Hello: This is Attorney Phillips. I am so sorry to read about your difficulties. I will further assist your with your post.
In my experience the Judgment creditor is unlikely to settle. I will not pay another cent on this debt if I were you. You have paid off the debt. The only thing you would be paying now is the outrageous interest rate. So, you should not do it.
You may consider filing for Chapter 7 bankruptcy protection if you eligible to wipe out this debt if you have a real estate or other assets that the Judgment creditor can get to. If you do not have any asset, then you are Judgment Proof and there is really nothing the Judgment creditor can do to you.
You would be eligible to file for Chapter 7 bankruptcy protection, if you meet the Means test—the income test. If your income is equal to or less than the current income guidelines for your family size in your state, you would be eligible to file for a Chapter 7 bankruptcy all things being equal. The income used in calculating the Means test is the income for the 6 months before the filing of the bankruptcy petition. This means that if you are filing for bankruptcy protection this month, August 2106, the income that would be used is your income from February 2016 to July 2016. If you are filing next month, September 2016, the income that would be used in the Means Test calculation would be the income from March 2016 to August 2016, etc. Social Security benefits are not considered income in the bankruptcy context.
Click on the link below to see the current income guidelines for your state:
The filling fee for Chapter 7 is $335.00. You may able to waive this filing fee if your income is 150% below the current poverty guidelines. Click here for current poverty guidelines:
You must receive budget and credit counseling from an approved credit counseling agency and obtain a Certificate of Credit Counselling to be filed with your bankruptcy case. The agency will review possible options available to you in credit counseling and assist you in reviewing your budget. Different agencies provide the counseling in-person, by telephone, or over the Internet.
It is usually a good idea for you to meet with an attorney before you receive the required credit counseling. Unlike a credit counselor, who cannot give legal advice, an attorney can provide counseling on whether bankruptcy is the best option. If bankruptcy is not the right answer for you, a good attorney will offer a range of other suggestions. The attorney can also provide you with a list of approved credit counseling agencies, or you can check the website for the United States Trustee Program office at http://www.usdoj.gov/ust/eo/bapcpa/ccde/cc_approved.htm
After your case is filed, you must complete an approved course in personal finances. This course will take approximately two hours to complete. Your attorney can give you a list of organizations that provide approved courses, or you can check the website for the United States Trustee Program office at http://www.usdoj.gov/ust/eo/bapcpa/ccde/de_approved.htm
Consult a local bankruptcy attorney for further explanations of your rights and responsibilities.
The sites below are good resources for finding bankruptcy attorneys in your area:
If you cannot afford an Attorney, then the next best alternative will be to use bankruptcy petition preparer. Bankruptcy petition preparers prepare bankruptcy forms but they cannot give you legal advice because they are not attorneys. You can do a search on Google to find bankruptcy petition preparers.
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