Chase CC Settlement?

[BKINAZ]

Dec.- Stopped paying my credit cards.

Feb.- Tried to negotiate to 30%...they laughed at me and came back with 85%.

Mar.- Decided to string them along until it goes to collections where I hope i can settle or file 7 at the end of the year.

TODAY- I just had a phone call with my Chase Credit card ($46k owed) she offered me 45% (5 minutes ago), and even though I told her I would consider it and see if I could get a loan from family members (I won't btw because it is still too much for us) she lowered herself down to 35%...in the same call!

* SIDE NOTE: Back in February a guy told me 35% like they could do it, presented it to their bosses and they came back with 85%. So even though she offered...I don't know if she can come through...I bet she can.

I had heard credit cards become more open to settlement at the 160-180day mark.

BTW they told me when I offered them 30% 60 days ago that their policy is they don't go below 35%, and she repeated that today. So...are they like 35% and if I don't settle, they send it to a bill collector or sue?

Lastly...if I can settle my cards for 30-35% it might keep us out of BK...our deed in lieu is what will determine if we HAVE to file and we are in the home stretch to find out if that will happen...it sounds like it will. I won't pull the string on the credit cards until the Deed in lieu is resolved....so my my main question...can I get THAT much of a better deal if it goes to collection? A lawyer friend and account friend of mine says yes.

Thoughts?

[optimistic1]

Good for you that you are attempting the settlement process without hiring some stupid company to do the same thing you can do yourself.

They will settle for pennies on the dollar for sure, and the longer the account ages, the lower they will go. Just be sure you get it all in writing and it is legitimate, thats where hiring a company to do this for you comes in handy by the way.

There are several attorneys here in the Phoenix area that will handle this type of stuff for you, instead of filing a bk.

You are aware that you will be given a 1099 to report to the IRS. And unless you can prove insolvency to the IRS, you will end up with a greater tax liability?

You probably already knew all that, and to you it outweighs the thought of full blown BK.

Chase, never even calls us anymore, which is why I think they are either planning on suing, or they could care less, because we already told them we are filing Ch.13 and gave them my attorney info.

[catleg]

You probably want to hit them as close as reasonably possible to charge-off which I believe happens at 180 days late.

For example I have a Crap1 account last paid 9/29/08 for a 10/7/08 due date, I was told it was at "142 days" yesterday 4/2. Clock runs from first missed due date.

So it has 38 days to go until 5/10/09 (approx). Probably need to allow at least 21 days before that to get a final offer and get it mailed to you and pay it.

Remember, if you pay, a whole bunch of nasty stuff happens like:
(a) you reage for credit reporting the 7 year timer (not that I would care)
(b) you get 1099-c
(c) you put money in the proverbial shredder

All this I post for the sake of documenting the pro's and con's. I really doubt there is a good reason to pay it if BK is available to you.

Beyond the 180 days it's not clear to me what happens, the OC may sue for judgement, or sell, or just continue to collect. The 180 day charge off interval is the only bright line we know about. I think prior to that point collections is focused on getting the account back into "performing" status e.g. pay off 5 years at 0% type deal.

[BKINAZ]

optimistic "You are aware that you will be given a 1099 to report to the IRS. And unless you can prove insolvency to the IRS, you will end up with a greater tax liability?

Yep. But I am more aware that if you are insolvent...we are...that we don't have to pay taxes on a 1099.

CATLEG "Remember, if you pay, a whole bunch of nasty stuff happens like:"
(a) you reage for credit reporting the 7 year timer (not that I would care)
(b) you get 1099-c
(c) you put money in the proverbial shredder
All this I post for the sake of documenting the pro's and con's. I really doubt there is a good reason to pay it if BK is available to you.

a) You're right...like you, we don't care either. B) Insolvent C) That's on my mind.

The BK thing...that's the tricky deal. You see we are less than 30 days from settling our deed in lieu (land not house)...there is no out of pocket costs there. So really...if we do bk we are only doing it for $70k. So it's pay $21,000 now and still have BK as an option in the future or use up our BK card for the $70k and some other asset issues I'd rather not get into. In addition...if we go the BK route and for whatever reason our Chapter 7 gets kicked to a 13 we could be really screwed on an inheritance front...and those same said assets.

But again...if the deed in lieu doesn't happen...we'll settle with nobody and go chapter 7.

[treehugger1]

CatLeg, This probably belongs on another post, but CAP1 does not make it a habit to sell their debt after the 180 day chargeoff. They will contract with one of the big CA's (Allied, NCO, etc) and they will contact you. Send these folks a C&D. They will most likely send the account back to Cap 1. After a while Cap1 sent my acounts to a collection attoney agency and I DV'd them. After 2-3 months the CA firm sent me some old statements and an "agreement from 2006." I never opened a Cap1 account in 2006 and sent them back a letter requesting stating so, and would like to see any and all original documentation related to this alleged debt with my name on it. No word back as of this date (45 days later.)

To the OP. I would not settle for $0.30 on the dollar if you think BK is in the future. In addition, you probably need to attempt to settle with all your unsecured or perhaps risk more aggressive suits. CA's and OC's can pull your credit reports and they can certainly see whether or not you have "paid off" any large balances. I'm not sure that those who were not paid use this information, but it will show up and is available for other OC's and CA's to see. That being said, I'm not so sure that any current CA's will invest that much effort to track your credit payment history when there is much lower hanging fruit on the tree.

Just my opinions: TH

[catleg]

Thanks, treehugger. I'm delaying my BK as long as possible, not really thinking I can get all these credit cards to settle. So your advice is very helpful. I've gotten a few CA's so far and done C&D letters and it has worked ok. The only threats to sue have come from Chase and a casino but I'm not really afraid of them at this point. Here in NJ Capital One uses a law firm called Pressler and Pressler to do their dirty work so I expect I could hear from them eventually. One of the principals of this law firm was involved in setting up the "special civil part" of NJ superior court (for cases up to 15k) so you just know the deck is stacked against you.

I will say that from a debtors perspective Capital One so far has shown a lot more restraint than some of the other big name banks, especially Chase and US Bank, maybe getting their hand slapped in the past is the reason.

[BKINAZ]

TREE "To the OP. I would not settle for $0.30 on the dollar if you think BK is in the future."

Here's our thinking.
1. If our land settles with a deed in lieu (it looks like we are) then we have completed step one.

2. If Chase settles with the $46k (we owe $70k in cc) then that's huge...but I think I need to have chase settle all three of my chase accounts ($56k total)...

The question becomes...we have $14k on cc's remaining...honestly we could ride that out and either settle in the future...or pay them in the future. So again...it doesn't make sense to file BK over $14k...or if we are lucky and we can get them all at 30-35% then we are saved from BK by paying $21-$22k to settle our debt. If we opt dump our house...then chapter 7 is the only way to go for us. We'll know that in 30 days as well.