My experience with settling with original creditors!

[mokaye]

Hey guys,

This is my first post and I really wanted to share my experience with you. I have about 30k in credit card debt, no house note, no car note, no other bills other than credit cards. I was always one to have stellar credit in the high 700s, for all of my credit card life, up until recently.

To give you a little bit of history, I had a tubal pregnancy last year and had emergency surgery with bills totalling up to $30,000 and had to pay about 10,000 out of pocket for things not covered by insurance. With that said, I paid the minimums on my credit cards. At the time I had about $22,000 on credit cards. My mistake was paying the hospitals out right and instead of paying down my other debt. Long story short, I have $30,000 in credit card debt.

After a lot of research, I contemplated filing BK but I kept thinking about the stigma of doing so with it being on my report for 7-10yrs. I even went as far as talking to an attorney, told her to proceed, but then backed out about 3 wks later. She of course, took my $900 that I gave her to start. I finally started not paying on my 3 Chase credit cards and Discover card. (I'm 4months late.) 1st card balance was $11,800; 2nd $10,894; 3rd $6797; Discover was $4900.

I called 2 months ago and Chase offered 85%settlement. Yesterday after 4 months late, the guy offered 50% on first, 65% on 2nd, 85% 3rd account. Today, I talked to a different person (female), telling my sob story once more and I got the first 2 accounts down($4153 & $3811) to 35%, 3rd account to 50%. I was like YES. I can afford that at least on the first 2 accounts. So, they agreed, I agreed, my payment is due next Friday. They will remove the late charges and have it on my credit report as "settled as agreed" 0 balance, with no lates. In regards to Discover, after being late only 2 months, it was sent to collections. I settled with that account for 1500 and the original balance was $4900.

So for those who file BK, I know you're probably saying I could have saved my money, however, debt negotiation with the creditor was the way I felt was best for me. Even though it will cost me about 11k in lump sums.

[Jackdog]

Your credit is still trashed you know this right?
BK or no BK My boyfriend never filed BK and settled with all of them but one and had a credit score of 500 something when it was over. It took him 4 years to get it back into the 700 range.
Make sure you get all these settlements in writing. You're agreeing to throw money at them when nothing is in writing doesn't mean they will follow through with anything they tell you on the phone.

They don't care about you or what you've gone through. They want what you owe them. Get everything in WRITING. They will take your money sell what you owe to another party if you don't. I hope you aren't giving them checking account info.

[mokaye]

Yes, I do know my credit is down the drain right now. That's no biggie and isn't a surprise since I haven't paid my bills. It will take a while for me to rebound from this, I already know. Like I said, I've done my research and I already know what happens. I know everything needs to be in writing and I am getting that today. I doubt it will take me that long to get my credit back in the 700s but thanks. I already have a game plan to get it back up.

Just sharing my experience that's all.

[Jackdog]

I really hope this works for you. I owe less than you on my cards (same creditor on a few) and none of them have been willing to settle. They just want their money. Also make sure you get a signed release. Wish you luck, but to me, you're stepping into an area where you owe people money and they want what you owe them not half of what you owe them. Like I said I hope this works for you but all the stuff I've read tells me you will never get the agreements you made over the phone with the OC's in writing.

[mokaye]

I have faith that it's going to work for me and thanks for the vote of confidence.

I'm not sure if you've been in communication with the creditor, but you may want to call them before they call you. How late are you?

If you want me to guide you on what to say I can.

[onthebrink]

Thank you for sharing this information! I am also going down the DS path instead of BK. My wife and I have 13 cards with a total balance of $125K. We are hiring an attorney to help negotiate with the CC companies. We also have 3 cards with Chase. Glad to hear that you were able to settle with them. I just read another post that mentioned that they sued after only 4 months, so I am pleasantly surprised to hear you had a completely different experience and hope/pray we do as well.

After Chase offered 85% settlement and you refused, did you wait two months to re-contact them or did they contact you when you finally got the 50% settlement?

[Jackdog]

I think hiring an attorney to help negotiate settlements is very smart. With all the lawsuits I've read about from Chase and Discover I don't see them willing to wipe out 50% of what you owe them being a few months late.

[researchmode]

Good for doing what was best for you. BK is not the ideal solution for every single person. If you feel good about what you did, then bravo!

Best of luck to you in the future.

[dscurlock]

I have faith that it's going to work for me and thanks for the vote of confidence.

I'm not sure if you've been in communication with the creditor, but you may want to call them before they call you. How late are you?

If you want me to guide you on what to say I can.

If you go through settlement, make sure it is all in writing,
otherwise their "word" means nothing. They will turn on
you in a heartbeat if it is not in writing.

as another poster has stated, your credit is "sunk" why
spend all that setttlement money when you can just
spend a few hundred for BK and start over?

I do not think I would file over 30k just yet..that amount is so small in
comparison compared to others...

[Patch]

won't you have to pay taxes on those forgiven debt next year ?

[Jackdog]

If you go through settlement, make sure it is all in writing,
otherwise their "word" means nothing. They will turn on
you in a heartbeat if it is not in writing.

as another poster has stated, your credit is "sunk" why
spend all that setttlement money when you can just
spend a few hundred for BK and start over?

I do not think I would file over 30k just yet..that amount is so small in
comparison compared to others...

That's what I was wondering. But if they are able to come up with the 1000's of dollars the credit companies are willing to settle for they may have assets that wouldn't be protected in BK. I'm in debt less than 30k well add my house that I'm keeping that puts me at 100k almost. I can't afford to settle. I really do hope they get all this in writing though. My attorney told me about a client 72 years old that spent almost all of his retirement to settle the debt only to have them or collection agency that bought the balance sue him for remainder. Even if I were in a financial position to settle, I'd still hire an attorney.

[catleg]

I don't quite understand why they settled with you, it appears you have access to money to make payments.

[flyinbroke]

I don't quite understand why they settled with you, it appears you have access to money to make payments.

My thoughts as well. If, for example, you have 10K to settle a 20K debt, why could you not make the 400 dollar payment?

[mokaye]

Yes, I will receive 1099 forms from Chase to report to the IRS. This settlement will be considered income. However, I rather pay the interest than pay the actual amounts owed. I have the offer in writing directly from Chase (recieved it at 3pm yesterday via fax) will all of the information I listed above in my original post. The point of my post is to show that you can actually settle directly with the original creditor and not waste money using a settlement company. Also, it's not hard to negotiate like some websites have said.

[mokaye]

I don't quite understand why they settled with you, it appears you have access to money to make payments.

They settled because they rather have me pay them directly rather than sell my debt to a collection agency and get pennies on the dollar. So it's more feasible for them to take a smaller loss with me, than to sell my debt and have an even bigger loss.