Just a commentary

[leftyf]

Strange that I received an offer today from Discover to knock 60% off of my debt as a settlement (on about $20,000.00.) I have never answered one phone call from them over the last 7 months...
but they offer to let me off the hook for $8,000.00, saving me $12,000.00? They have been bugging the crpp out of me for months with 10 calls/ day.

Meanwhile, CITI, to whom I owe well over $30K, sends me an offer to reduce my debt by $412.36? That's not even one week's finance charges! They really don't call that often.

It's strange to think I am already getting debt settlement offers, but it's way too late. I am amazed at how differently these two companies are handling the situation.

Lefty

[keepmine]

At about the 150 day mark of my default{s}, I received an unsolicited settlement offer of 45% from Chase and 50% from Cap1.

[ssdsco]

Just curious. Are you judgment execution proof ?

[WantToBeDebtFre]

Bank of America wouldn't settle with me at all. They even knew I was planning on filing bankruptcy and they still wouldn't even offer a penny off the amount. That was after 3 months of not paying. I think they all must handle it differently.

[CATCHMEIFYOUCAN]

You do realize IF you settle for less, you may still be liable to pay taxes on the amount that was written off? Someone correct me if I'm wrong. Meanwhile the creditor gets to write thew whole thing off!

Best to you all, Catchmeifyoucan

[leftyf]

I wasn't really entertaining the offer from Discover...I have way too much debt overall and I don't think a lot of them will negotiate. As I mentioned above, Citi offered me $400.00 off of $30,000.00+ in debt...what a dumb-a@@ offer. Why would I even consider that?

As to being judgement proof, I don't think I am. I don't really have any assets, but I do make a decent wage...about $10K above median. I think they could garnishee my wages if they want to pursue it. I'm in Ohio and I'm not sure where we stand on garnishments, but we seem to be relatively hard on debtors so it is probably easy to get one if the creditors want to get it.

[treehugger1]

These are good posts. Citi is pretty hard to work with. The best I could get was 0% with $100/month payments and no additional late or limit charges. This is worth the $100 per month on this $10K debt while I continue to sort out my situation.

BOA/MBNA gave me approximately 1.9% on a total of $8500 and a five year payment plan.

I recently signed an agreement with a local credit union on $5K credit card debt for a five-year payment plan @2%.

I have another $7500 at a different out-of-state credit union that would not work with me, but have now agreed to take $50 per month for six months. At that point, if things are looking up, they will re-establish the account as paying as agreed. If I can't, then they will send it to outside collections and I should expect a lawsuit.

CapitalOne has been extremely difficult. I'm in a "hardship" program and need to make a few months of minimum monthly payments. I think that once you are in the program they begin to roll back overlimit charges and late fees. I guess I'll find out sometime after the first of the year. It is interesting CAP1 sent you a settlement offer. That's the first I have heard of CAP1 offering anything.

The only thing I have that anyone can attach is wages but other than that I have no assets available to satisfy a judgment. My state only allows a wage garnishment of 25% to be valid for 90 days. Then the process has to start over. You can imagine how long it would take for a large creditor to be satisfied. The writs all get backed up in the queue, first in time, first in line. When one writ expires, the next in line begins its 90 day period. The expired writ can be resubmitted by an officer of the court but now it is at the end of the queue.

I was even bold enough to go to our payroll officer who handles garnishment writs and they told me how the process works at my place of employment. It sounds as if our payroll office is right on top of things and follows the exact letter of the law. They should as I work for a state agency. LOL. They asked if I was expecting a writ, and I said there was a solid possibility in the future. I asked if they would call me if a garnishment writ comes in, and they said they would call my office immediately if one comes through. You have to love it when people can all "get along."

When I first realized I could have my wages garnished, I felt really sick and worried. But, the more I checked around, the more writs I realize folks have against them. Wage garnishment for debt collection is only one reason for garnishments. There are plenty of others who have wage garnishments for other reasons.

I believe all of these things come into play when a creditor makes a decision related to any type of settlement. If you have been paying on a maxed-out credit card with a large sum for years, perhaps the creditor wants to stall as long as possible in order to see if you will recover.

Keep the settlement posts coming. This is valuable information. Expecially when one hears that "so-and-so" won't offer any type of special payment plan. The more i know, the more I can tell a creditor not to "lie" to me.

In the next 1 - 5 years, I'm guessing we see more avenues offered by creditors.

I have not declared BK, and I'm still in control of my monthly income (not a trustee,) and my debt is slowly going down. Can I suffer through this? Only time will tell.

[treehugger1]

Lefty, Can I be so bold as to ask what your total unsecured debt is?

It sounds as if your situation is similar to mine. I have $55K or so in unsecured debt, and another $75K in student loans. I am way above the means test income, owe more on two cars then they are worth, and have no house. I keep stuffing a bit of money in my protected tax-deferred retirement accounts. I ddi get a bit ahead of the curve by trying to work with creditors within 90 days of non-payments. So far things have worked out, but I am growing tired.

Can you survive on 75% of net take-home pay? I believe I can, but I'm not quite ready to test those waters yet. I'm going to keep working at this until next summer (another 9 months) and see where I stand at that time.

