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Best way to get them to make settlement offers

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    #16
    What can I add? I'll add experience with Citi, BOFA/MBNA, and Cap1. These folks were not willing to discuss a reduced settlement offer until I got very close to the 180 default. While BOA entertained 35% at 180 days, Cap1 offered no such thing. About 30 days before chargeoff, BOA and Citi were more then willing to write 0% - 2% financing agreements over 5 years. But, as BB pointed out, this was not enough to protect me from the future wrath of other creditors and CA's. I had a few glitches surface after I made 3-9 monthly payments on these plans, and in hindsight I should have them told them to take-a-hike. I got sued in small claims by local creditors and I got sued in small claims by creditors that have local offices. I survived many months of wage garnishment and continued to do my best to meet the other settlement agreements. In the end I will charge off 9 of 22 accounts (these are substantial.) Since I'm still not in a position to file BK, I should have not paid anyone, and told them to sue me and get in line for garnishment. I could have used the money to pay down student loans or helped ailing family members.

    To the original poster, it sounds as if you must have substantial income given your overall CC debt. Why not tell them to take a hike and stop paying them anything? If you are BK 13 material, it won't matter whether you wait 2 months or 10 years, The outcome will be the same; potentially five years of paying disposable income to the trustee. Or, you can suffer the possibility fo 25% wage garnishment. Heck, if your unsecured payments already exceed 25% of your disposable income and you have no assets, then the potential of 25% wage garnishment might look good.

    I'm speaking from the podium of a 50+ old debtor who has (and continues to build) substantial pension/retirement fuinds (currently protected in BK.) At my age, I can play the legal garnishment game for years. Upon retirement, under current laws, I could wait out another 6-12 months and declare a BK7. My unsecured debt payments were about 45% of my takehome. I rather play the garnishment game and hide the other 20% in coffee cans in my yard for a few years.

    If you are young and want credit in the near future, then you might consider BK as soon as possible. The sooner you grind everything to a halt, the sooner you might recover your credit ability. You should ask yourself, "Where do I want to be, and what can I afford 5 years from now?"

    Debt settlement will not improve your credit rating, unless you can somehow manage to also have the creditors (on a payment plan) show "paid as agreed." By the time most creditors are willing to "work" with you, your credit will be trashed for several years. If you declare BK, then at least you have a timeline for everything dropping from your credit report, if that's important to you.

    Just opinions.
    Last edited by treehugger1; 04-17-2009, 11:09 AM. Reason: can't spell

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      #17
      I think a lot of people struggle with their conscience and their moral obligation to pay back money lent in good faith. It is fantastic that this great country has a way to not penalize a person forever for some short term short sightness. In my case, at the same time I was running up charges and moving money around through Bt's, I was building my 401k as fast as I could due to a hot economy and lots of overtime. When I first looked into DS, I was going to disolve my 401K and pay my CC's, and bite the bullett on the tax concequences. But the more I considered it, the more the stock market sunk and the value of my 401k with it. then my wife lost her job, and my hours were cut, then DS just did not seem to be the right decision . morally, I feel the need to pay for my sins, I still do. but it is sure easy to fall into the trap of those 0% offers, and time moves faster than you think.
      Stopped Paying CC's 2/2009. Retained Attorney 1/10/2010 Filed 1/23/2010. Discharged 5/19/10 $187K CC, $240K 2nd,$417K 1st, No asset Ch-7

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        #18
        Albacore, don't be so hard on yourself. Filing BK has nothing to do with being immoral. I think most filers, given the chance, would have rather paid their/our debts.

        Tree, things might be much different now as I don't know when you tried DS.
        But, all those companies mentioned certainly do settle for nominal percentages if settled in one lump sum. Did you have large amounts of cash to settle or were you trying to get payment plans?

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          #19
          Originally posted by fltoo View Post
          Albacore, don't be so hard on yourself. Filing BK has nothing to do with being immoral. I think most filers, given the chance, would have rather paid their/our debts.

          Tree, things might be much different now as I don't know when you tried DS.
          But, all those companies mentioned certainly do settle for nominal percentages if settled in one lump sum. Did you have large amounts of cash to settle or were you trying to get payment plans?

          ohh, I won't. took a while, but i got my head together on it.

          Hell, It's Tequila night , and I'll be drinking with my friend and see how the preperation for his Ch 13 is going.
          Stopped Paying CC's 2/2009. Retained Attorney 1/10/2010 Filed 1/23/2010. Discharged 5/19/10 $187K CC, $240K 2nd,$417K 1st, No asset Ch-7

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            #20
            Like many others, most of the great settlement offers were for lump-sum or 2-3 payments. I didn't want to go that route, but opted to use whatever extra cash I had on hand go to payoff my local creditors, or I encouraged judgment and garnishment from some locals. As a result, I went from 22 creditors/CA's down to about 9. I figured I'd rather deal with only 9. So far, they have shouted, sold, assigned, etc, but no move toward suit from any of these final nine large outside accounts. Total outstanding (not including student loans) in unsecured is about $48K - $50K ranging from $600 - $11000. All nine have charged off or will in another few days.

