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Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2884
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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I am working to eliminate a substantial amount of unsecured

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I am working to eliminate a substantial amount of unsecured debt from my personal balance sheet. The debts are largely the result of "deficit spending" over a period of several years. At the moment, I am current on all my obligations, including three credit cards that are being serviced by a debt managment program. The "800 pound gorilla" in the room is Bank of America (BOA). I owe BOA just under $100K and have tried unsuccessfully to negotiate a lower rate and longer term for my debts (current monthly payments equal $1,750). My direct contact with BOA has been a combination of email, telephone calls and written correspondence. Without concessions from BOA, I will soon be in a position of not being able to pay all of my creditors.

1) If I default on BOA, do you think they will be more inclined to negotiate a restructuring of debt terms?
2) If I default on BOA, what is the worst case scenario for me? A court judgment that garnishes a portion of my wages?
Submitted: 7 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 7 years ago.
Each creditor has their own settlement options, so I cannot speculate what BofA will offer. Any settlement though, would be taxable income to you, so talk to your tax advisor.

If you default, and don't make payments, then they can sue, obtain judgment. If so, then they can garnish wages up to 15% until the debt is satisfied, freeze/seize assets such as bank accounts, investments etc. Also, they can put a judgment lien against any real estate, which will need to be paid if refinancing or selling.
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