Collection agencies and bankruptcy

[Anonymous]

I am negotiating a payment plan with Citi.  A settlement is out of the question at the moment.  I want to get the lowest monthly payment from them to start.  If I can't get a good payment plan, I will have to consider bankruptcy.  Wouldn't the credit card company prefer to negotiate a payment plan rather than dealing with a bankruptcy?  Should I tell them that I am considering bankruptcy if I cannot negotiate a good payment plan?  Thanks. 

[llecs]

I think it boils down to math. When you go bad on a debt, those repayments would bring in less income to them than if they wrote it off or sold it to a CA as bad debt and reinvested that money. In other words, selling it or writing it off as a loss and getting a tax break would be a greater return on investment in the long run that receiving $50 here or $100 there in interest-only repayments each month. I threw out a figure and have no idea what they'd receive in interest repayments from your account or how much you have budgeted. Mathmatically they figured that they can continue to make $$$ if x% defaults or goes BK.

[Anonymous]

Citi has already sold it off and it's currently with Monarch Recovery.  That's who I'm dealing with.  Should I tell them that I am considering a bankruptcy?  Thanks.

[llecs]

Since Citi is no longer in the picture, I'd keep trying directly with the CA. Some are real jerks about settling too. You could mention the BK bit. I have a friend who did that once and it worked, though I tried it back in the day and never worked. They'd tell me they'll forward forms to hand to my BK attorney (they called my bluff).

Before ever considering BK, if serious about it, review the statute of limitations in your state. I've seen some people in here wanting to file BK but the debt was too old to be sued for.

[Anonymous]

Thanks for the help.

[RobertEG]

I would not just assume that BK is the only alternative if you cant meet a current debt obligation, and cant negotiate a settlement that you can meet.

It is always bad to be sued, but even if you receive a judgment from the court, judges arent blind to reality.  If you go to court and present proof of your current financial situation, the judge will take that into account if he or she issues, as part of their judgment, terms for execution of repayment of the judgment.  A judge has the power to order a settlement.

You may end up with a court-ordered execution of payment that you can meet without having to resort to BK.  Just hope the court is equitable.

Have you consulted an attorney or a professional debt counselor?