One Final try before BK. Plz Critique my final settlement letter (short!) thx

[slvnomore]

One Final try before BK. Need wise advice on my settlement letter plz.

Have an offer of 30% from this bank 1 (30K T)
and 40% from the other. bank 2 (16K T)
Both OC
They are both about to be charged off. And say this is my last chance.

My intended result is to make one last offer before i may have to BK7.

This is my counter offer of $2000 to bank 1
I have researched and done my best.
But I am scared I have left something crucial out.
and I dont know what happens next.

all constructive comments, tips, suggestions, welcome. Crzy : )

-------------------------------------------------------------------------------------

Attn: XXX BANK Customer Service Name(s) on account: Account number:

To Whom It May Concern:

I am undergoing unbearable medical and financial hardship.

For over a year I have been caring for a loved one on feeding tubes, and another in excrusiating chronic pain.

I have no assets

· I am self-employed

· I am out of work and business is terrible

· I don’t have anything left to sell or anyone to borrow from

· I am undergoing multiple serious medical and financial traumas.

· I am broke - and trying my best to stay out of bankruptcy.



You will note from my credit history I had perfect credit for 17 years. Never missed a payment. I worked so hard for that. Now that is all gone.

You may think it can't happen to you, that's what I thought too.

If you have ever experienced series of unexpected events that takes away everything you worked for, or a season of multiple, serious loss, almost beyond words - I am sure you know what I mean. I am doing my best to take care of my family as you would too.

As you informed me, If we settle, I understand you may have to send me an IRS 1099C for forgiven debt and I may have to pay taxes on the amount forgiven as income. that of course makes this even tougher.

I appreciate your offer to settle of 30%. = ($9,000) However, If I could pay anything close to that much, I would not be in this position.


Here is my reasonable, realistic, respectful, settlement offer:

1.1 I agree to pay XXX Bank $2000.00 dollars in total. XXX Bank agrees to accept that payment as settlement in full for all claims and demands associated with these chase accounts, known or unknown. The balance of the Total is forever discharged and SLAVENOMORE is no longer liable for this balance or any charges, penalties, interest or fees associated with these accounts.


2.1 Any remaining balance will not be sold or transferred to another party and $2000.00 is settlement in full for all claims and demands XXX Bank has against SLAVENOMORE arising out of XXX bank Accounts #1,#2, 3. XXX agrees to forever waive all claims, will not sell the balance off, and agrees that SLAVENOMORE is not liable to them for this debt, and the $2000.00 is full and final payment.


3.1 The amounts will be marked in one of the following ways in order of prefference:

A) " Paid as agreed"

OR

B) All negatives will be removed from the trade line.

OR

C) Trade line will be deleted entirely. You will submit a Universal Data Form or similar document to Experian, Equifax, Transunion, and any other credit-reporting agency to which you reported this account, deleting the entire account/trade line.

4.1 If I am sent a 1099-C. The forgiven debt IRS 1099-C will be mailed after Jan 1st 2013 so that all 1099-C’s are in the same calendar year.

5.1. SLAVENOMORE agrees to pay the $2000 in payments as stated. They will be paid over 90 days as follows.



1/1/13: 33% of payment of $667.00 Made out to XXX Bank.

2/1/13 33% of payment of $667.00 Made out to XXX Bank.

3/1/13 33% of payment of $667.00 Made out to XXX Bank. ( FINAL PAYMENT IN FULL.)


If my offer is acceptable to you, please initial the accepted proposal, sign the acceptance below, and return this letter to me in the enclosed envelope.


