Is Debt Settlement for me?

Hello! I just found this site and let me say it’s awesome. A great place to weed out the good from bad.

We currently owe about 35K total in credit card debt. As of right now we are current on everything and our credit is not that bad, just extended because of all this CC debt. I am considering debt negotiation with Town & Country. The biggest chunk of our debt is with bank of America across two cards with them totaling 25K. From reading here I see that Bank of America is offering some very nice settlement packages as low as 20%.

My question is this for me? We have to do something. We just barely make ends meet right now with this debt. I would consider CCS but I have a feeling the payments would not bring any relieve to our budget. Thanks for your thoughts!

Have you looked into Debt Reassignment?

Debt settlement is a great process, if you don't have any other choices. It is a last resort before bankruptcy. Your credit score will drop like a lead balloon, there's no guarantee you won't be sued, and unless you can prove insolvency, you will have to pay taxes on the amount of forgiven debt as if it were income. Be sure you learn everything you can about the process before you commit to it. You won't be able to settle any accounts unless they are way past due. Creditors won't settle with you if your accounts are current. Other credit card accounts you have no problem with will most likely be closed or have your limits lowered once your credit tanks. You might want to check into other options, like debt management programs, before you take the plunge.

Settlements are meant for people that are probably way past due on their accounts anyway. If you want to protect your credit please check other options for getting out of your difficulties. If you choose settlement, you can sign up with a company (do your homework!!) or do it yourself if you only have a few accounts that need to be taken care of.

That said, I have been in a settlement program for a little more than a year, and it has done very well for me. But I had no other options. I researched it fully, and knew what to expect. It is still a rough road at times. But the light at the end of the tunnel is getting bigger.

your credit score drops if you miss payments, so I agree, your credit won't be your first priority if you get to that place, financially.

Thanks for the pointers. What is Debt Reassignment?

After looking a little more into it maybe a Debt consolidation Credit counseling service is more for us. I searched this site, but it’s seem most posts are gear to debt negotiation. Does any know of a good credit counseling company?

debt counseling if you can swing the payments would be your best option if you can follow through with it. Susie is correct that settlement is that usually are too far behind for the counseling programs out there and settlement is next best to avoid the bankruptcy.

I would suggest check into the credit counseling first, and if that dont work out then go for settlement. Also as susie said, settlement is a long road and a tough one. So you really dont want to take that route if you dont have to. But if you do its a great tool. But its far from fun! i know.

Hang in there susie! It gets better! By my second year i was feeling the relief of the grueling first year. I think its because you can see the light at the end of the tunnel. That the end is near. Isnt that a great feeling? Well its not as great as when it over but its pretty close!

Can anyone recomend a good good credit counseling company? Thanks!

chris, we are really not allowed to recommend any company because its considered spam or advertising. If you know the companies that your interested in google them and see if there are posts about how that particular company worked for others and make a informed decision.

Usually there are posts in this forum on most of these companies and you can get a pretty good feel if its a good company or not. Hope that helps!

Chris07 there are a lot of good credit counseling companies out there. When shopping around for one look for these few credentials.

# 1 Make sure they are a 501(c) 3 Non profit Organization.

In order for a credit counseling company to receive benefits such as reduced interest rates, waiving late fees, etc from the creditors, the agency must have its 501(c) 3 Non profit business license. Typically if a company does not have this license, they are unable to receive the benefits for their clients.

# 2 See if they are ISO Certified

ISO stands for International Standardization of Organizations. Most major credit lenders are requiring credit counseling agencies to achieve ISO 9000:2000 certification and satisfy the requirements listed in their Code of Practice in order to receive the benefits they offer.

# 3 Are they a member of the Member of the American Association of Debt Management Organizations or AADMO ?

AADMO is one of the largest Debt Management Associations in the nation. They provide a great source of information, education and news to keep that credit counseling company up to date with any recent changes.

#4 Do they have employees that are Certified Credit Counselors through the National Association of Certified Credit Counselors or NACCC ?

NACCC is an independent credentialing body recognized by the debt management industry as well as states and creditors requiring certification.

# 5 Do they have a good reputation with the BBB ?

See if they are members or at least have a low pattern of complaints . Also see if their complaints were resolved.

there aren't any chris07. 75% of people who sign up for CCS drop out.

maybe there is maybe there isnt a chris07, but im glad mobile posted this information because if chris does not come back maybe someone else will read this post and find it important to them.

"YOU CANT HELP EVERYONE ALL THE TIME BUT YOU CAN HELP SOMEONE SOMETIME."

My new favorite quote i heard on the biggest looser last night. It made my night

ignore the guest post. The 75 % drop out rate in CCS is not true.

Okay, bottom line....
Can you save 50% of your total debt (so in your case that would be $17,500) within 12 to 18 months max? If the answer is yes, then I think debt settlement would work for you. Learning the ins and outs is easy. I personally would not hire a company to do settling for you; to me that is added stress to the situation (more cost and the constant wondering if they are doing a good job for you). Trust me your creditors want to settle with you more than a settlement company. You can do this, just research as much as you can. There are a couple of good do-it-yourself programs out there. Check out zip debt on the web. You can do this!

hey sunnymay have a question for you,since chris07 is trying to learn about all this thought this would be good for him to know also and I know,from talking to you before, that you have already been through settlement thought you might be able to give some insight on this.I have posted this question and only have received 1 reply.Did you have any issues with a levy put on your bank account? Have heard that they don't need your bank or your bank account that they can find your info from your social security number.Do you know if this is true? A settlement company told me that they have their customers move their bank accounts to another bank as a decoy. Did your settlement company make you do that and did you have any issues with a levy? One more question...the settlement company also told me that your creditor can put a levy on your account anytime without notifying you but a collection agency cannot.Do you know if that is true?

Hi Oakrascal7;
I have not experienced any kind of levy being put on any bank account, nor have I heard of that. I originally signed up with a settlement company and paid one up front fee of about $3000....which was supposed to buy me an education about the settlement process and a debt "counselor" would be assigned to work with me one-on-one and help me through the entire process. Well to be honest that money was a waste of time because I have truly learned more from this site and also reading blogs and questions on the zip debt website than anyone from that company. Anyway I stopped using my "debt counselor" some time ago and have been dealing with my creditors by myself.

Getting back to your question, I do feel that it is wise to keep one checking account separate from any other banking account you may have. Declare this your settlement account. That way there isn't any confusion, and you have a VERY clear idea of exactly what is in your "settlement" account at all times. I opened a regular no frills free checking account at a local bank and I have never had any problems.

If a settlement company told you that your creditor can put a levy on your account any time they want without notifying you, they may have been suggesting this: if you have a checking or savings account with a certain bank, and you ALSO have a credit card with that bank, then that creditor will be able to see if you do in fact have funds in the checking or savings account to pay for the credit card. So, for example, if you have a Bank of America credit card or unsecured loan, do not have a Bank of America checking account sitting around with money in it.

From what I have experienced so far the only thing that creditors can see is what is on your credit report. They cannot see this or last year's tax info. They cannot see paycheck deposits or anything like that. And they cannot see your bank accounts.

I cannot stress enough how careful you need to be when selecting a debt settlement company. I personally feel that a do-it-yourself plan is the best, but if you really feel you need a company to help you with this please research them over and over again. There are SO many slime ball companies out there trying to take advantage of people in our situation, that it is sometimes hard to tell the good guys from the bad guys!