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Posted: Thu Nov 15, 2007 10:18 pm Subject: Trying to settle debt yourself

I am currently $30,000 total in credit card debt to 4 different cards. I have a couple different questions. I am 6 months pregnant, working a temp job that ends Feb.1st. I am current on all of the cards up until this month. They are all due next week.
1. How long does the collections & settlement process take? I am trying to bank as much money before baby comes since I will be out of work for 3 months after baby arrives. I am thinking about not paying any of the cards & attempting to settle them on my own.

2. What are the benefits of using a debt settlement service vs. settling on your own? Has anyone settled on their own & been successful? I am having a hard time justifying spending more $ on a company to do something that I can do myself.

3. My husband & I own a home & it is in both of our names. Can they take our house? We have about 90k in equity. Along the same lines...I have a car that is paid off & in my name only...can they take this as well? We live in Colorado.

4. What are the chances of the companies suing me? I have made all of my payments online via my checking account. If I proceed with going the settlement route, would you recommend switching banks or just closing that account & reopening a new one at the same bank? Legally, can they just take what they want out of my account?

I appreciate any advice or suggestions that you have. I have perfect credit & it's hard to think about that going down the tubes but paying the minimums,which I can barely afford, will take me 30+ yrs.

Thanks,
Kim

Posted: Fri Nov 16, 2007 3:40 pm Subject: Settlement

I think you will have a difficult time settling because you have equity - they will know his by running your address in a search engine that gives them an estimated value. You will not be delinquent on your mortgage and other debts, they will be difficult to work with. You probably should take the free consultation and look into debt consolidation, they can help lower your interest and lower your payments.

Posted: Mon Nov 19, 2007 9:50 pm Subject:

Hello, I'm in the process of doing this myself as well, I have about 70K worth of CC debt and was always current until about 5 months ago, I also own some rental houses and thus part of my problem, we just weren't bringing in enough to cover everything, anyway to answer your questions, each CC is different, CitBank sent us to collections after only 2-3 months, and I had to send a letter to the CA to get them to stop calling me. It's been about 5 months now and they haven't mailed anything to me with any intent to sue, so I'm trying to save up money to settle with them. The other 2 I have are still with the original Company - Chase, I was able to get them to agree to a 65% settlement on one card, was hoping for better but as I had been current and I just wanted to feel like I was making progress I agreed. I have one more payment to them, and then I have to work the 2nd card I have with them. They did offer me 60% on the 2nd card but I only have enough funds to work one at a time. This will be sent to collections at the end of Dec so about 6 months time frame for them. My last card is Bank of America and the last time I spoke with them was about 2 months ago, they said they would call me back in Dec as I told them that is when I would be able to work something out.

I choose not to use a DS company because I had limited # of cards and the fee's they were going to charge were soooo much. The main issue is just dealing with all the calls, if your ok with that then your better off trying to work directly with the creditors and put the fee's you would have paid a DS company towards settling.

One note - they will not consider a settlement until you are about 3 - 4 months behind, and my understanding is the longer it is the better settlement you may get.

Also - you most likely will have to pay taxes on any part of the settlement that is written off, they will sent you a 1099 form I believe.

As this is CC debt I do not believe they can put a lien on your house, you should check with a professional though, and I was still current on my other payments except these cards and still able to work out a settlement. If your debt exceeds your income something has to give and that's what I tell the creditors.

You can read more about my journey at

jen.yesdebtfree.org

Hope this helps

Posted: Tue Nov 20, 2007 5:24 am Subject: Debt Settlement

Jen,

I have been following your blog and it is very helpful. I have $130,000 in debt and am not delinquent yet, but will be in December on a few then I'll be delinquent on a few more in January and the final small card in February. I have been saving money knowing I was coming to this point when it all would come to a point where my income would no longer support my debt. I'm in mortgage finance and the housing market died.

The IRS has a section on debt cancellation - publication 982 #21 - you fill out form 908, if your debts exceed your assets you do not have to file it as income, you just fill out the 908 for the IRS review.

I'm doing debt settlement myself. I've had difficulty setting up a blog - I still haven't been able to and have emailed Simon but still have not heard - I'd like to blog my experience for others as well. I find your blog helpful.

Posted: Tue Nov 20, 2007 5:42 am Subject:

You can definitely try to call all your creditors and work out something with them on your own.

The reason it is better to use a Consumer credit counseling Agency is that most times they have already established a good relationships with most creditors. They are more likely to be able to reduce your debt and your payments. At the same time, they will stop collection calls and help you to avoid bankruptcy.

As far as your home ...It is legally possible in most situations for a lien holder to request the forced sale of a home or property.

This rarely happens, generally the lien will remain against the home until the homeowner wants to refinance, sell, transfer or initiate any action concerning the property. Before any transactions can take place all liens must be paid or satisfactoriyl settled.

Liens against real property accrue interest making it possible for a small debt to rapidly turn into a large one.

No, they can not legally take money from your checking account without your permission. But yes I have heard of places that have done exactly that. It is always best NEVER to give anyone your checking account number and information.

Posted: Tue Nov 20, 2007 6:51 am Subject:

I highly encourage anyone who chooses to use a debt settlement company or a debt counseling service to please research carefully. There are companies that do rip you off. It is important for you to know everything thing there is to know. Don't just check the BBB, put in the name of the company in a search engine and see what comes up, it's going to be the consumers that will give a valued opinion.

Posted: Tue Nov 20, 2007 8:31 am Subject:

Lost in Debt - nice to hear someone is reading my blog! lol it has been a nice way of getting everything out of my head! Although I might need to make a section just for detailing the process of dealing with the CC's. Will see, but thanks for the info on the IRS, I'll look it up and good luck with your blog, once you get it up and running let me know.

Also - Kimberly - the moderators are right, before missing any payments check with the Debt agencies, I did try and work with a counseling service but the payments were going to be the same as what I was paying, which didn't help. So my last option was settlements or bankruptcy. and I really feel with the settlements I can get through and move on without the BK, so that's what we decided to do. It's a very personal decision so take time time and do research here on these boards and other places before making your decision.

Good luck!

Posted: Tue Nov 20, 2007 7:41 pm Subject:

Thank you for all of your replies. I checked into consolidation but the payment was the same as I am paying now. The interest rates I have on all cards are very low 0%-3.99%. As of yesterday, they are all late. I am going to proceed with debt settlement though I am still unsure whether I should hire a DS co. or not. Legally, I don't want to get us in a jam so I am seriously considering it for that purpose mainly. I was making my cc payments online via my checking account. Not sure if the cc company would be jerks & take the $ out anyways or if that's not something I should worry about. I don't want to file bankruptcy & this is my last resort.

Guest · Posted: Wed Nov 21, 2007 11:19 am Subject:

I would talk to your bank and make sure that they put a stop payment on any payments from your cc companies. I have heard good things about Sifxpert. Google him. He is reasonable and great at what he does.

Guest · Posted: Thu Dec 06, 2007 1:11 pm Subject:

Im in debt about $10000 dollar, still looking for full time job luckely im not in the good situation here. i have personal loan with the bank about $5000 and credit card about 4000. not even close to 10000 dollar. i trying to consulidation my debt. waht should i do?.. to pay the debt and only pay one mounthly payment..?

jlhansen · Posted: Thu Dec 06, 2007 2:29 pm Subject: debt settlement

hello, just saw this forum- i recently started working for a debt settlement company. we negotiate with creditors to settle between 45-65% on the dollar. it is on a 36 month program and payments seem to be significantly lower than the combined minimums due. you can email me at j.hansen@mantisdebtrelief if interested and i will forward the info to my supervisor.

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