Settling CC on your own instead of BK

[maxwell18]

Just wondering if any folks just quit paying cc and waited for them to settle at a lower balance interest and time period. The same as is these rip off companies do, but you handle it yourself. How long do you wait to see how low did will settle for. What has to happen in terms of conversation with the bad guys and what you say to make them make a offer. I don't want to file BK at least not at this time.

[LookingAhead]

I'm not much help, as we are going to retain our lawyer to file bk on Friday, but we stopped paying our credit cards mid December. In January one credit card company offered me a settlement over the phone when calling to get a payment from me. I couldn't believe it happened that quickly. This week I got a letter in the mail from one of the credit card companies saying they would settle for XXX amount and consider the card paid in full. We have about 30 cards, so just the 2 isn't much, but they both id it all on their own and faster than I had expected to get those offers. Good luck!

[paradiddle]

Its really no secret how to do it. It's all about their motivation and your patience. You cannot predict what any CC company will or can do. You can only read as many posts here and get a sense of what they have been doing.
Richard Gellar has some good info videos on You-tube on the subject. Debt settlement companies seem to all be rip-offs

#1 you will need Cash - don't bother to wheel & deal if you don't have the $$
#2 Patience - the longer you wait the more motivated they are to do something - 180 days is the basic cutoff so the 4-6 month window is where you might be able to so something. Don't try to make them believe its in their best interest - let them make the settlement offer.
#3 your Fico will be screwed - at least for awhile
#4 - don't answer the phone - at least for about 3 months
#5 - looking at the above post - I would look for settle all or settle none - I was lucky all my cards were with one bank.

The more basic question is (and others will chime in) - Is it in your best interests to settle or will a CH 13 BK be better for you? I had to answer that question and I chose to settle but I had certain things in my life that are not the norm. Most people

[DebtHater]

After 2 months Chase started with settlement offers (60%). The only catch was they refused to put it in writing.

If you do settle, make sure you get it in writing before sending any money. When the time comes that you would send money do it with a cashiers check and attach the check copy to the letter and keep it forever.

[flyinbroke]

All of mine have refused to put anything in writing and expected payment over the phone. None had offered settlements. All have offered reduced interest which really did not take much off. They claimed they would remove negatives too, but with nothing in writing they can (and will) deny deny deny.

Last payment for three was November, and two more entered in this month. One of the 3 monthers has a CA after me demanding payment in full. The others have sent "let's help you pay" emails.

[getmeoutofhere]

I have been in the process of negotiating settlements on my accounts. I have 29 total accounts (loans and cc). Out of those, I have had 4 sue. Of the 4, two are settled and paid off...the other 2 I am in negotiations with. I have an attorney to do the final settlement and paperwork to protect me (don't want them suing me again later for the same thing). My plan is to settle as the come after me...and so far, it has worked out ok. I have a ton of them with CA and those will probably run out of SL. I has been 3-4 years since I have paid on most of them so SOL is only a couple of years away....

[treehugger1]

Sounds as if your approach was similar to mine. I simply stopped paying and decided to see what would happen. When I look back to 2006, I had approximately 18-20 accounts. Six sued me (four local and 16 national.) Three local are paid off, and the fourth local is about 2/3 paid off, all of these through garnishment. My type of settlement, LOL. One of the national CC's has a judgment. I spoke to the attorney the other day. He said the creditor might request he go for a wage garnishment, but he didn't seem as if that was a priority at this time. He is from out-of-state and understands how the Oregon 90-day garnishment writ works. It can be a pain to keep reissuing writs when you don't know whether or not the debtor already has a wage garnishment against him/her. I'm guessing the firm is paid by the hour by Citi. I also understand that they can't add any additional legal fees to the judgment other than interest, the writ and service costs here. He was very pleasant to speak with. The other account (Crap1) just served me. This was an in-state attorney, and I'm sure they will risk the wage garnishment attempt. If they go for the default judgment, I'll call them and see what the possibilities are, or encourage them to go for wage garnishment. The more folks in the garnishment queue, the harder and more expensive it can be for the judgment creditor to play the 90-day game.