Agreed to and accepted on this 25th day of Oct 2012

Sincerely,

Signature: ________________________


Name: SLAVENOMORE

Address: FREEDOM TOWN USA

Phone: I -800- OFF THE GRID

Date: October 25, 2012

__________________________________________________ _____________

AGREED TO AND ACCEPTED ON THS -___ DAY OF _________, 2012



BY: __________________________________________________ _______



NAME: (PRINT) ______________________________________________



TITLE: ______________________________________________

[bcohen]

I am sorry to say it, but attempting to settle these debts is a terrible plan. First of all, it is extremely unlikely that either creditor would be willing to accept the amount you're offering. The banks know that they can keep the account on their books long after charge-off, and load the balance with fees and interest for a year or more, before selling it to a junk debt buyer (JDB). Second, and more importantly, you have two (or more) separate creditors. Even assuming that you are successful in settling with one, I can guarantee you that the other(s) will think you have assets to go after, so instead of settling, they'll sue. In that case, the money you paid to settle--as well as the taxes on any "forgiven" portion--will be wasted, because you'll still have to file for bankruptcy. In any case, your whiney letter isn't going to have the effect you desire.

I can tell you from personal experience--credit card companies couldn't care less about your personal problems, lack of employment, etc. All they care about is if the payments are flowing in or not. Back in 2009, before I defaulted on all my debts, I attempted to negotiate with my creditors to lower the monthly payments and reduce or waive interest because I had suffered a huge loss of income. The creditors did not care. When I actually quit paying, and let the accounts go 30-days late, 60-days late, etc., I again attempted to negotiate with my creditors to stop charging interest and fees, and allow me to pay a lower amount until I got back on my feet financially. Only Citibank was willing to do this. My other creditors refused to provide any sort of hardship payment plan which would stop the balance from going up. I mentioned the fact that I might have to file for bankruptcy, and the creditors did not care. I decided to stop throwing good money after bad and let all the debts charge off.

My advice is to quit paying, let the debts charge off, and deal with the possibility of a lawsuit by filing for bankruptcy if and when you have any assets or wages that are worth protecting. Right now, you and your "loved one" are having medical problems, which means that you might end up accumulating more debt which you'll need to discharge. Assuming that you do not own a house, or are "underwater" on the mortgage, you are currently "judgment proof" and therefore, it is not in your best interest to settle your debts, or to file for bankruptcy at this time.

[slvnomore]

First of all thank you so much for all advice. I am new at this. They have already offered to settle for 30%, & 40% this was a counter offer before charge off to the OC. Why would they rather force me into BK and get nothing. rather than $2000? help me understand that? is there a threshold amount they make more in charge off on under which they wont go? I have no assets and qualify for the means test. thank you for your constructive feedback it is appreciated. if i do send the letter have I forgotten anything in the form I have written?

[keepsmiling]

Why why why is right. BECAUSE THEY DON'T CARE. You know that thing about corporations being people?? They AREN'T.

You have nothing to lose by writing the letter. Just be realistic about your chances. Which are slim to none.

Believe me I understand where you are coming from.We are in a similar position- self employed, broke, old cars... etc. It took two years before we were sued. You may very well have as much time or more.

[slvnomore]

Good points! Thank you so much for your replies and expecially humor and perspective! So, as I understand it. if I have nothing to lose by sending it. Is there anything I left out in my letter that I should add? thanks again for all your help! ; ) SNM

[slvnomore]

BTW is this the right forum to post this in? or should it be the bk7 forum? want to be respectful... : )

[frogger]

Stop playing the games and prepare to file bankruptcy when the time is right.

Your "offer" is not reasonable.

[TheBajan]

Hello,

You obviously put a lot of effort into creating a very professional and thought out offer. I KNOW you are emotionally attached to making this attempt b/c of the work you've put in to it. I've been there, done that. However, there are several assumptions you have made that are faulty.

1. You are assuming that your professional presentation will matter at all to your creditors. The truth is, they will read it and have a good laugh.

2. You are asking them to settle your debt at six cents on the dollar. They can sell it to a junk debt buyer for that much so it's not anywhere near reasonable to them.

3. You are assuming that they will treat you with the dignity you are trying to display. They won't.

The advice you are receiving here is sound. You are currently judgement proof (based on the info you've given). Let the debt default, take care of your family, and begin planning for BK. Wait until you actually have to file b/c as it's already been pointed out, you are still incurring medical debt that you may need to discharge later.

