plz help! Did I make a mistake by choosing debt settlement?

Debt consolidation is most likely not an option, especially if your DTI's too high. Debt settlement is not the easiest road, but it does work and 16 months is a great program term to rid of your 90K. You yourself know I'm sure that if you continue to make the minimum payments you'll most likely be out in 240 months or more. Stick with the program, you're almost there. The calls and harrassment do start to decline, just remember the first 3-5 months though can be rough.

I have been in a debt settlement program for about a year now, with the same amount of debt and credit cards as you. I also did a lot of research, and realized it was my only option. Debt settlement is a last resort before bankruptcy, when you have no other way out. But it has helped me tremendously, with five accounts being settled in my first year. The phonecalls do taper off, but be aware you can still be sued - I have received a summons from two different creditors but was able to settle both of them before the court date. This is a danger you run into, even if you settle yourself, because you typically have funds to pay only one at a time and some can get impatient. Overall, it has been an experience I wouldn't want to go through again, and have learned some important lessons! BUT, knowing I will be debt free in a short time, and able to rebuild my credit, is a super feeling. Just hang in there. Even if you are sued, most creditors are willing to work out a payment plan or settlement before it goes to court. Just keep plugging away at it.

SuzieQ,
Thanks for the motivating words! Can you tell me, what creditors did you receive summons from, and how far into the process did you receive them?

I got one from Advanta after nine months of non-payment on the account. It came with an alternative 10% settlement, which I was able to take, so that one ended well. The other came from Target, after ten months, and they did not want to offer a very good settlement. I told them I was in a program, and that they could negotiate with my company, but they put it off until the very end and offered only 79%, and it had to be made in one lump sum. I was able to do this through my program, but it made me mad because they deliberately waited another two months to settle, adding more fees and interest, so the 79% I had to pay was about the amount of the original debt. If you don't have to deal with Target, or can pay them off right away, you're better off. Thank heaven it was one of my smallest accounts.

Thanks SusieQ. I do have a target account but right now it is in their hardship program. They are offering me that program for one year and the payments are very small. I took it because I figured it would buy me some time.
By any chance did you have any accounts with American Express or Citibank? I am most nervous about these two, especially because I won't have their settlement amounts for another 8 or 9 months and they are already 3 months past due.

I do not have any accounts with American Express. I have two with Citibank, and those have not yet been settled. They will probably be the next two I work on. They have both passed through a couple collection agencies, and there is a very aggressive one trying to settle one of them now. They have offered 50%, which is okay, but I am holding out for better, to allow for some time for funds to build back up in my account.

What debt consolidation company are you using? I have a lot of retail cards floating and then a large discover card bill resurfaced today with a 10,000 balance. Its from 2004? I get several calls.. I'm afraid to answer the phone. I returned back to school full time, I'm a mom to an eight month old and I work part time... my dollar is really stretched (baby food? omg!). I can't even begin to know where to start, how to pay, anything.. And I don't want to start getting sued! I really want to get a hold of this debt. I live in NY.

nmichellek - I'm in the same spot you are with Amex - 3 mos late and very nervous. Have you been sent to an outside CA yet? I'd love to see your updates on this site. I'll post mine also as it moves along

Smurfyoyo, I am in a Debt Settlement program, not a consolidation program. I am with Superior Debt Services out of Fort Collins, Colorado. But checking out a consolidation program would certainly be a good thing for you to do. Check out all your options - consolidation, debt management, and settlements. If you don't have any extra money for paying on or settling the resurfaced account, you might try talking to a credit counselor and see what they suggest. Or even talk to Discover and see what they might be able to do. Everyone's situation is different so not all programs work the same for all people. Check out every option available to you - using the search box on this site is a great help.

I am not a fan of debt settlement at all! Your creditors are under no obligation to deal with anyone other than you. Because your credit balances transfer from one agency to another your phone calls will not taper off. It's been one year for me and not only are they calling my house non stop everyday, but also my cell phone and my job before I was laid off. My debt negotiation Co. never interceded. Your $90,000 will skyrocket because of interest rates and late fees. The final amount they settle for (say 40%) will be based on the amount owed at the time of settlement.

For example if you had a $15,000.00 debt you will pay the negotiation company 15% of that (which is $2250.00) with late fees and interest you can expect a 20%-25% increase in the original debt. (at best $3000.00) The debt they settle on is the $18000.00.
40% of $18000.00= $7200.00 + $2250.00 (negotiation fee) = $9450.00.
With a beginning settlement balance of $18000.00-$9450.00= $8550. debt forgiveness that will be taxed by the IRS. ($1539. owed to IRS) debt settlement companies don't tell you about that. So starting with a $15000.00 debt you will end up saving $4011. (about 27%) This is the BEST case scenario with numerous harassing phone calls. It will probably not go as smoothly as I laid it out.

