Trying to settle debt yourself

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.

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

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.

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.

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.

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!

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.

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.

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..?

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.

I will try to answer all questions as I am in DS with a company.
12 accounts being settled debt = 90,000.
First with the fallacies. Regarding equity in the home and doing settlement. If the debt is of an unsecured nature (credit cards,personal loans) it is unlikely that they can touch your home or equity, they can try to talk you into it but in some states it cannot be touched (unsecured).
If you do use a DS company usually the settlement rates is 40% if you do it yourself and dont play toughball it will be much higher. Regarding the fees for Debt settlement it may be worth it as one poster above only settled at 65%, While with Chase its 40% so the fee is really worth it, Don't use a newbie DS company use one that the creditors know.
Also open a different checking account for DS.
It was worth it for me as I lost my job and rather than file bankruptcy I chose the settlement route..they have programs above 36 months...

How about going in with a plan? Show them how much you can afford to pay and keep that amount to 2/10 of your income. 7/10 is for living expenses (necessities), and 1/10 is to have a little fun with. After a while you'll see you have fewer and fewer necessities and suddenly your 2/10 begins to grow.

Of course all this assumes you have a reliable source of income. But anyone can carry out such a simple plan. Right?

I based this idea on an article I found. http://tinyurl.com/c2sc5z

Quote: