My Debt Settlement Story - Preperation, Questions

Debt Settlement - Preparation, Questions
Hello,
After careful consideration of my options, I have decided to go the DIY debt settlement route for the $51k of debt that I have accumulated over the years. I am CURRENT as of today:

• Gap - $450 @ 24% - planned on paying off as it’s a retail store card

• Orchard Bank - $950 @ 20.00% - would like to slowly pay off and keep as my loan card
• Wells Fargo (Retail store card) - $1,100 @ 0% - 0% thru the year, can be pd off $100 month
• Chase - $8,700 @ 6.00% - hardship program, 2 years in, on a of 5 yr program
• Chase - $5,400 @ 12% - can get hardship if I ask
• US Bank - $6,900 @ 14%
• Discover - $8,000 @ 13% - hardship program
• Amex Blue – $8,000 @ 0% - hardship program for 6 month, 3 remain
• Amex Gold $ 12,000 - 0.00% - hardship program for 6 month, 3 remain

TOTAL= $51,500

The above is daunting and I cannot keep up with minimum payments any longer, as my mortgage must be paid as priority one. Losing my house is not a real option due to the housing market and my family situation (medical/therapy bills for 2 autistic children, marital strain, large pay cut, elimination of yearly bonus, etc..).
Questions:
Should I wait 90 days before I do anything? If so, should I be ignoring all calls from OC?

Should I then be making initial contact via mail or phone?

Regarding my story, I plan on writing all of this down and being very concise, less is more. I am a bit unclear as to what information they have available to them regarding my employment status, salary, bank accounts, medical bills, etc.

Do they only have access to my credit report?

While I do not plan on lying, to an outsider, it may seem my salary is still decent, but as many know, it’s all relative. I assume an OC can ask anything they want, but how do you answer detailed questions about salary?

Will they require any proofs or have access to info regarding current employment situation, outstanding medical bills?

Is keeping one small balance card and continuing to pay that off a bad idea (Orchard Bank), what about the Wells Fargo retail card w the 0% thru 2013?

I have a Chase checking acct that I plan to close ASAP, as well as auto loan w Chase that I obviously can’t close. Not sure of the affects, if any, on my 2 Chase Credit cards..

What if I can’t gain settlements prior to charge-off on certain accounts? I do not want to get sued. As a last resort, I understand I can declare bankruptcy if I must, but what about payment programs and credit counseling services? Will I still be able to do these programs if I fail to settle on a few accounts and don’t declare bankruptcy?

What is the starting negotiation point per creditor and what are the most recent average settlement ballpark figures per creditor?

What affect do balance transfers have on ability to settle? Is it true that balance transfer debt is tougher to settle, especially if fairly recent?

Are older balances easier to settle (more wiggle room) as there has been an accumulation of interest and they are most concerned with principal?

Is it wise to dissect each balance to see what true principal is owed (would require getting very old statements if possible)? Is this likely how the OC comes up with approximately what they are willing to settle for when it comes down to it?

How is accumulated finance charges, late fees, over limit fees (acquired in the months you default) addressed during negotiation or at the point of settlement?

Can you stagger your settlements, ie-stop paying some cards but not others, and then do kind of a snowball method for debt settlement, so it stretches over a longer more manageable timeframe. Or must you do a “universal default” for maximum affect?

Anyone have any recent experience with American Express (already on hardship for BLUE and GOLD)? How about Discover? (these are the 2 I have heard could be most difficult).

I realize I have asked a lot and I have researched the forums, but these are somewhat specific questions and I really do appreciate any insight from experienced forum members.
I plan on documenting my story, as I am sure to have questions along the way. If there is a better place for all “My Story” type posts, please point me to it as real world step by step run through’s are extremely helpful for those going through the journey. What to do vs. what not to do is paramount.

Thank so much,
Bob

AMEX specific questions moved to separate thread titled "AMEX Hardship - about to miss a payments, what to do?"..

Many of your questions have been answered already, search.

What I can tell you is that if you stop paying Chase, they WILL take money from your Chase savings/checking account to cover a payment.

The only reason to stagger is to give you more time to come up with a settlement.

In a nutshell, you stop making payments, the phone calls begin, I answered about once a month, told them I could no longer make payments due to a tremendous reduction in income (they may pry, just explain the details do not change the situation and politely move on). I have never had anyone get out of hand on the phone, I try to politely control and lead the conversation. After about 5 missed payments, ask about a lump sum settlement. Thats it.

I can tell you Chase settles for around 30-35 percent, sometimes after only 90 days late, Amex around 30-40%. I did not have a discover but hear they go around 50%.

Good luck

Thx ioalot.

One question.. upon stopping payments, is it wise to reach out to each creditor initially to tell them you cannot pay and then stop paying or simply stop and await the first call?

I agree, remaining in contact sounds like the best plan, once a month as you stated for the first 3 months or so. And then begin speaking about the potential to lump sum settle with each creditor (still unsure if I should stagger, tho it would definitely help in raising funds).
As for Chase, I plan on closing that account this week and opening another account at a local bank to assure they cannot simply pull funds from my account to cover my credit card.
I plan to give my hardship story, noting my pay cut, rescinding of bonus, as well as my personal situation with my kids, medical bills, etc..
I plan to be concise, and consistent.


One thing I forgot and may be yet another issue, one of my creditors, USBank, also has my HELOC (it is maxed). Anything to worry about there??

thx again..