All the other accounts are 12 months to 32 months since last payment, some have been sold to JDB's and the others get bumped from one CA to the next. More than likely I'll also make the SOL on many of these accounts. The only account I really care about is the student loan, and they keep dragging their feet about garnishing the 15% they are allowed. I think I am approaching 400 days without paying on the student loans. I finally had to tell them that I refused to pay voluntarily. They quit calling me.

The only time anyone ever calls is when an account gets moved to a new CA or sold to a JDB. And then, they often apply the bully approach, not realizing I am immune to their antics. Sometimes I simply say, "I don;t care, sue me." The other day I had to tell one obnoxious caller to piss off and send me some written info within the five-day window allowed in the FDCPA.

[MarieT]

I am exploring settlement myself. Just have a number of factors to look at but the idea of doing Ch13 and being scrutinized for five years and also someone on here said that in a Ch13 the trustee garnishes your wages and both of those are not good.

I only have three cc accounts so not as onerous to deal with for settling. One of them I already have an offer in writing to pay $4,000 on a $20,000 debt so I think that is pretty good but I think they will go lower as they were fairly quick to offer that. I need to investigate how much (if any) we would have to pay on the 1099 for forgiven debt to make sure we would not be hit with a huge tax bill once we settled.

They did really balk at putting it in writing but I told them I would not even consider it unless they faxed ot over. Here is a site that has more info on settling as far as what to get in writing and also get it in writing how to have it worded so it is better on your credit report:

http://www.creditinfocenter.com/debt/settle_debts.shtml.

[MarieT]

Its really no secret how to do it. It's all about their motivation and your patience. You cannot predict what any CC company will or can do. You can only read as many posts here and get a sense of what they have been doing.
Richard Gellar has some good info videos on You-tube on the subject. Debt settlement companies seem to all be rip-offs

#1 you will need Cash - don't bother to wheel & deal if you don't have the $$
#2 Patience - the longer you wait the more motivated they are to do something - 180 days is the basic cutoff so the 4-6 month window is where you might be able to so something. Don't try to make them believe its in their best interest - let them make the settlement offer.
#3 your Fico will be screwed - at least for awhile
#4 - don't answer the phone - at least for about 3 months
#5 - looking at the above post - I would look for settle all or settle none - I was lucky all my cards were with one bank.

The more basic question is (and others will chime in) - Is it in your best interests to settle or will a CH 13 BK be better for you? I had to answer that question and I chose to settle but I had certain things in my life that are not the norm. Most people

What is not the norm? Might be my norm...

[scsurfer]

I'm playing this settlement game...I've have 2 unsecured debts (retailer CC's with HSBC) and 1 secured debt (ATV loan with GE Money). About 3-4 months of no payment on all 3, and all 3 still with OC. When I was in good standing and making monthly payments all 3 raised the rates above 20%. I tried calling them numerous times to get the rates lower or get some sort of break, to no avail.

My credit is already trashed from a foreclosure, so I saw an opportunity and decided to take advantage of it. So, I just stopped paying on all 3. I answer the phone once every 3 weeks (it's a dedicated line with an answering machine and no one else uses it) just to check in with them and have some fun while I wait for settlement offers or for it to go to a CA.
So the first settlement offer came via mail from HSBC about a month ago, which was for 30% debt reduction with the balance paid out over 6 months. I ignored it. The next letter came this week for 40% reduction. I called them back told them I could do 60% debt reduction with balance paid over 6 months. "Computer doesn't allow me to even go that low"...the friendly representative on the other end told me, "Oh well have a nice day" I said.

I plan on countering all offers with a low ball offer and see if I ever get any bites. I'm sure they'll go to collections eventually and I'll just continue the game with them. I know I could eventually get sued but I'm just about collections proof, no property of any kind, can't garnish wages in my state, very little cash ever kept in the bank, etc. And since my credit is already in the chitter, I could care less about that aspect.

