How Realistic is my settlement Plan?

[Anonymous]

Hi, Everyone,

I want to thank everyone for there responses to my bankruptcy post.  I am meeting with an attorney tomorrow, however Bankruptcy is my last option as I want to go to medical school in 2 years and will need to take Graduate PLUS loans out (BK will make this virtually impossible for 5 years).

Here is my proposed settlemetn option.  I am going to try to borrow the money from a close relative and if agreed, I will simply pay them back in 12 months (direct 50% of my pay-check to their account from my direct deposit)--Option 2 

Creditor                              Balance                                     Negotiated 25%                Negotiated 35%        Negotiated 45%
Credit First                         $1,130.00                                         $281.50                              $394.50                        $507.50
One Main Financial          $3,455.00                                         $862.75                            $1,208.25                     $1,553.75
Verizon Wireless              $1,126.00                                         $280.50                            $393.10                         $505.70
Macys DSNB                    $476.00                                            $118.00                            $165.60                         $213.20
PenFed                             $3,387.00                                        $845.75                             $1,184.45                      $1,523.15
Capital One Bank USA $4,333.00                                        $1,082.25                           $1,515.55                      $1,948.85
Chase                               $1,397.00                                      $348.25                            $487.95                               $627.65
Chase                                $3,097.00                                    $773.25                          $1,082.95                            $1,392.65
NASA FCU                      $10,646.00                                  $2,660.50                       $3,725.10                             $4,789.70
Capital One Bank USA $1,994.00                                     $497.50                          $696.90                               $896.30
Chase                             $1,629.00                                 $406.25                        $569.15                                      $732.05
Emergency Physicians  $1,245.00                              $310.25                        $434.75                                      $559.25
Citibank                           $4,239.00                              $1,058.75                      $1,482.65                                $1,906.55
Sprint                                 $1,417.00                            $353.25                        $494.95                                       $636.65
Nationwide Insurance $319.00                                  $78.75                          $110.65                                       $142.55
Medical                           $624.00                            $155.00                         $217.40                                           $279.80
On Time Transport Inc. $52.00                            $12.00                             $17.20                                                 $22.40
Acura Financial Services $25,000.00                 $6,249.00                        $8,749.00                                      $11,249.00
Total Unsecured Outstanding $65,566.00       $16,373.50                       $22,947.10                                $29,503.70

Sorry for the spacing being all messed up.  My proposed plan I will talk to the attorney about is to make settlements in the amount of either $16,373.50 or $22,947.10 (I can probably borrow this money from a family member, but 23k at the most.

I will then pay this personal loan back from my paychecks.

I do have a navy federal locan for about 21k that is current (and I want to keep current) as NFCU is a great CU and I will be there for me when its time for med school (I hope).

Does this seem like a "realistic plan" do you thing creditors will accept a 25% or 35% settlement?  What about NFCU, the interest rate is 18%, any chance I could negotiate this down (maybe through the personal finance department).  

I do appreciate all of you.  This is so challenging, I sometimes feel hopeless, like there is no good way out of this mess.  I really want to avoide BK as like I said I need to be able to borrow 200k for med school.  I am 23, I did not live a luxury life, I has some medical problems and paid for it on my CC, my father had many many many troubles and I had to basically "be a dad" to my siblings, pay off there private education (high school) so their transcrips would be released to go to a public school.  

Again thank you for all your help.  I look forward to hearing from you guys.

[Remedios]

That would depend on individual creditors and age of accounts 

If you're talking about "newer" accounts, still in the hands of OC, I would not count on too many 25% and 35%. Even 45% may be difficult to get, if it's recent CO

Older accounts, in hands of CAs are in general by far more amenable to lower end settlements. 

Do you know if Capital One accounts are still within SOL? They are known to engage in litigation and you have multiple, large amounts with them. 

[Anonymous]

Thanks for you insight. The capital once accounts are still within SOL, as all of them are.

I was sued for discover but hired an attorney who had the case dismissed, discover never filed an appeal within 30 days so debt has been dismissed to my understand.

[Remedios]

And you've absolutely ruled out the BK? 

[Anonymous]

I think bankruptcy would hurt me further. I would not be able to borrow graduate PLUS loans.

I’m in the situation of “letting the accounts age past SOL and fall off at 7 years”, “settle (something’s better than nothing right) or chapter 7/13.

[Remedios]

Well, if BK is not an option, attempting to settle what you can is probably the next best thing. 

You or the attorney need to make the first round of settlement offers. You need to know what you're looking at money wise. 

I'd prioritize Cap One accounts because they are brutal. 

Also, on your Discover dismissal, was with with/without prejudice? If it was without, they can come back at any time while under SOL. 

[Anonymous]

You may already be knocked out of qualifying for the Federal Plus loan. It's not nust bankruptcy that can disqualify you, but adverse credit history in general. If these have gone to charge off status, you are already showing an adverse credit history. If that is the case, I would file for bankruptcy and start fresh.

[Anonymous]

The discover was a “judgement for defendant”, my attorney told me here in PA Discover could have appealed the decision within 30 days, since they did not appeal the case is closed.

I just met with a BK attorney, and I have definitely crossed it off my list. I need to try to settle.

Acura is hitting me with the lease over bill (excess wear and tear, miles). They could probably get 10k for it at auctions, I mean I could of purchased the car for 24k (that was literally the payoff).

[FireMedic1]

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@Anonymous wrote:
The discover was a “judgement for defendant”, my attorney told me here in PA Discover could have appealed the decision within 30 days, since they did not appeal the case is closed.

I just met with a BK attorney, and I have definitely crossed it off my list. I need to try to settle.

Acura is hitting me with the lease over bill (excess wear and tear, miles). They could probably get 10k for it at auctions, I mean I could of purchased the car for 24k (that was literally the payoff).

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What didnt you like about BK after talking to the lawyer? Its nice a family member will help. But what if something happens. Money rips families aparts. Wills and marriages just to name a couple.

[Anonymous]

There were many things

-The fact that my corporate card with American Express would be at risk of cancelation

-My employer would learn of the Chapter 13 (he did not think I would pass the means test)

-My credit would report a Bankruptcy preventing me from taking Grad PLUS loans for at least 7 years.  I did some reading on the Grad Plus loans and if my accounts are reported as "settled" 0 Balance I think I would be alright.

-NFCU came though for me today and agreed to decrease my personal loan interest to 8% for 12 months, and said in another 12 moths I could always apply for it again and will more likely then not be approved.  I plan on aggressively paying this loan off within 36 months.

-Here is probably the greatest: I do not have a car any more, and do not pay insurance which saved $1,000 about a month, I have cut entertainment out for the most part except for me purchasing a couple 6 packs on the weekend and staying at home.  I walk alot, and cut out eating out.  I feel that with my income there is not reason why I cannot be taking $1835.00 a month to settle some debts.  If I take a $25,000 personal loan from my uncle (who can afford to loose it--but nonetheless I would name him as a beneficiary on my life insurance) I could afford to pay that back in a year--assuming the creditors all settle.

Do you know any creditors who are known for being "tuff" in settlements?