Settle? BK7?

[sheam]

My spouse became disabled circa 2013. He did not qualify for SSD. By 2017, I could no longer keep up with CC payments and just walked away. After a few strategic career moves, I'm in a place where I might be able to begin settling some debt. My goal is to buy a house sometime in the next 2 years. I'm wondering what my plan of attack should be.

 

Chase: ~11k

Discover: ~2k

BofA: ~3.5k

USAA: ~20k

Collections (Midland and Portfolio Recovery): ~7.5k

 

I'm in NY where the SOL is 6 years, but my understanding is that our borrowing statute means the SOL of the lender applies. If this is correct, I'll be out of SOL this year on everything except USAA (next year).

 

I probably should have filed BK7 back in 2017, but I didn't. Now, I'm concerned about it affecting my employment. I know I shouldn't be, but I work in public finance and feel that a public record like this would reflect very negatively on me. My specific employer isn't the most understanding, ethical employer, but I'm making $20k more than I was two years ago, so there's that. Also, I'm hoping to buy through FHA or SONYMA and I read that I'd have to wait three years to buy after discharge. I'd prefer to settle if it means I can buy sooner.

 

I'm hoping that I can settle many of these around 30-40%. Is this realistic? Are any of these lenders known for being unwilling to settle for that little?

 

I can settle almost all but USAA this year. USAA might need to wait another year, but I'm afraid if they see me settling with the others, they'll sue before the SOL expires next year. Does anyone know what settling with USAA is like or what I should expect? Should I wait to start settling until next year so I don't trigger a lawsuit from USAA?

 

I'm also of the understanding that in NY, settled debt must be removed from a credit report after 5 years. By this logic, if I settle, my report will be clean in 2 years. Is that right? Is that worth settling instead of filing BK7? Also, is removal from DOFD or date of charge off? I've seen some things say it's 6 months after last payment.

 

Thank you all for your help!

[StarkRaven$]

1 hour ago, sheam said:

My spouse became disabled circa 2013. He did not qualify for SSD. By 2017, I could no longer keep up with CC payments and just walked away. After a few strategic career moves, I'm in a place where I might be able to begin settling some debt. My goal is to buy a house sometime in the next 2 years. I'm wondering what my plan of attack should be.

 

Chase: ~11k

Discover: ~2k

BofA: ~3.5k

USAA: ~20k

Collections (Midland and Portfolio Recovery): ~7.5k

 

I'm in NY where the SOL is 6 years, but my understanding is that our borrowing statute means the SOL of the lender applies. If this is correct, I'll be out of SOL this year on everything except USAA (next year).  

 

I probably should have filed BK7 back in 2017, but I didn't. Now, I'm concerned about it affecting my employment. I know I shouldn't be, but I work in public finance and feel that a public record like this would reflect very negatively on me. My specific employer isn't the most understanding, ethical employer, but I'm making $20k more than I was two years ago, so there's that. Also, I'm hoping to buy through FHA or SONYMA and I read that I'd have to wait three years to buy after discharge. I'd prefer to settle if it means I can buy sooner.

 

I'm hoping that I can settle many of these around 30-40%. Is this realistic? Are any of these lenders known for being unwilling to settle for that little?

 

I can settle almost all but USAA this year. USAA might need to wait another year, but I'm afraid if they see me settling with the others, they'll sue before the SOL expires next year. Does anyone know what settling with USAA is like or what I should expect? Should I wait to start settling until next year so I don't trigger a lawsuit from USAA?

 

I'm also of the understanding that in NY, settled debt must be removed from a credit report after 5 years. By this logic, if I settle, my report will be clean in 2 years. Is that right? Is that worth settling instead of filing BK7? Also, is removal from DOFD or date of charge off? I've seen some things say it's 6 months after last payment.

 

Thank you all for your help!

"I'm in NY where the SOL is 6 years, but my understanding is that our borrowing statute means the SOL of the lender applies. If this is correct, I'll be out of SOL this year on everything except USAA (next year)." 

 

SOL starts on the date of first major delinquent (DOFD) or if any payments have been made then it starts from last payment.

 

 

 

 

[cv91915]

I don't know a lot about the nuances of New York law in this regard, but I do recall previous discussions.

 

Here are a handful of (unscreened) threads on the topic, in case you haven't already found and read them.

 

BK over ~$40k that you could settle for less seems extreme -- depending on your income and other obligations, of course.

 

 

 

 

  

Edited May 27, 2020 by cv91915