Starting My Debt Settlement Journey - Questions/Advise

Hello all - I have read many posts on this site and decided that it is in the best interest for my family and myself to try to negotiate and settle my credit card debts. I feel that I have learned from my past mistakes on amassing this much debt and don't plan to make the same mistakes again.

The last payment on all of my cards were made in October of 2011. I plan to my income tax refund money to pay for the settlements.

I won't go into detail on why I fell into the hole that I am now, but I must say that before October I never missed a payment, but the debt is currently unsustainable now, and I have to make supporting my family a priority.

Currently my debt is as follow:

Bank of America AMEX: $9,531

Macy's AMEX: $9,121

Macy's Store Account: $3,098

Discover: $3,198

To this date, I have avoided all phone calls from the creditors by blocking their numbers in my cell phone. I plan to give them all a call after the 18th of February; by then I'd be 120 days late on all cards.

My questions are as follow, regarding each account:

- I have a checking account with Bank of America. Is there any danger of them taking the money out of my checking account, without notifying me or without my consent to pay for their AMEX card? Should I take the money out of the checking account? I have read in these forums that Chase does this. Also, Penncro Associates claims to be a collector for this account and I sent them a validation letter a few days ago. Is it a good idea to just deal with FIA (creditor) directly now?

- I did not find much information about the Macy's AMEX accounts in this site. Macy's keeps two different accounts, one is the AMEX credit account and the other is a store account. I get separate monthly statement for each account and each has separate account number but both are linked to the same card. The statments say that they are both provided by the Department Stores National Bank. The Store Account statement also mentions FDS Bank. Should I handle the settlement of these two separately or should I try to settle both at once? Is it even possible to settle the Store Account?

- Discover card has a offered a 12 month payment plan in their website. Should I expect to find a settlement offer in the website at a later date? the balance is not very large compared to my other debt and I have only had the account since 2006. I've read that Discover is very hard to settle with, especially with account that are not very old. Any advise?

Thank you everyone in advanced for your input/comments and I will keep you all informed of my progress.

To be on the safe side, it is better to take the money out of the checking account. If the account is with Penncro Associates, then you'll have to deal with them.

I've been dealing with Discover. My account is fairly new (probably 2 years) and I've been told that it will be difficult to settle. I also had the 12 month offer show up online and then ended up with a 70% offer, payable over three months. I'm not quite 120 days yet, so it probably showed up sometime over 90 days. I called and said I couldn't afford the 70%, but they wouldn't go any lower. I'm hoping maybe it will change as we get closer to charge off at 180 days. I don't pick up when they call, but I've called in a few times to let them know what is going on with us and they have always been kind regarding our situation.

A federally chartered bank ie. BofA cannot "set off" for an unsecured consumer debt. And yes Chase will suck you dry.

That being said, I have BofA deposit accounts and I didnt want to risk it, so I bank elsewhere for now. To date BofA has not attempted to touch my BofA checking acct for the 30K we owe them in credit cards (only load it once a month for the mortg payment) .

welcome to the forum!!! I started over a year ago and this place is great!! I got a lot of great info here---

I settled with discover in august for 50 percent -- close to charge off -- about 30 days away -- they are tough and don't go lower -- you might have to deal with a collection agency for lower --

good luck!!

Thank you for your responses. This forum is truly informative and the people in the community are great.

Just to give an update on my case, I decided to give all the creditors a call and "test the waters." I'd inform them of my financial situation and I just wanted to see if they'd give me an attitude or be rude. To my surprise, they were all very friendly, with all three of the creditors offered me an opportunity to go into a hardship program. I told them I couldn't commit because I didn't have any money or knew when I'd have any money to make a payment. Discover even said they'd stop collection calls for "a while." I also confirmed that all of the accounts are still being handled by the original creditors.

My question is - when is it a good time to put the option of settlements on the table? I'm already over 90 days past due, going into 120 days soon and it was my first time talking to all of the creditors. Is it typical for them to put the option on the table first?
Also, when I spoke with Macy's they told me that they'd handle both the American Express and the Store accounts, but that the store card is issued by Citi and the AMEX by American Express. Very interesting and I wonder how this is going to go when I try to settle with Macy's.

Any thoughts?

Thank you, all.

BofA does take money from checking accounts to pay off other debts owed to them, including credit cards. They include language where you authorize these transactions in the paperwork you sign for any accounts with them.

Hello all - I just wanted give an update of my settlement journey:

I had initially spoken with all my creditors on 2/7/12 just to give them the story of my financial situation.

Today I decided to give Macy's American Express a call back just to see if I could get the rep to put a settlement offer on the table, and won't you guess it, she transferred me to the "Payment Assistance Department" where I discussed settlement options with different rep. The rep explained the tax implications of a settlement (which I already knew from ready this and other helpful websites, but I let him talk anyway), and credit report impact ("settled in full" for 7-10 years on report), and eventually asked me what I could afford in a lump sum payment. I said $2,100.00 (about 20% of total debt) to start low. Apparently he put this info in a computer system (I assume this because I didn't hear him speak with anyone else) and then he countered with an offer for exactly 70% of my debt. I said no thank you and he recommended I call back another day to see if offer improved. The part that was interesting is that he said that company policy is that they don't fax or mail an agreed-upon settlement offer. I told him it is shady that they won't put it in writing and that I wouldn't agree to any amount if it won't be put in writing. He didn't budge, but I didn't expect him to on this try.

