Debt settlement and credit score

Marks on your credit should be avoided as much as possible just not at the cost of making things worse for your family. Credit is resilient and does bounce back. Your #1 goal should be to get out of debt as fast as you can. Once that happens you can start rebuilding: your credit score, personal wealth/savings, etc.

I agree with NICO. If you are a good candidate for settlement you are overextended and thus your score is either already negatively affected or about to be any ways. Get out of debt ASAP and then start rebuilding your credit.

Thanks for the replies. I am afraid at this point things are just going to get worse, so I might as well be prepared. I am going to start saving for possible settlements as much as I can. But I am curious how bad I should expect my credit to get now at this point ...and also how long the recovery process takes (I am willing to work at it).

2 BOA, 3 Chase, 1 Ge Money, 1 Citi. 1 Amex all settled. 1 Capital One not. Only the Amex got charged off and the others settled before charge off and my score went from 675 to 544. This is after 5-6 months of not paying and settling. I also went on a morgage program where I pay half a month. It is still reported to the agency. I have to settle Capital and settled with NCO for AMEX. I was pushen 100,000 in debt so I figure my debt to income was worse than anything else? Good Luck and do everything as quickly as you can.

Bill, none of the creditors sued you? How ugly was AMEX?

AMEX sent it to NCO pretty quick - like 120 days. They caught me off guard. I still did not validate with NCO and AMEX said to call them so I did and settled for like 40%. Nobody even came close to sueing I called every week or so. I had a legit hardship so I just told the truth. You have to find a way to get some cash. Friends, Family Etc. It was a no brainer for me ch.13 was a shitty option and I am insolvent so I can write off the 1099c for income taxes. Good luck and take care. Capital is the worst but it is a newer account. Now I have my work cut out for me with my wife's 3 accounts. WaMu, Juniper and Discover.

BLL, what do you mean you called every week? Was this after they started negotiating with you, or after you found you couldn't pay.

I have about 80K over 10 accounts...one is 20k alone!

I just started calling them every week or other week just to give them updates. I would suggest throwing the word BK around after around 4 months. I lucked out with a friend who let me borrow a big chunk of change to settle my BOA which was like 60,000 of my 100,000. If I could not have settled that I would have had to go BK. They settled for 12,000. I am going to have more trouble with my wife's accounts 27,000 because we have tapped all our resources. her company failed and we had a ton into it. So unless we can afford and arrange some long range settlement plans - a lawsuit might happen now? Good Luck.

BLL, your mix of cards is very similar to ours (3 BofA, 2 Chase, 1 Citi, 1 GE Money, 1 CapOne, 1 Discover).

On Citibank, I just happened to have a pushy CSR push me into getting their insurance a couple months back, so I sent in the paperwork once I was unemployment on that one. The payments and interest on it are frozen right now. Out of the others, Chase both offered hardship programs right away, which are fine for now. CapOne is very ugly and they do seem to stick to their guns (am getting BOTH late and overlimit fees on a $1000 card), but nothing I can do about it right now. Discover I have been on time with the most, so haven't heard from them. The remaining (BofA, GE) call often. It is driving my husband crazy, but I am the one that talks to them. But he is also the one that told me I should just stop paying all of them rather than trying to scrounge up the money. I think he is mostly getting tired of eating beans and rice. ;)

We have a few things to sell to round up some money for settlements, plus I have what I have been sending them I will now save.

To make a long story short, how were each of these to work with? I am really nervous because I have always been a "good girl" and these calls and all are just new to me. But it also makes me mad because if they tried to be nice and reasonable, and lowered interest, fees, etc, I would keep going and pay the whole balance ...eventually. But I am tired of the games and just want it gone. ...Ok, sorry, I am rambling again. :)

Stop paying every card you want to settle on and save. Chase settled for 30-40% range with 90 days to pay. Citi was the highest 55% but I jumped it because they gave me 12 months to pay. BOA was 20% 1 big hit. Amex went to NCO and settled for 40%. Ge was rough till the end then came in at 30% before charge off. I hate to say this but unless you stop paying and get out of their hardship programs it will just prolong the problem. Good luck. Anyone ever deal with WAMU or Juniper?

Has anybody had any dealings with Discover? I have $10,000 in debt to them alone and I have been able to keep up minimum payments but I've lost my job and I won't be for long. How long after you stop paying do you offer to settle? Do you send them a letter or do you call them? What is the procedure? I've got other credit cards also that I owe but I'd like to do this one at a time. thanks for your help.

Thanks for the help and advice. I guess I'm already halfway there ...might as well ride it out and get it over with. Thanks again!

I hear Discover is pretty tough. Plus a friend of mine stopped paying his credit cards in order to settle. After around 120 days Discover sued him. Noone else did. He had a good paying job, but lots of debt.

