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Bman90278 · Posted: Thu Jul 10, 2008 10:08 am Subject: Question about Debt Settlement

Hi, Sadly because of the recent WGA Writers Strike in Hollywood and a recent work injury I totally overextended my credit over the last 9 months. I have close to 80,000 I owe to credit card companies. I just signed up for debt settlement and wondering about keeping a few credit cards with small balances that I kept from going delinquent. All the others are 90+ days late. I was planning on paying them off as they have low balances so I will still have cards for emergency purposes, but my Debt Settlement company said it will be detrimental to me as the companies I owe money to might not offer the lowest payoffs since they feel I still have other credit cards I will use. Does this sound right to you?

Thanks,
Brian

Posted: Thu Jul 10, 2008 1:56 pm Subject:

My DMP only put in the cards that I wanted-they didn't give me a hassle. They would prefer you put them all in. My DMP rep didn't say anything about not putting the cards in hurting my chance of lower rates.

Posted: Thu Jul 10, 2008 7:12 pm Subject:

Yes it does sound correct. Its kinda hard to justify hardship if you can`t pay some cards but will continue to pay on others. Well that is how the creditors will see it.Typically you can leave only one card out for emergencies.

Posted: Thu Jul 10, 2008 7:27 pm Subject:

I agree that it does sound correct. I had one collector tell me recently that I must have money that I could pay him with because he pulled my credit report and it was showing a Chase card with available credit on it. I laughed at him and told him the report was wrong because my Chase account is definitely closed, definitely delinquent, and they definitely call me regularly.

Anyway, I HAVE heard that if you don't treat all creditors the same as far as payment, then the ones that you are not paying will not feel that you truly have a hardship.

Posted: Fri Jul 11, 2008 4:56 am Subject:

I think that is just a shame. The fact that the collection agencies can get this information without our permission and use it against us. What has happened to our privacy.

Bman90278 · Posted: Fri Jul 11, 2008 6:57 am Subject: One question

Thanks people for your input. I had hoped to keep my one card that has a $500 limit, but I guess I need to add every card to my settlement.

Thanks,
Brian

The Goat · Posted: Fri Jul 11, 2008 11:27 am Subject: Keeping a card out for "emergencies"

If you put two cards in a DS program, and keep 2 out for "emergencies", you are showing FAVOR. (as the experts call it.) You must include ALL of your credit cards in a DS program, otherwise, the banks will not negotiate or settle.

SusieQ · Posted: Fri Jul 11, 2008 5:20 pm Subject:

I am in a debt settlement program also, and was allowed to keep one card for emergency use, and I chose my Discover card because I had a low balance and low interest rate. However, once they saw my credit was going down the toilet, they lowered my limit so there's no available credit for emergency use anyway. (%$#@!) I can continue to pay it down, and build up a bigger available amount to use, but for now I'm stuck. That may happen to any cards you DON'T put in the program. JC Penney cancelled my account altogether, even though it had a zero balance and I hadn't used it in about two years.

Posted: Fri Jul 11, 2008 5:38 pm Subject:

Credit cards usually will do an account review periodically, and they may pull your credit during a review. If they see anything derogatory going on, they can and will cut you off.

You may not know, but creditors can set a "watch" on your credit file (very similar to credit monitoring that you might have for yourself), whereby they will be notified when something new/bad appears on your credit. If they get a hit off the watch, then they will automatically do an account review and possibly suspend/close your account if they see something they don't like.

While you can't exactly stop them from cutting you off ... you do have certain rights provided by the ECOA (Reg B). Namely, they would have to send you a notice of adverse action and give you specific reasons why they closed your account or reduced your limit. If they don't send you the letter, you could get them on a violation.

Posted: Fri Jul 11, 2008 7:11 pm Subject:

SusieQ, don't be surprised if, as you pay the balance down on your Discover card, they lower your credit limit even further. What I found, as my credit started to deteriorate, is that my creditors would lower my limits as far as possible, given the balance that I already had on the card. That way, I wasn't over the limit, but couldn't really use the card any more.

Posted: Fri Jul 11, 2008 10:08 pm Subject:

May I ask, lawn1016 , who you are doing a debt management Program through? I am starting to consider looking into a DMP, as there are only specific accounts that I feel I need some assistance in handling and other accounts I feel confident I can pay off in my own time quicker. I've been doing some research, and would love to hear who you are going through and whether or not you are satisfied. Thanks!

Sorry to hijack your thread, guest ^_^;

Posted: Sat Jul 12, 2008 5:52 am Subject:

Amaranth we have financial counselors available through our site. Call the toll free number listed on our home page. For debt management plans,review mobile311's posts.He is in the industry & keeps a close eye on things here on our board. I moderate here but I am clueless about this topic.

Posted: Sat Jul 12, 2008 5:57 am Subject:

Amaranth here is his home page.You can search his forum posts,leave a message or pm him from here.

http://www.debtconsolidationcare.com/mobile0311/index.html

Bman90278 · Posted: Sat Jul 12, 2008 8:44 am Subject: more

Again, thanks everyone for input. I guess I will have to put all my cards into settlement. I wasn't thinking about it, but I thought about keeping my Amazon visa card, which is Chase ,but it is the same as my Circuit City card which is Chase.

Plus everyone is right. I have a Home Depot card which has a balance of $382 and I have never been late. They just sent me the famous letter, due to your recent credit review, blah, blah, blah, your credit has been reduced from $2500 to $500. I would guess anyone who keeps a card while in debt settlement will have limits below $500.

Posted: Sat Jul 12, 2008 3:56 pm Subject:

Cajun- I have already spoken to the counselors here through the website- and they keep contacting me about settlement. I am currently up to date on all my accounts, so I don't feel like that is the right option for me at this point in time.

I do thank you for the link for more info on DMP. I will definitely be looking at it. Thanks!

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