My second call was to Bank of America (FIA) American Express and this time I put the settlement topic on the table. The rep asked that I list my household budget and expenses, which I did with no problem, and after she realized that I am in a bad financial situation, she also seem to put the info in a computer system and said that at the time settlement is not an option. She recommended that I call another day to see if they option had opened up. She then transferred me to a third party debt management company for a free consultation.

Well...I am hopeful that next time I call (I'm thinking I'll give it another couple of weeks) Macy's will come down on their offer and FIA will give me the option to settle.

I know Discover and Macy's Store Account (which apparently is handled separately from the AMEX side of the account) are a pain in the butt and I'm tired, so I'll give them a call another day.

I was a little nervous about talking settlement for my two largest accounts, but I worked up the courage and it turned out they appeared sincere and understanding about my financial situation and didn't give me an attitude.

I will keep updating as things develop. I am currently 125 days late with payments.

Hugo

"BofA does take money from checking accounts to pay off other debts owed to them, including credit cards. They include language where you authorize these transactions in the paperwork you sign for any accounts with them. "

OhioGal1

Found this early in my journey....
Federal law restricts the application of the right of offset, preventing federally chartered banks (such as Bank of America, Wells Fargo, etc.) from using the right of offset to collect of delinquent revolving debts, such as credit cards.

I still moved my money out of my BoA checking and only place my mortgage payment in there once a month, so between mortgage payments there is like a couple of hundred in there. In the past 5 months BoA has never attempted to "offset" anything for the 2 BoA credit cards that are delinquent.

hrvasquez

BoA/FIA- spoke to them twice yesterday, was told on two seperate occasions that the offers for settlements are renewed/recalculated on the 5th of the month.

They are currently at 30% at around 190 days from last payment.

"hrvasquez
BoA/FIA- spoke to them twice yesterday, was told on two seperate occasions that the offers for settlements are renewed/recalculated on the 5th of the month.
They are currently at 30% at around 190 days from last payment. "

Thank you for the info! I will reach out to them again on the 3/6/12 to see if the settlement offer opens up. How high was their initial offer to you and how late with payments were you when they proposed it?

Thank you all for your responses and helpful information.

hr..
According to my notes, last payment was Aug 11, spoke to them once in Oct, and again in Nov, basically gave them our story, then in mid Jan I asked about a settlement, they were at 35% then, 30% now, Would love 20%, we'll see. this is on 2 sep accounts totaling about 30k

hr...

They began at 35% and now are at 30%. These were last paid in august 11, I never inquired about a settlement till mid Jan.

Hello All - I just wanted to give an update on my pursue to settle my credit card debt.
BofA American Express: Spoke with rep on 3/15/12 and was offered a settlement to pay for 55% of the owed amount. I kindly declined and will try again at a later day. I read on this forum that BofA recalculates settlements on the 5th of the month, so I will call again on April 6th.
Discover Card: These people are just not flexible and have rejected the notion of any settlement. The only thing I have going on here is an offer to settle for 70% of the owed amount in three payments, offered in the Discover Card Website. I was told on the phone that that offer comes from Corporate Headquarters and the reps can't renegotiate by phone. I asked for a phone number to HQ and they didn't give it. I guess I have to just wait and see if they budge by phone of get a better offer in the Website. I am willing to settle this one for 50% if I get the chance.
Macy's Store Account (Citi): The lowest offer I've gotten over the phone is for 80% of the total owed amount. I just got a letter in the mail from Citi offering me a settlement for 60% of the total amount owed which expires on 4/10/12. I will give them a call and refer to this letter, maybe I can talk them down to 35-40%.
Macy's American Express: The lowest offer I've gotten over the phone is for 70% of the total owed amount. On a later phone call with a different rep I was told that no settlement offers were on the table for my account. This was almost a month ago, so I will try again this week.
Honestly, I feel like my progress has been slower than I anticipated and it's a little frustrating. Also, I have been told by the different reps from the different creditors that my account is only 90 days late, when in reality my last payment was in the middle of October 2011, so I'm not sure how they come up with 90 days. When do accounts charge-off? I've read anywhere between 150-180 days of last payment, but I am not sure. I'd like to settle these before they become charged-off or go to a CA. Any advise.
Thank you all for your contributions to this site. The information I have found here is priceless.

Did 2 boa this month at 180 days for 25% of 28k bal, could not get them lower.

Charge off is usually at the 7th missed payment.

Amex is getting hard nosed. I settled a business card at only 120 days for 35%, the second went to 3 CA's, last CA said they couldnt even entertain a settlement with Amex till Chare off. They explained Amex has changed the tactics in the past 6 mos or so.

Even Boa, The rep had me on hold for 30 mins trying to get mgmt accept my offer of 20%, (unless she ran to Dunkin). She came back and said she could guarantee it wouldnt go below 25%.

Im wondering if defaults are declining and creditors are raising their offers.

ioalot - Did you reach that settlement 180 days from your last payment or from the date of your first missed payment? Also, did they send you the deal in writing before you started paying?

thanks for your input.