My question involves collection proceedings in the State of: WA
I am 25 years old. While in college, instead of taking out student loans, I charged parts of my tuition on my credit card as well as general living expenses. During my time also in college, I was working non-stop for a business start-up (I was part-owner) which completely failed. I was only originally charging my college living expenses/tuition (and not all of it by any means, that accounts for maybe $10,000 of the debt) because all of my other income went into paying for the start-up investment costs since I owned part of the company. The company went bankrupt in November of 2014 and after that, having not much work, slowly added and compounded my debt obligations. It is now February 2017 and every single one of my 7 cards are maxed out.
All of the charges I did were for personal use and business investment use. I am self-employed and run my own IT business which payed most of my day-to-day expenses (besides when I was funneling money into the start-up via both my business income and credit card purchases). The reason I was granted so much credit was the length I had of good payments (I haven't ever missed a single payment up until last month (last payment was December 30th and all of my accounts were current), ever since I got my first card at age 18) and the fact that I was running a successful business. I used to pay the balance off in full every single month up until a few years ago when I could no longer do it. Plus my personal business was suffering some downtime and income wasn't as great. So yes, I turned to the credit card companies.
Yes, I know it was dumb, yes I know it was wrong for me to do - but I was trying my best to "have my cake and eat it to" so-to-speak. I'll never do something like this again.
I want to make it clear about a few things:
1) I always payed my taxes and did them correctly via professionals. I owe nothing to the IRS.
2) I have no student loans
3) I own no real property - this includes houses, cars, etc. My truck is from 1985 and is worth maybe $1000 maximum. I have only ever rented. I have never in my life missed a rent payment, nor will I be in the future.
4) I spoke with one bankruptcy attorney who told me this is exactly why bankruptcy laws are there and I could toss in the towel at any time with only destroying my credit for the next 10 years. He advised Chapter 7 since I have no assets. He advised I could probably file it myself with paying him for a little help/guidance.
5) All 7 of my credit cards are maxed out and unusable at this point.
To reiterate - I only owe credit card debt. I also never even took out a single cash advance. No house, no expensive lavish items, etc. My couch in my living room cost me $115. Consider me a poor college graduate with a massive amount of CC debt.
Now with all of that said. I have been diligently applying for a new career. In less than a month I have already lined up two interviews for high paying jobs in the $70,000 - $110,000 salary range. I no longer wish to be self-employed. I have a strong feeling I will get one or both of them as offers. One thing I am is a hard worker. I put myself through school without student loans, and worked my A$$ off nonstop. Only this last year did I feel like I really needed a break post-college and slacked off enough to build up a massive amount of debt. I won't go into detail, but I needed this both emotionally and physically for myself at the time.
WITH this new salary, I am really tempted to try and settle the debt with the credit card companies. In exchange, I settle for less, close the accounts, and cut a deal with them that doesn't allow them to mark my credit up with a "settled debt" notification. I've heard this is possible - if not, please let me know. I have no motivation to "settle my debt" if they are going to mark up my credit report with "settled debt" entries from 7 cards. That would be almost as bad as declaring bankruptcy.
I am a very good negotiator, and don't want to try for any of the debt settlement scams. I want to do this on my own. At this point I am only 30 days behind my last payment - I've heard that it takes at least 6 months for them to charge it off and send it to collections. That gives me some wiggle room at this point to negotiate with each card company directly.
I've been very open with them telling them I am unable to pay at the moment due to financial difficulty. I haven't told them anything more then that. It's got to be pretty obvious from their end that I stopped paying as soon as the cards were maxed out. They probably know that it's over at this point and not collectable.
Any advisement would be appreciated. And please, no lectures for what I did to myself. I already heard enough of that from my parents who, I'm surprised, have not disowned or disinherited me yet. Besides my mounting debt, I've been an hard worker, excellent student, payed my own rent, never asked my parents for a dime. And I won't do that either.
Thanks everyone.
Settling a Debt: $50,000 in Credit Card Debt, Recent College Grad, No Assets - Settling or Bankruptcy
