Settlement Approved! HELP!!!

[BKINAZ]

Our three chase credit cards out of the blue settled with us today at 30% (65% two months ago...45% last month...they told me they as a company NEVER go under 35%. (we are now about 6 months in...110 days?)

At any rate we have 10 days till our first payment (3 payments...1 per month)...

MY QUESTION:
For those that know...what should I ask for to be reported on my credit report? Right now...they are telling me that it will record as "settled". Is that suicide? Don't get me wrong...we will have bad credit for along time because of other reasons...I still want to be the best that I can ask for, so any help would be great! (Thanks)

Lastly...I know many and in fact most "veterans" on this site think that settling is really stupid...but it works for us. We have the on hand cash to do it...and we will still have enough in the bank to have fun. We are settled with our mortgage mod ($900 cheaper mortgage) and the Deed in Lieu on some land we own is done next month.

I know that it will be reported as a 1099...doesn't matter to us because at this point and time...we are insolvent. That won't be the case at the end of the year...so the time is now.

Please help if you can with the question...btw...it is CHASE.

[HHM]

The whole idea of negotiating the credit report entry is if'y. Keep in mind, under FCRA the banks are obligated to report "true" information. So, the settled entry is a true entry. The tricky part is, if they will agree to report it as Paid, or Paid as Agreed (which they wont, but you can try), can you actually enforce that agreement if they still decide to report it as settled. After all, in contract law, a contract term that would require a party to violate the law is void. In this case, the bank would technically be violating FCRA by reporting Paid as Agreed (even though the entry is to the consumers benefit).

You have to realize, with any debt solution aside from simply paying the debt in full, you will take the lumps on your credit.

[BKINAZ]

I do get that and like I said...with a deed in lieu...we are pretty screwed. But I will take a shot at the "paid as agreed"...but I think there is another term and that's what is escaping me right now.

[catleg]

That's interesting. I had BofA call and offer to settle my "business account" for 10 cents on the dollar of the inflated current balance, maybe 13-15% of original. But Chase was sticking around 50%. So is Discover, they are pretty nasty too. All of these are around chargeoff time, though I think BofA is post chargeoff, which appears to be the best time.

[BKINAZ]

Okay that's interesting too. My wife wants this over and done...I think i could hold out for 20%...but then I run the risk of it being charged off or starting over with a collections agency, garnishment or whatever...so to us (I'm a gambler, I'd wait). But lets be real...we ran up the cards...I can't pretend to be a victim.

I have one more card left...that's BofA. They have been the nicest and the weirdest. I got a call from them (4 months behind) late last week.

"Just checking to seeif you can make a payment or are you in the same position?"
"We are in the same position"
"Okay thanks" click.

Very nice...but only like the 3rd call in 4 months.

[njguy1972]

I have been quiet the past 2 weeks because I have been offered settlements form cards.

Once this is done I will make up a post explaining my situation and why it is best for me. i had 10k in cash sitting in my bank from a tax refund and small bonus.

Here is my experience.

(Visa) Had 1 creditor settle 28k for 15 cents on the dollar because it was a week from charge off and the collection agency wanted something from me before they lose out and it goes to the lawyers.

(Discover) Had a tentative agreement 3 months ago for 32 cents on the dollar for $4800 but did not pull the trigger at my lawyer's urging that I needed to settle with all or none. Ended up settling at 45 cents on the dollar. They were very upset ove rthe fact that I did not pull the trigger initially and was demanding 100% or nothing until I worked them down a little. Pver the 3 months the balance went up $00 because of interest and fees.

(Amex) Have 2 cards with them and they went to 2 different CAs. My lawyer was offered 35 cents on the dollar for 4800 a couple of months ago. He did not accept saying we did not have the money to settle all at that time. Now they offered me 43 cents on the dollar. The balance rose $350 in the 3 months from the initial call. The 2nd Amex just got transferred to a new CA that claims AMEX will not let them settle. Since the 1st CA settled this is obvious BS that I can call them on.

(Mastercard) I spoke to the CA and he said he can come down to 30 cents on the dollar. Now I just need to raise that money.

My advice:
-Amex is tough. I read they refuse to work with credit counseling companies. If you can get them below 45% and can afford it, then take it.
- Discover will come down to about 30% if you are not right at chargeoff.
-Bank Visa will come down to 30% and then 15% a week before chargeoff.
-Bank Mastercard is similar to Visa.

If you start negotiating and do not accept a good offer (less than 40 cents on the dollar), you may find it tough to get later on. Many of the CAs do not own the debt but work as an agency for the bank. That means they have limits on what they can settle for. 30 cents on the dollar seems the lower limit that most are willing to offer.

Be advised you have taxes on the forgiven amount. For me it is 28% for federal and 6% for state. The total I will pay will be less than my lawyer said my bankruptcy would be.

Example:
If you owe 50k on your cards and settle at an average of 35 cents on the dollar then:
You pay $17500 for settlements
$32500 is forgiven
Taxes will be around $11000 (depending on your state and bracket)
Total paid would be: $28500 for $50000 of debt (57%) which is good if you are looking at a 100% chapter 13 payback but not good if your payback is below 60%.



My deal is not done yet so do not congratulate me yet. Plus what I am doing is not right for everyone on this board. It is right for people who have access to money through bonuses, tax refunds, family, and other sources.