stupid newbie requests opinions

i have been reading this site, and i am looking for some advice. i have 3 cc's that have balances i need to get rid of: amex(39k, 17.99, 815/mo), chase(10k, 14.99, 200/mo) and discover(4k, 13.99, 80/mo). the time has come where i only have about $600-$800 expendible cash for making the payments. i was hoping to call discover and settle, but after reading here, i guess one cannot settle unless the account is delinquent? what will likely be the outcome if i call the creditors myself and state my situation...will they say too bad, and then i have to deal with a third party anyways? also, once one does settle on a final value, and it's paid, is the acct closed? i really only want to keep the amex anyways. i'm confused on which way to go. i used one of the calculators on site, and settlement for the 3 could be achieved in about 4 years based on $600/mo. dmp would take something like 154 months. i checked my credit report at some point last year, and i was at 735. i checked it again about 10 days ago, and it was down to 650, even with me making all my payments on time and in full?

one thought was to not pay chase and amex, and put the $600 towards the discover and have that paid off in 6 months, and go onto chase from there. then there would at least be one good acct, one slightly bad acct, and one pissed of amex!

Hi there;
Okay 4 years is WAY too long for settlement to be an option. You almost for sure will be sued by your creditors, and AmEx and Discover are definitely of the more aggressive type. I have an AmEx balance of $10K and they sent my account to collections after 90 days to an agency that is also a law firm. This CA/law firm was going to sue me if I did not agree to settle within 10 days. I ended up with a 55% settlement, payable in 3 payments.

It sounds to me like you would be better off looking at debt management. Debt management does not hurt your credit score and they will work with your creditors to lower your interest rate as well as minimum payment due each month. A really good non profit debt mgmt company is national is Greenpath. I think they have locations all over the country. (Also recommended by Suze Orman if that matters to you.) They have a good working relationship with creditors and almost for sure can get a great interest rate and repayment plan. I think most debt mgmt companies, at least the legit ones, try to get you out of debt within 5 years.

Another option you may want to try is debt consolidation. Your credit score is still pretty good so maybe you can get all of your debt combined into one lower payment. Banks are being more picky though now that they are hurting so badly, so you may not get the best deal there.

Whatever you decide this website has a ton of info from people that are in the process or trying to do exactly what you are so keep reading and I'm sure you will figure out what is the best fit for your situation. Good luck!

I agree that a debt management plan sounds right in this situation, particularly since you are paying 18% on your largest balance and 14-15% on the smaller balances. And you do have expenable income that you can afford to make payments each month, just not at these exorbanent rates.

Also, I'm not sure if my experience is telling or not (and I think this situation if fluid with CC companies getting more on top of the situation with each week), but when I tried to be proactive and call my creditors before I missed a payment, they couldn't or didn't offer to do anything for me. I think you really need to miss a few payments before they try to work with you. But I hope this is changing as they could get out in front of some problems if they'd work with people.

so, i should stop paying them? it goes against my principles, but if that's the best way to tackle this, i'll digress. also, i'd like more info on greenpath if anyone has any. i have a house with 2 mortgages that we can pay without issue, and we certainly don't want to lose it, though i think we have a homestead or something anyways.

also, my $600 figure could easily pay the discover and chase, as the payments are $80 and $196. then i would only default on one card(conveniently, the one i want to keep!). should i go that route, or just let them all lump into one?

have you called the credit card companies to see if they would lower your interest, or if there are any hardship programs that you might qualify for?

not yet.

thats what I would do, take 30 minutes and call all of the companies. You might be surpised!

i called amex. they offered no interest for 6 months, the 9% interest for an additional 12 months. the only downside is that i cannot use the card at all during that time. makes sense i guess, but how much is my balance really going to drop. i thought my apr was 17.99, but they said it was between 13-14%. plus my payment would still be about $800/month, which i don't have. still not sure if i should tank on all 3, or keep 2 good and tank on amex only.

post above was from me....apparently i get logged out everytime i close the window!!

they didn't have a way to let you skip one month to try and get everything under control? What did Discover and Chase say?

Can you cut your spending somewhere to make up the gap? You are very lucky to be offered that 0% interest by AMEX, I wish I was that lucky!

they didn't offer to skip a payment. it is a good deal, but with my balance, i'm not sure 18 months will do a lot of damage control. she said it would drastically help. i haven't had a chance to call the other two yet.

please let us know what they say ... you are in a position to be able to fix this yourself, the damage to your credit by defaulting can take YEARS to repair.

i forgot to mention that i also filled out a hardship form for citimortgage, for our primary mortgage. we can keep paying it, but i filled it out in hopes of them reducing something so that i can throw the extra money elsewhere(didn't mention that to them though!). the form said 10-15 days for a response time. i haven't heard from them yet, so i called today, and they said it's more like 45-60 days right now due to the economy.

i spoke with discover on my way home from work. we set up a 6 month plan where my payment stays the same($76), but the interest rate is 3.99. i cannot use my card during the 6 month period, and they automatically withdraw the funds from my checking acct on the 21st of each month for that 6 months. still need to get a hold of chase.

Be careful with Amex hardship programs. They put you in the program then close your account and send you to a collection agency!! Once they know you are in trouble they go after you.

thanks for the info. when i call back in a few weeks, i will question them on that, and get the answer in writing. according to them, i can't do anything until my billing cycle ends on the 11th.