Thanks to the mis-information surrounding personal Bankruptcy filings, some people will attempt to settle with their creditors on their own, rather than consulting with an attorney. Unfortunately, these people ofter end up in Bankruptcy Court after they have paid thousands of dollars on dischargeable debts and received 1099s for forgiven debts. Recently a young lady who had settled over half of her debts came to my office after she was sued for over $10,000 on an old credit card debt. The creditor refused to negotiate with her, demanding no less than 80%. Facing a judgment and garnishment, bankruptcy was her only remaining option. Unfortunately, she had already paid many thousands of dollars to her creditors before filing. Many people settle the manageable small cases first, however, its better to find out if you can settle the large cases, the ones that will force you into bankruptcy if suit is filed, before paying thousands of dollars you could have used to get a fresh start after Bankruptcy.
