Need help negotiating with IndyMac HELOC

[calarizona]

Can anyone offer advice or suggestions as to how I should go about trying to negotiate a settlement offer with IndyMac (now One West) on my HELOC? I owe about $369,000 on my 1st (Central Mortgage Co.), and $93,000 on my HELOC. My property is worth about $230,000. I know I will still be way upside down, but we do not want to walk away if we can help it.

We went from a $160,000 income to $50,000 about 6 months ago. We have almost nothing left to sell to keep paying debts, our credit is now shot, and debts are so out of control, that some form of BK is inevitable.

I have been told by BK attorneys, that we would qualify for either a chapter 7 or 13. As I see it, IndyMac will get nothing if I go into foreclosure or file a chapter 13 (lien will be stripped). A chapter 7 would be less costly and quicker, but I need to negotiate a settlement with the HELOC to remove the lien. I had one attorney tell me he could get them to settle for $5000, but wanted to charge me $3000 to do it. I figure that we can still scrape together about $5000-6000, if we sell the last liquid items we have, borrow from family, and tap all available resources.

We have stopped paying everything except 1st Mortgage, cars and utilities. This is all we can afford at this point. 1st Mortgage is current, 2nd mortgage is 60 days late.

Thus far, the only people I can reach at IndyMac are the collectors. They don't have the authority to do anything but ask for payments. Given the circumstances, it seems it would be better for them to accept SOMETHING rather than get NOTHING. I just need to know how to get to the right people and negotiate the right way.

Does anyone have any experience with this sort of issue? Any comments or suggestions are welcome.