ORCHARD BANK - HSBC CARD SERVICES I HAVE BBEN OUT OF WORK SINCE MAY 2009. PAY AS MUCH AS I CAN. OVERLIMIT FEES EVERY MONTH. I CANT PAY THIS OFF EVEN IF I COULD. I CANCELLED IT ALREADY. NO SYMPATHY. ONLY OVERLINIT FEES OF COURSE. CAROL STREAM, Illinois

In addition unless this person is a corporation, they will not qualify for a Chapter 11 Bankruptcy. Person debt reconsolidation, determined though a means test is a Chapter 13!

In addition unless this person is a corporation, they will not qualify for a Chapter 11 Bankruptcy. Person debt reconsolidation, determined though a means test is a Chapter 13!

I did read your post and let me further clarify. You are point blank telling this person to play a very dangerous game with the creditor. A bankruptcy attorney will tell you the exactly same thing. Any good lawyer will tell you not to disclose your intent to file. Threatening a financer or guarantor with bankruptcy filing will get you immediate legal action 99% of the time. They will do this so that if and when the borrower files bankruptcy, they will have standing if any money or property is distributed. I'm not saying that bankruptcy is a negative. I think that there is a lot to consider because of the new laws. In many cases chapter 7 is not always an option. Is this person married? Are their cosigners or co borrows. All of that is take into account. If this person qualified for bankruptcy, that is a decision they will need to make. My point is to not open the door for unnecessary litigation. IF this person is not working, what exactly would the purpose of threatening out a payment arrangement they will never be able to sustain. If they are at the point of bankruptcy, be an adult own you decision and file. If you want to work out a payment arrangement, I'll say the same thing. Call the creditor and work it out, but threatening bankruptcy is a mistake.

Chris:

I told the OP the same thing.  I said first check with your attorney, and see if you qualify for chapter 7, if you do, then threaten the creditor with Bankruptcy filing.  If the creditor refuses, then you must file bankruptcy. 

If they threaten the creditor with bankruptcy, and the creditor  files a suit before the debtor files for bankruptcy, the law suit will be thrown out after the bankruptcy is filed, as it is seen as a action to collect a debt, and bankruptcy halts all attempts to collect a debt.

Further, bankruptcy is an expensive proposition, and if you can gain leverage over the creditor, and get them to make a deal, then why not? 

Even filing Chapter 11, would eliminate the interest charges, and over the limit charges, and you would be given 3-5 years to pay off the debt.

Any reasonable debtor would see that bankruptcy is a losing proposition for them.  Just make sure you are going to carry out your threat!!!!!

Do not threaten a creditor with bankruptcy.  If you find that bankruptcies is your only option, hire an attorney and let them notify the creditor.  If you take it upon yourself to notify or threaten a creditor with bankruptcy without the proper filings or legal representation,  many creditors will take immediate legal action against you to put a judgment in place prior the filing.

If you are going to go the legal route.  Let you lawyer handle it.  If it's an empty threat,  be advised that it can create a legal situation that you are not ready for.

HS:

I would go to an attorney, and ask him if you qualify to file chapter 7 bankruptcy.

They will run your income, and expenses through a calculator, and if your income falls below a certain amount, then you are eligible to file.

If your attorney says you qualify for Chapter 7 bankruptcy, then call up HSB Bank, and tell them to 1)Lower your interest rate to 0% , 2).eliminate the over balance charges.  If they agree to, you will need to pay a steady amount every month, otherwise they will reinstate the fees, and higher interest rates.  Use the threat of Bankruptcy get them to renegotiate.  Come up with a 5 year plan to pay the current balance.  (ie you owe 10000, suggest you pay 166.00 a month for 60 months....)

However if you agree to this, you must never be late...

If they refuse then you MUST FILE BANKRUPTCY.  Thiis will eliminate this debt, and you will no longer owe them.  If you dont file bankruptcy, and try this approach, they may sue you!!!