[LostNFound]

We stopped paying all of our CC's in Feb 2009. We have 5 cards total (4 with XXXXX and 1 with XXX). Our unsecured CC debt is about 100K. My husband doesn't want to file bankruptcy. He's holding out for settlement or something other then BK. I am self employed so my income is hardly anything on paper and we've shown over a $25K loss on our rental business for the past 3 years.

BK would seem like the easiest solution to our problems. However, we just had our tax appt today and our accountant is encouraging us to try to settle. We are getting a big return and we have all of our properties up for sale--hoping to make a small profit with that. She says that we would have no tax issues because of being insolvent at the time.

We could possibly have 20K in a few months if we can get a property sold (we are working on contracting with the buyer with some money down).

DO WE TRY TO SETTLE?? It seems like everything I've read, there is very few HONEST settlements out there. I want to get on w/my life and I would rather file and lose the properties that aren't cash flowing anyway. My husband says he's a gambler and he's willing to hold out for as long as we can.

I'm trying to prepare myself for the worst results of this decision to do nothing. We have not been taken to court. I have rec'd 2 collection letters (one in my state and one out of my state). I asked for debt verification on both of them and I've never heard from them again. I do believe that the one in my state is still with the original creditor. That letter came from a law firm w/the original creditor listed on the claim of 23K. I just sent them a dispute 2 weeks ago and I'm waiting to see what happens. Most likely, I'll end up in court and I'd like to settle before it gets to that point. Wondering if I push it to the courtroom steps before negotiating? Or see if they contact me again...

There is so much to understand in all of this, it's hard to know what the right decision should be. I am so confused!!!

[holycrap]

Just wondering if any folks just quit paying cc and waited for them to settle at a lower balance interest and time period. The same as is these rip off companies do, but you handle it yourself. How long do you wait to see how low did will settle for. What has to happen in terms of conversation with the bad guys and what you say to make them make a offer. I don't want to file BK at least not at this time.

My wife and i are going the settlement route. After meeting with our attorney and figuring out we could not afford our paymemt we decided to hit the cards one at a time until they are all gone. We have over 20 cards and 150K+ in debt so it will take all 5 years anyway. Just won't have to pay the trustee his 10%.

We paid off two small cards at 65% in Feb. We are going to pay off the discover at 53% this month.

My wife wants me to put a chart on the wall so she can cross them off as we go.

[LostNFound]

Just curious, how did you learn to negotiate with the credit card companies? I have read may ideas about how it's done, but always conflicting stories. I'm not too sure which to believe. For example, do you ask for a supervisor when you want to negotiate? or do you mail them a letter? I'm sure that being nice to them will help, but I'd really love to settle for 20-30%.....ha ha! I know, I know...but I can afford that soon enough!

[DYLAN150]

Just wondering if there is any kind of time limit on settlement? How long will the credit card companies wait for there money? What about the tax issue?

[HHM]

Just curious, how did you learn to negotiate with the credit card companies? I have read may ideas about how it's done, but always conflicting stories. I'm not too sure which to believe. For example, do you ask for a supervisor when you want to negotiate? or do you mail them a letter? I'm sure that being nice to them will help, but I'd really love to settle for 20-30%.....ha ha! I know, I know...but I can afford that soon enough!

When doing this yourself, there really is no "negotiation" that happens, or it is more like phantom negotiation. The debtor does no have much leverage, the collection agency or creditor ultimately has its bottom line. About all you can do is say...
"I have $x amount, I can send you a certified check in 4 days in exchange for a full accord and satisfaction of the debt, in writing." They will either say yes or no. All you are trying to accomplish is get to the number at which cash now is more valuable to them than cash later. If they say no, you wait.

Using attorneys to settle can create more leverage because in that scenario, the attorney can leverage FDCPA violations. (private DS companies cannot do this). The attorney and you will begin cataloging and manufacturing the violations and use that to create leverage to motivate the settlement. This tactic is not very good on your own, because the odds of an individual brining this action pro se or so low that the CA considers it a bluff.