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Debt Settlement… Settle Debt From Corporation?

In trying to update my debt list, here is what I found in my sea of mail the other day:

Debt Settlement Offer

It’s a debt settlement offer for one of my credit cards. So, I’m wondering… (Poll Added)

Is that the best they can do? I’m guessing it’s 8-9 months late at this point. I can call and negotiate but I don’t have the money to pay them. And I don’t want to be playing games. Remember, I asked CashCall how much they will settle the debt for. The guy wouldn’t answer because he knew I didn’t have the money.

I’ve also received a verbal debt settlement offer from Wells Fargo on my 30K line of credit. They’re offering to settle for 80%. I told them I’ll think about it.

I can probably settle my debt via my corporation… should I?

Here is the thing. It’s no secret that I found a way to borrow money via a corporation. I’m able to do it regardless of my awesome credit using a credit partner.

The credit partner helps me get started by personally guaranteeing my first couple of loans. After 6 months of successful payments I can take the credit partner off and the credit lines become non-recourse. (Sweet!)

The only problem is that I’m not sure if I should be refinancing or settling personal debt via the corporation. There is nothing technically wrong with taking a draw or or borrowing from the corporation according to my attorney.

As long as the corporation was not created with the sole purpose of transferring debt. For everything to be “kosher” the corporation needs to be making money and carrying on some kind of legitimate business activity.

Corporation not making sweet returns… yet.

Well, that’s the goal. I bought the corporation in order to continue doing real estate and other types of investing inside it. Not just to get corporate credit.

However, I’m not quite there yet. We’ve already been approved for some starter credit which allowed me to pay off (refinance) the seed money.

We’re finally in the process of getting our first set of juicy lines and investing that money. But it hasn’t happened yet. So the corporation is not making any money, just borrowing. That’s why I’m not sure I want touch it yet.

Don’t want any perceived shadiness!

However, even if the corp DOES start making some money, it may STILL look a little shady for me to pay off my personal debt with corporate funds. (Even if I do everything right).

I need to get some additional advice to make sure I’ve covered all angles. I don’t want to be accused of co-mingling, “alter ego” or any kind of corporation fraud. That can’t be too good.

There is my “reputation” too.

I mean, a lot of you unfortunately think that just ‘cuz I’ve made some mistakes on loans before, I must be some kind of a criminal or fraudster – always up to no good! Some people are quick to judge, what can I say.

That’s why I want to do everything above-board and be as CLEAN as possible.

And another question…

Is settling debt same as paying it off in full?

I know, I know. I’m not stupid. It’s NOT the same number wise. I’m settling for LESS THAN full amount. That’s the whole point of it. I’m actually wondering about the moral issues and my credibility:

Is me saying “I settled all my debt” same as “I payed off all my debt – every single dirty penny of it!

Do people really care how I did it? Settling debt requires the agreement of the creditor by the way. So it would be a WIN-WIN agreement. But still… I’m wondering what the “right thing” to do is.

There is still the question of filing bankruptcy

Let’s try a vote:

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