It's true that you have nothing to lose by sending this letter.... except for time and disappointment. This is one huge emotional ride that none of us want to be on. Please, for your own emotional sake, don't waste this time. Tuck this away as a valiant attempt and be proud of yourself for the work you put in to it but don't waste another second of your emotions or time with this attempt.

Please stick around and keep us updated.

Best regards,
The Bajan

[justbroke]

There are very few reasons to ever settle when bankruptcy is an option. I don't see any reason in this case to settle. Settlement, as already shown, creates other problems as well. The only people who settle are people who have the money and did it strategically for some reason. The super-majority of people really can't afford to settle.

[keepsmiling]

Dang Bajan you write a lovely post!
Been meaning to ask... are you pronounced Ba-han or BAY-jan??

[GoingDown]

I can tell you from personal experience--credit card companies couldn't care less about your personal problems, lack of employment, etc. All they care about is if the payments are flowing in or not.

From your personal experience, that is what happened to you.

But in my experience, once they found out that I was judgment proof, none of my creditors, nor the junk debt buyers EVER filed a lawsuit against me.

Capital One did sue me, but they sued me almost immediately after I stopped paying them, and before I had any knowledge about what to do about them, and certainly before I sent them one of my letters explaining my judgment proof status, and the fact that I knew they couldn't do anything to me, even if they got a judgment against me.

Since then, NOT a single one of any of my creditors or junk debt buyers has sued me.

That's my personal experience.

Every person is different, and your situation may be different from mine, and you may experience a different outcome, but to suggest that creditors don't care about wasting their money on a lawsuit when they know the person will not or cannot pay them back is just plain wrong.

Otherwise, I would have been sued about 20 or so times by now.

Instead, ALL of my credit card debts are BEYOND the statute of limitations. Even the one Capital One judgment is worthless at this point, since they did not renew it during the 5 year period under Arizona law.

So, it can be done.

If you are truly judgment proof-- no assets, no wages to garnish, no real estate to put a lien on, and no checking account, etc., and if they know you don't have any of these things, it would be foolish for them to come after you.

And please keep in mind that saying any of this on the phone to a debt collector is a waste of time. The people on the phones most likely just got out of prison and couldn't find any other job to do, and they are the lowest on the totem pole. You have to send it in the mail for it to get to right people.

[justbroke]

But in my experience, once they found out that I was judgment proof, none of my creditors, nor the junk debt buyers EVER filed a lawsuit against me.

I don't think you two are saying different things. Creditors do want money. They don't care about your problems. They will likely do make an asset determination. They will proceed or not proceed based on whether you are "collection proof". (I don't like the word "judgment" proof since that would mean they could never win a judgment.)

And please keep in mind that saying any of this on the phone to a debt collector is a waste of time. The people on the phones most likely just got out of prison and couldn't find any other job to do, and they are the lowest on the totem pole. You have to send it in the mail for it to get to right people.

Now that I have actually had my bankruptcy discharged, I love when people try to collect the old debt. I actually get to tell them to "shut up and listen very carefully!"

[TheBajan]

Dang Bajan you write a lovely post!
Been meaning to ask... are you pronounced Ba-han or BAY-jan??

lol.... BAY-jun

[pamkev]

Great Post Bajan!

OP I totally agree with the others the letter is a wasted cause. When I tried to work it out with one of our cc companies the payment was lower by $6.00.

[slvnomore]

I want to thank you all so much for all the different opinions, It is really opening my eyes. as I said I have not sent it yet, If ever, as I am still learning. Thanks for answering my questions. If they have offered 30% (9K) and I counter offered 2K, you say they would laugh at me becuase they can make more in a charge off or with a JDB. Then what is the amount that you would offer for it to be taken seriously or as you say a reasonable offer? Also if i have no assets,home,and am self employed, however i do have checking accounts and pay pal, how does that affect the collection proof status please? ; )