Legal Question in Credit and Debt Law in California

To Much Credit Debt

We were making double payments on both of our homes. One we recently moved into, Are other home took six months to sell so the double payments also causing us to use a lot of our credit cards.

Question. How do we go about

paying all are bills. I have some money that I want to clear up as much debt as possible. There are Two Bank Cards that we owe $20,000 ea. If we offer to pay them off with a reduced amout will that still effect our credit. Is it better just to make the payments and have late charges.

Thanks Much


Asked on 12/27/08, 2:37 am

1 Answer from Attorneys
Carl Starrett Law Offices of Carl H. Starrett II

Re: To Much Credit Debt

First of all, stop making double payments on your house and pay down some of the credit card debt. You probably know by now that making double payments on 2 houses was a mistake.

In this economy, creditors are willing to make deals. However, it may still reflect negatively on your credit. Also, a credit card company that compromises a balance is required to send a 1099 or the IRS because debt forgiveness is a type of income. You may have to pay taxes on this income too.

You should contact a member of the National Association of Consumer Bankruptcy Attorneys for a consultation. They can properly advise you on your options regarding this situation.

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Answered on 12/27/08, 12:24 pm


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