a great deal of info on it)
He will be able to get an idea of what it takes to try and deal with the creditors or what is involved in filing BK and would probably be able to decide if he would want to file on his own or spend the money to have a lawyer file for him.

Filing BK on ones own is not for everyone. If he reads through the forum and has any doubts about being able to handle it, he should get a lawyer

Answer 2

I paintings for a debt cost it's the quickest and simplest approach to due it. With how little you debt you have got I might suck it up a further month after which pay it off in complete. If you agree your debt it's going to lessen your credit score ranking slightly.