Knowing the above, how do I respond to them in a letter?
A: If you are not prepared to file for bankruptcy, then you have no legal leverage. Your only response would be to offer the creditor a lump-sum payment, and if the creditor rejects your offer, then you're done negotiating, because there is nowhere else to go.
The fact that you are unwilling to disclose your financials, and you are not threatening bankruptcy, would cause any savvy collections attorney to believe (perhaps incorrectly) that you are cornered, and that you cannot file bankruptcy for some reason. This will cause the attorney to file suit for a money judgment, and then start garnishing your wages and executing on your assets.
I dont want to tick them off, I just want to work something out without them invading my personal financial info. Can any of this debt be considered secured debt?
A: Until the creditor sues, and obtains a judgment, and records that judgment in your county for at least 90 days, there is no secured debt. Afterwards, it's secured, and you can't get rid of the debt, even if you do file for bankruptcy.
I dont want this to get to the point of garnishing wages, lien on house, etc. What is the best way to respond?
A: By your foreclosing the possibility of bankruptcy, you have also foreclosed the best way to respond -- which is to threaten bankruptcy while offering a settlement amount that you believe the creditor may accept. You will have to decide whether or not you are prepared to suffer a lawsuit which will include additional collection costs of attorney's fees, and which will result in a wage garnishment
I'm not trying to dismiss your ethical nature -- it's just how the law works. If I were trying to collect against you, I would ask you to pay. If you offered less, I would want to see your financials to determine what you could reasonably pay. Once I had that info, I would make the determination, and then demand that amount. If you refused, I would sue -- based upon my reading of your financials and the potential for your filing bankruptcy. Because once I have those financials, I will know your entire "hand," to use poker nomenclature. And, I will know if you can get away by filing bankruptcy.
If you do not want to file bankruptcy, and you don't want to disclose your financials, then the attorney has nothing to go on except his/her gut. He will have to decide whether or not to call your bluff. If you have a $50,000+ debt, then the attorney will probably take the risk and sue.
After that, you will be once again faced with the choice of filing bankruptcy, or accepting that you will lose in court and be stuck with a very large judgment that will never go away.
The botXXXXX XXXXXne is that it doesn't really matter how you respond, because the collection attorney will simply react based upon the knowledge available. In the end, your circumstance will either end in bankruptcy or your being stuck with a very large debt.
Note: It may be of some interest to you to know that, among others, Donald Trump, Henry Ford, Walt Disney,. Comic book pioneer Stan Lee, the founder of Hershey’s Chocolate, Milton Snavely Hershey and the founder of Heinz Ketchup, H.J. Heinz -- all filed for bankruptcy at one time during their lives.
Food for thought.
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