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Windfall and What To Do With It?


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Due to a significant loss in household income (including spouse's 2020 unemployment during the pandemic), I exhausted all financial means to maintain unsecured debt payments several months ago. As a result, I am 90 days delinquent on most of that debt. No issues with the mortgage or other secured debt. The household income situation is the best it can be for now. I literally was planning to meet with a BK attorney this month to discuss options. However, I have an unexpected windfall coming my way. This windfall would only wipe out approximately 25% of the unsecured debt. I'm not sure what would be the best way to utilize the proceeds. Any recommendations? Should I go ahead and meet with an attorney before doing anything with the windfall? The windfall will be one-time money.

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That said, since these are all just a few months past due, I would highly recommend pursuit of a Rule 5000 adjustment which gets the accounts current AND removes the derogatory reporting for that delinquency period from the reports.  Not all of them will recognize the Rule 5000 term despite it being an FDIC Rule.  However, they will often respond to work-out calls...they may want the 90 days up front, which is not unreasonable.  But some of the 'windfall' needs also to be earmarked for emergency savings! 

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