We have massive credit card debt but do not want to file bankruptcy. We have made reasonable payment arrangements with most credit cards except 2 which are 6 months in arrears and have been sent to collection agencies/attorneys. We do not have any liquid assests such as cash and we have a mortgage that is under water. Should we try to work out reasonable payment with the collection agencies or wait to see if they take us to court. We have already sent offers to pay full balance with 0% in reasonable monthly payments and have kept proof of reciept of letters. We live in Maine. Any advice would be great.
1 Answer from Attorneys
While bankruptcy is usually by far the cheapest option and may harm your credit score the least, you can usually negotiate settlements for less than 50% of the balance, either directly or with the help of an attorney. However, there are tax consequences to debt settlement. Once a lawsuit is filed, your options may be limited.