Debt settlement versus BK questions - how does each affect FICO score?

[Anonymous]

A HUGE thanks in advance for your help!

I have over 100k in credit card debt and no job. I own a car worth 25k and a condo which is mortgaged up to the top (95%).

I have never missed a payment or made a late payment and I have a credit score on the mid-600 range. I got married last year and my spouse makes an ok income. I quit my job to work on a business and I was borrowing money on my cards for the business. The business has made nothing.

Needless to say, I'm very stressed out about the debt. I would like to settle this debt and have a few questions:

1) what percentage will the creditors take to settle in cash ASAP?

2) what will happen to my credit score?

3) how will this affect my spouse's credit? We only have a bank acct in common - no cards or loans.

4) what will my credit report have listed after the settlement?

5) I have the same questions about filing chapter 7. What happens to my spouses credit?

I know I made some big mistakes - and I have already changed many of my habits to prevent this from happening again.

Thanks again in advance!!!

[Anonymous]

I forgot to mention that the condo is being rented in another state. We are moving into a rental apartment in California.

[GFer]

1) what percentage will the creditors take to settle in cash ASAP? If this is recent they many not settle (yet). Call 'em up and ask them-explain your situation. Let them know that you are trying to avoid bk.

2) what will happen to my credit score? Obviously this is going to suffer either way. Whether it be high debt---high utilization, co's (if it gets to that point), bk, or settlement of debt.

3) how will this affect my spouse's credit? We only have a bank acct in common - no cards or loans. None---score/credit-wise if he is not joint on this debt. But---obviously, he will feel the financial pain, because what you have to pay towards this is less in his pocket as well. Not to mention if your credit is shot, the two of you will be limited in future purchases unless he is financially stable in and of himself.

4) what will my credit report have listed after the settlement? Settled for less than original amount. Therefore, your utilization will be affected until it either is paid or falls off your reports.

5) I have the same questions about filing chapter 7. What happens to my spouses credit? Not sure about this--defer to other more experienced members with bk.

I know I made some big mistakes - and I have already changed many of my habits to prevent this from happening again.  Obviously, you can only benefit by this in the future! I wish you luck and much perseverance!

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[Anonymous]

You need to talk to a BK lawyer- No one on this fora is qualified to answer your questions.

How is your business formed? Sole P, LLC, Corp?

Are you able to prove the business created these debts?

Have you looked the BK limits in your state?

This another great example to NO commingle biz and personal debt- 

Good lick.