[leftyf]

treehugger, I'm at about $107K unsecured, no student loans. I make about $80K/year for a family of 5. I don't think I can survive with my current cost structure at 75% of take home, but I hope to reduce some expenses after I get the bk over. The two cars are not extravagant, but I am still slightly under water on both of them. I have a few expenses that I could probably reduce now, but I haven't since I am trying to file a 7. I could get thrown into a 13, but I'll probably end up missing my first month's payment (yes, seriously.) This median income thing is a joke.
I am still contributing to an IRA monthly, but I think I will stop that soon since we can't even balance our budget.
That's the facts.

[leftyf]

One thing I forgot to mention that was kind of funny...Discover sent me two "free" 60 minute calling cards. If I decide to use them, I am automatically accepting their settlement offer...what the? Don't they know I don't use the phone...I've never answered even 1 of their collection calls.
Oh, well.

[woeisme]

lefty,

I am also in Ohio, the Columbus trustee is handling my CH 13 case. So far I have found them to be extremely reasonable (knocking on wood!) I had my 341 last week and they are letting me pay my student loans outside the plan (some require you to stop paying on them for the 5 years, and you rack up huge interest fees in the meantime) and pretty much just accepted all the numbers that my lawyer submitted, and she had set it up for as much "wiggle room" as possible for us. They also said we could keep tax refunds unless they are over $6500! Of course it's not confirmed yet, so the trustee could still object to our payment plan, but so far it's been much less horrible than I imagined it would be. And I think the trustee's cut here is only 2.9% or something really low like that!

[leftyf]

woeisme, I'll be in the same district as you. The lawyer said that Northern Ohio is much worse in terms of fees...like 10% or so. I hate to get personal here and I don't know how much you know about my situation, but did you try to file a 7 first? That is what we and our attorney are planning...I am about $7K above median for my family size. Did you even try for a 7? Since you're in the same area, I may need to private message you if you don't mind. I don't have assets, but I do have a decent income.

That is a lot of tax refund to keep! One thing I am trying to do is make my payments outside of a garnishment assuming I am forced into a 13. It's good to hear the trustee in the area is reasonable, just in case. I don't want my work to know about it if possible.

Lefty

[AMISLANDER]

You do realize IF you settle for less, you may still be liable to pay taxes on the amount that was written off? Someone correct me if I'm wrong. Meanwhile the creditor gets to write thew whole thing off!

Best to you all, Catchmeifyoucan

THIS IS SO TRUE!

I settled with one of my mastercards back in 2003, before I realized that I would, indeed need to file BK.

Stupid me. They added like $5K to my tax return of earned income.

If you're going to file BK, watch out on this one!

[woeisme]

Lefty,

I didn't try CH 7 at all, so can't help you with that. Between my husband and I, we make about 90-95K combined, and only have 1 dependent, and all our debt is consumer (mostly credit cards, although some medical and other) so I didn't really think we had any option for a 7, and my lawyer pretty much said we'd need to do 13 because we're about 40K over the mean.

We filed in September, just had our 341, and are now waiting for confirmation, with a 65% payback plan to unsecured (no secured or priority debt other than the lawyer fees that were included.) We own our two vehicles outright, and have a pretty low morgage payment (~$700 a month, including taxes and insurance) so that left us with a lot of disposable income, so it's not just income, but also low non-debt expenses that forced us to a 13. In retrospect, we should have bought new cars several months before filing, but if the trustee keeps to our proposed monthly payment of $1100 per month for 59 months without an objection at confirmation, we'll be ok even there I think, since the past two months on the CH 13 BK budget we've actually been able to save $300+ each month and we haven't even really been penny pinching as much as we could be, so by the time we get our tax return added to that, we'll actually have a decent emergency fund for break-downs, etc. (Probably won't have as much every month, because my husband has a chronic medical condition that requires on-going treatments that eat up the $300 a month easily, but right now is not requiring treatments, thank God.)

Feel free to e-mail me with questions about the Columbus trustee if you want, although I'm pretty much a newbie to the process so may not be able to help, but I'll try. I know if you live in the Columbus area, they require you to go to a pre-341 meeting where they give you a booklet of info written by the trustee, but since we live in Muskingum county our lawyer just gave us a copy of the booklet at the 341. At the meeting they asked us if we expected any changes in income, to which my husband replied that he's been applying for different positions with his current employer that might result in about a $2 change in hourly salary, which would be $300-350 per month, and they just waved it off and said "no, we meant significant changes" so I'm really hoping that they're the type of trustee that just wants their payments and doesn't audit or make you jump through a lot of hoops as long as you make your payments. Don't know how they are for CH 7 though.

[ssdsco]

Strange that I received an offer today from Discover to knock 60% off of my debt as a settlement (on about $20,000.00.) I have never answered one phone call from them over the last 7 months...
but they offer to let me off the hook for $8,000.00, saving me $12,000.00? They have been bugging the crpp out of me for months with 10 calls/ day.

Got the same offer including the gift card if I call them and agree to the deal. Still not a good deal for me.....BK, Priceless .