Debt settlement

That's generally the way it works out, but many settlement clients are already in collections, if not some very deep hot water, to begin with. In my case, I was continuing to pay my monthly bills on time, but my credit score was plummeting anyway because the debt-to-income ratio was so bad and all my cards were filled to the hilt. The accounts that my settlement company has settled were at 30%, and I did one on my own, outside of the program, at 10%. (A common amount of settlement seems to be 40%.) You can try to settle accounts on your own, but most creditors won't settle until you are already past due and in their own collection departments anyway. And yes, the settlement company I am with does pay for the credit repair afterward, but it is something I am also going to be working on, on my own, as the accounts settle, and not wait for the settlement program to end.

SuzieQ
Which banks did you have accounts with ?? who are the hard ones to work with ?? I am thinking of going this direction. I owe the following banks, all cc's .

Wamu
B of A
Citi
Wells fargo
Capital one

I had two Bank of America accounts, one was business and one personal, and they settled within just a few months at 30%. I never even spoke to them, the contact was made with the settlement co. right away and the deal worked out. Some people say that BofA has been difficult, but they were super with me. Advanta was persistent, but offered me a settlement I couldn't refuse at 10% (of a 22,600 bill). I also have a Chase, a Citi, Walmart, Target, Sears, and Sears Mastercard. Some of them I've hardly heard a peep out of, although some are currently negotiating with my settlement company, and some have gone to collectors. The last payment to BofA will be made in October, then we can start in on the others, all much, much smaller and hopefully those will get settled quickly once there are funds available to take care of them.

susieQ, sounds like you are having success with your settlement company. I have 100K on the cards I listed. Which company are you working with ?? I may want to contact them.

thanks

I am working with Superior Debt Services out of Fort Collins, Colorado. If you type their name in the search box above, you will get a whole list of stuff to click on and read. Some people have not had such good luck with them, but it has worked for me and many others. I have to point out, that debt settlements are not for the faint-hearted, and not a quick fix. It is a 36-month program, and it isn't impossible that creditors who get tired of waiting could sue. This is the nature of the settlement process, and not the fault of any particular company you might be with. The ones most eager to settle, and who make good offers, get taken care of first. It all depends on how much money you have available to put into the program. The first couple of months your phone never stops ringing (caller ID is a must-have). You have to listen to the lies and manipulations of the collection agencies. And, it isn't exactly cheap. They do charge a fee, which is worked into the first year of your payments. And when you owe a lot (my grand total was over 90,000) even at the estimated 40%, divided into 36 months, the monthly payment can get high (although much less than the credit card bills, and not just interest!) BUT, the longer you are in it, and as you start to see the accounts settled one by one, you realize there is a light at the end of the tunnel and being debt-free is in sight!

SusieQ, did you think of/or try setteling on your own ?? I am going to see a BK attourney, just to add this to my options. my 1st choice would be setteling on my own, followed by an agency if that does not work. I am not late to any creditors right now, but doom is on the horizon, so i need to plan for it.

thanks

I considered it, but with a whole lot of other things going on including health issues, needing to get started in another job after my business closed, and family & community responsibilities, I just wanted to turn the whole mess over to someone else that knew what they were doing and could relieve me of some of the burden. I did spend quite a bit of time on this site and surfing around the internet looking for info on different methods and companies. As it was, I settled the Advanta account on my own, outside of the program, because the great offer came at a time when my funds into the program were going toward the BofA settlement. After the last BofA payment is made this month, Superior will deduct Advanta's amount along with the proportionate fee, so my monthly payment should be quite a bit less (payments made to BofA based on original payment schedule). You absolutely should try settling on your own, though, if you feel you have the time and energy to deal with it. There is a lot of good information on this site about doing that. And your attorney may have some good ideas too; some attorneys will handle settlements.

SusieQ
Had you considered BK ?? If so what were the reasons you did not go that route ?? I know it will stay on your record 10 years, but doing debt settlement destroys your credit any way for a period of time. with chapter 7 you could probably walked away owing nothing.

I am going to have to be moving, (half-way across the country) and will need to be able to purchase a new house within the next few years. Although the general consensus has been that even though debt settlements show up negatively on your credit report, your bounce-back is quicker than with a BK. And, speaking to a couple of bankers in the area I plan on moving to, (recently, even now with the big credit mess), since my credit problems were because of a business that closed due to circumstances beyond my control and because my current mortgage and house payment history has been spotless, getting a new mortgage within the next few years after my settlements are done is not totally out of the question. I may have to pay a much higher interest rate for awhile, to get my foot in the door, and may end up with a very small house with a big downpayment, but it is a better possibility with a settlement than a bankruptcy. Because one thing I do is care for and work with animals, renting really isn't an option.