You could promise a good payment to each creditor

I am glad to see your reply 🙂 and glad I could help you in some small way.

I would definitely go the deferment route if you can for now; with a bonus coming, you could promise a good payment to each creditor to help get things back on track and they may be more willing to defer things for now (make sure you ask for a reduction in interest during the deferment period since you have a lump sum payment ability coming).

I agree with your assessment on the lawsuit; how likely is it to settle soon and in your favor however is another question and one best addressed to your attorney; and since you have an attorney for this lawsuit they may be the one to discuss the financial options with as well 😉 Each state’s laws a just enough different to make it interesting and confusing, it’s always wise to check what’s possible in your state 😉

As far as the allotment goes; I agree it should be based on percentage vs. flat to each creditor; but I think asking for a deferment might do you more good under these circumstances.

You may not have any option but bankruptcy. However, if you are SURE you will receive a large settlement from a lawsuit in December, you should be able to “stall” your creditors long enough to receive the settlement and pay everything off in full. Yes, they may turn you over to a collection agency but if you are able to pay off the accounts in full it won’t be too much of a black mark on your credit history.

Another possible option regarding the settlement: check with your lawyer but can your creditors file a claim on the settlement? Not sure about the legal terms but does that make sense? Good luck with your situation. I started out over 30K in debt and did almost all the things Debs suggested: sold my house, took a better job, sold a bunch of stuff (aka CRAP!) that I didn’t need, etc. I did make the mistake of hooking up with a Debt Settlement company but ended up working with a very good Debt Management Program, they have been a big help.