By my calculations, you would be paying $68,364.00 (interest/late fees at 20%, debt reduced to 40%, Debt Settlement fees 15%, taxes owed IRS at 18% for debt forgiveness). This amount divided over 16 months is $4272.75 a month (at the risk of sounding redundant... this is best case scenario). Be leery of ???????cheerleader??????? posts for debt settlement options. Many of these companies I believe post here as a guise to dignify their trade, and if you read around the site, it is probably a 1% success rate.

It has been a year of hell and stress for me, not one settlement, and balances are so out of control, we are probably going to have to file bankruptcy anyways. Sorry for the doom and gloom, but I could be living your future!

Hello again. Well I am working with a company called Consumer Recovery Network. They work a bit differently by the fact that they give you the option to settle the accounts yourself or you can let them do it for you. They are endorsed by Geri Detweiler, if that means anything to you. Even if you choose to settle the accounts yourself, they assign a debt coach to you to guide you and answer any questions from day one. So far I am dealing with all of this myself, but since I am unfamiliar with what company will typically settle when and for what, I felt I needed the advice of professionals in the industry. It is very scary, still, but I feel good about this company....I researched it for quite a while, and the information here on this site was and is extremely helpful. If I hadn't joined CRN I would have probably gone the do-it-yourself route with ZIP. I just felt like I needed someone to hold my hand. Their fee was $3600, (broken into 3 payments) and that will be it if they do not do the actual settling for me. IF I ask them to take over with the settling they charge their fee based on their results, so it is in their best interest to work for the best deal possible. Regardless they have really educated me about the process, and if I don't know what to do I can just call my coach and he will steer me in the right direction, no cost to me.
As far as my creditors go, so far just phone calls. I stay in touch with my creditors every week and explain to them that I just don't have the funds. My outlook is that I should be able to settle with everyone in the next 12 months, but things will be very tight here at home. It will be worth it if I can get out from under this debt! I have been through credit counseling for over a year and didn't get anywhere; the lower interest rates that they got for me were great but when your balances are as high as mine are I would still be looking at 7 years or so before I would be debt free, and that is without using the cards at all. In my opinion you must be under the 2 year time frame for savings for debt settlement to be a good option. And as SuzieQ has stated it is not for the faint-hearted!
AS far as AmEx and Citibank go, I am going to keep my fingers crossed. So far I have only had to deal with phone calls from my original creditors...they have not gone to any collection agencies yet. I know it is going to get uglier. I am pretty confident I can handle the CAs.....I just don't want to get sued. Even though I know that does not mean it is game over the thought is so incredibly stressful. If that happens I don't know what I will do for sure.
This website is a blessing. Knowledge is the best weapon in this crazy game!

A couple things you could do to improve your success Totally Mislead as follows:

1. Settle on either the originally balance minus discounts or the charged off amount minus discounts which will reduce both the main amount settled at and the tax owed. Basically try to force the collector to remove all the fees they tack after first delinquency.

2. Make use of the debt validation letter and the Cease and Desist letter to stop the phone calls. Force them to contact you via mail only.

3. Change all your contact numbers and make sure they are unlisted. Call from a secure line so they don????????t pick up your phone number. There is no reason to deal with a collector on a day to day basis.

My fee was calculated by the amount of debt I entered the program with. I am curious, Totally Misled, as to what company you were with, because I haven't heard of any legitimate company that charges a "negotiation fee" based on an amount with interest and fees added to it later. There are a lot of shady companies out there, maybe even MOST of them are. Anyone entering a program HAS to do their research, look them up on the BBB, etc. And I personally am getting REALLY REALLY TIRED of those of you who have had bad experiences assume some of us who actually are having success are "plants" sent here by some companies to drum up business. I have made a lot of posts on this site, and don't even mention what company I am with unless asked. Also, being taxed on the amount of forgiven debt is common knowledge for anyone who has done the TINIEST amount of research on settlements. It sounds, Misled, that you simply didn't look into the process well enough before you started, and got involved with a bad company. You can't blame the entire industry for that. You can try to do some of the things DollarsandSince mentioned above (#1 and #2 are pretty basic when going through a settlement), or at this point, just try to negotiate your accounts yourself if you feel your company hasn't lived up to your expectations. Contact your creditors yourself and work out some deals.

[color=DarkRed]I work for the w w w dot stallion debt relief dot com. we have a great success rate and have helped a lot of clients with their unsecured debt. Please call the 800 number on the site and ask for Nicolette I would be glad to answer any and all questions that you have.. it's a great option!!
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