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              #21
              eew, albacore, Bill OReily? cmon now.

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                #22
                When I told a couple of creditors (Bank of America, Chase, Well Fargo, AMEX) that I didn't have the money to pay both my creditors and a bankruptcy attorney offers began to quickly come in. One card issuer offered me a $2500 settlement for a debt over $13,000. This was after I had retained my attorney and had just informed them of such.

                What I found odd was that while Chase had a collection agency calling me, they also were calling me themselves. There were also still mailing me letters. Bank of America charged off their debt and sold it to a JDB.

                It is important to note that every person's experiences are vastly different. There is no set in stone procedure used by the creditors but rather a playbook with a dozen plays to use over and over.

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                  #23
                  I just received a settlement offer from Amex, to pay 40% of balance in 24 payments of $800.00 and change.

                  I have not paid them in 16 months and don't plan on it. Paying tax on 30k makes settlement a non-option, especially with Amex being just one on my list.


                  I'll be filing BK soon as some income has dropped off.
                  getting so close to finally filing...

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                    #24
                    It's a funny thing, before BAPCPA in 2005 the creditors wouldn't settle, the debtors would just file their BK and be done with it.

                    Now because of the 6 month means test calculation and the likelihood of being forced into a ch13, debtors are dragging their feet about filing because they have to be careful and strategize about their income, the creditors get all pissy cause they have to keep calling and dunning you thinking you're really going to magically start paying again.

                    Then they throw these settlement offers into the mix, and it confuses things because:
                    -- if we got the settlement offer when we first got into trouble it might have been a good deal
                    -- but late in the game you're just pissing money away.

                    As the computer said in the movie War Games. "the only way to win is not to play"
                    filed chapter 13..confirmed...converted to chapter 7...DISCHARGED!

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                      #25
                      BELL "When I told a couple of creditors (Bank of America, Chase, Well Fargo, AMEX) that I didn't have the money to pay both my creditors and a bankruptcy attorney offers began to quickly come in. One card issuer offered me a $2500 settlement for a debt over $13,000. This was after I had retained my attorney and had just informed them of such."

                      How behind were you? Chase 2 months behind said 80% (yeah sign me up), now 5 months behind (65%). When did you play that line?
                      $70k- Unsecured Debt
                      $88k- Secured Debt (HELOC/2nd)
                      $200k- Land investment gone bad. (Land secured)
                      1st- $366k / House Value- $300k

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                        #26
                        Probably about six months or so. By the time I actually filed I had quit paying for 13 months.

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                          #27
                          Originally posted by Bell30656 View Post
                          Probably about six months or so. By the time I actually filed I had quit paying for 13 months.
                          Thanks...I think that might be my next move in about a month which puts me about 6 months...I think it might push them a little. I hope.
                          $70k- Unsecured Debt
                          $88k- Secured Debt (HELOC/2nd)
                          $200k- Land investment gone bad. (Land secured)
                          1st- $366k / House Value- $300k

                          Comment


                            #28
                            SO, if i stop paying a bofa cc,4500 and a chase,cc,4200 for about 9 months, odds are they will offer a low, low, settlement?, i have no taxable income, so a 1099 wouldnt be problem as as far as taxes, because i dont think i have to file until 8k or so of reportable income. BUT how would this show up on credit report?? as 9 months deliquent, and then settled?? will the other cc,cap one cancel meas is it under univervsal default even if i continue paying them? it has a low balance.

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                              #29
                              Yeah for the most part...

                              FROM ME (Yeah...I'm quoting myself, what of it ;) "Chase 2 months behind said 80% (yeah sign me up), now 5 months behind (65%). When did you play that line?

                              HERE'S AN UPDATE:
                              As of the 30th (few days) I will be 6 months behind...Chase just called and gave me 50%...when I said I couldn't, she dropped it to 45%. Still can't...so we'll see what happens next call.
                              $70k- Unsecured Debt
                              $88k- Secured Debt (HELOC/2nd)
                              $200k- Land investment gone bad. (Land secured)
                              1st- $366k / House Value- $300k

                              Comment


                                #30
                                Originally posted by junker View Post
                                SO, if i stop paying a bofa cc,4500 and a chase,cc,4200 for about 9 months, odds are they will offer a low, low, settlement?, i have no taxable income, so a 1099 wouldnt be problem as as far as taxes, because i dont think i have to file until 8k or so of reportable income. BUT how would this show up on credit report?? as 9 months deliquent, and then settled?? will the other cc,cap one cancel meas is it under univervsal default even if i continue paying them? it has a low balance.
                                It will say, settled for less.

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