Debt settlement or ??? in California--Advice needed

Posted by calquesting (172.199.3.101) on February 05, 2004 at 02:44:35:

Hi:

I am hoping for some advice on my predicament. About 18 months ago I became disabled and was unable to work. I currently get LTD (long term disability) through my former company's insurance agency. Until November '03, I was current on my credit card payments and had good credit. I spoke with a debt settlement company and was considering using their service. They advised me to quit making payments on my unsecured debts so as to give me some bargaining power. I was actually unable to make a payment that month anyway because of a lack of funds. So, I have not made any payments but have not signed up with the debt settlement company yet. I was at the point in November where I couldn't manage the payments anymore, so using a debt counseling service like CCCS was not really an option. I am also uncertain of my future earning potential because of my disability. The LTD insurance will only continue until October, then if I receive anything it will be SSDI and will certainly be less money per month than I now receive.

I have a car, but owe more than the bluebook value. The only other real asset I have is a parcel of vacant land that I co-own (50%) and is valued at $6,000. I'm not sure of the exact definition or what it entails, but I may be judgement proof (or almost?).

I have investigated the debt settlement company as much as I can online. The BBB says that there are only a few complaints, but cautions people against using this kind of service because they can damage your credit rating. I'm sure that my credit rating has gotten worse because I've not made payments on my debt anyway, so in a sense it doesn't entirely matter. I like the idea of debt settlement because I would be able to deal with my debt in a shorter period of time (at least 3 years sooner) than credit counseling, but don't want to throw money away to an agency that may not be reputable or put my financial future in someone's hands that has their profits as a priority, rather than my finances. I have read cautions against debt settlement companies on this site and many others, but settlement feels like the best option to me. I really don't want to even consider bankruptcy unless I have no other choice, or if it is the best decision as recommended by an attorney.

I would greatly appreciate any advice, especially from legal folks or those with similiar experience.

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