Discover is sooo hard. I settled with CITI, BofA, HSBC all for 20% and I had balances in excess of $30,000 with them. I owed Discover less than 5k and they would not budge until the day before I was to charge off. They settled at 40%, however my credit report reflects "charge off" with them. I'll deal with that later though, first need to settle with Amex. They are the last and seem really tough

You can try debt settlement or debt relief, your credit score might get affected a little for some time but you can be debt free and reduce your debt amount also. I can say from my experience that Freedom Debt Relief works better in debt negotiation with a goal of lowering debt levels. Their debt settlement program helped me to lower my monthly payment and also reduced my total debt.

I agree with rchrdle, she has the right idea about going with a company to do this for you. There's a great company out there called Lifeguard Financial that gets it so you only pay back 40% of your balances. Also, you don't have to have any money up from with them. They lower you monthly payments. You're credit score can be reduced by these programs, but as you complete them, your lowering your debt to income ratio, which will let you go on and rebuild your credit if you wish. They're lawyer backed, and are listed with the BBB.
It's great that you are trying to settle with the card companies yourself, but they challenge with that is that they are usually only willing to settle if you can pay the agreed upon amount upfront, and lets face it, if you need to settle because you can't afford the payments, they why would you have all that money upfront?
You can find them at the BBB by searching for Lifeguard Financial and choosing the one that shows up as 1st pyramid financial, Inc in Fort Lauderdale, FL.
I called to speak with them about their programs, and I've spoke to 3 different agents they have. If you are trying to get these debts taken care you should definitely give them a call.
The number, if you want it is (866) 753-5085, and try extensions 1026, 1031, or 1013.
Hopefully you won't be disappointed with what they can do for you.

I have 1 citi - 1 chase- 1 boa = $50K, had 6 figure salary and lost job - how soon after I stop paying can I start talking about a settlement?

Also worried about the 1099c - can someone explain the insolvent part for income tax purposes?

my settlement company settled with discover about 70% of the actual bill after about 1 year of not paying the bill. But they turned it into the irs for forgiveness and i ended up having to pay the irs 600.00 the next year, but it was still worth it. I think it is important that people know during settlement this can happen this is something that i was not aware of, that if a debt is forgiven, you will have to claim that as income on your taxes. Not that this was a bad thing i still came out on top, but that letter from the irs was a bit alarming. But they allowed me to pay on payment plans so it was ok.

Their BBB reports reflects an "A" rating. I checked them out after being contacted for a debt settlement program. I spoke with a guy named Tim who was very informative and gave me all the pros and cons regarding debt settlement. I saw other posts here about them when I Googled them and I thought I would just put me 2 cents in. I have talked to other companies in the past who tried to hard sell me into signing up but I think if I move forward with this option I will probably go with Lifeguard.

What was the situation with HSBC? I have been trying to work with them, but they are very difficult. I have also been reading horror stories about them. Any advice would be very helpful.

I absolutely agree....They are a shady company. The debt settlement process is quite complicated, Yet individuals from this company are trained to sell this product and enroll the client all in the same day. As a debt settlement agent and trainer i find it ridiculous that there are all these BOGUS posts and replies such as " They helped me and now i am debt free" or "I signed papers and the call stopped". Come on! are you serious? Does this really sound like a consumer.

Although i am in the debt settlement industry i will not tell you i am the only company out there. THIS IS WHAT I SUGGEST YOU CONSIDER BEFORE YOU DECIDE ON DEBT SETTLEMENT COMPANY:

1. TASC (tascsite.com) is the only honorable organization within the debt settlement industry. DO NOT LET ANYONE TELL YOU OTHERWISE!. ANY COMPANY WHO IS A MEMBER OF THIS ORGANIZATION ARE UNDER A STRICT CODE OF CONDUCT THAT THE ORGANIZATION PROCLAIMS. There are about 100 companies that you can research on this site. ALL OTHER COMPANIES CAN BECOME MEMBERS, HOWEVER THEY CHOOSE NOT TO REGISTER BECAUSE THEY VIOLATE GUIDELINES THAT TASC PROCLAIMS JUST FOR THE PURPOSE OF BEING MORE PROFITABLE.

2. NO COMPANY HAS THE ABILITY TO MAKE SURE CREDITORS STOP CALLING YOU IMMEDIATELY, IT USUALLY TAKES 90 DAY 120 DAYS AFTER NOT PAYING CREDITORS. ANYONE THAT TELL YOU OTHERWISE....PLEASE TAKE THAT AS A SIGN OF "ILLEGITIMATE COMPANY".

3. DOES THE COMPANY GIVE FULL DISCLOSURE OF FEES?
NEVER ACCEPT ONE OF THESE ANSWERS:
- "ALL FEES ARE INCLUDED IN THE MONTHLY PAYMENT?
- " FEES ARE 15 % " (15 % OF WHAT)

I HOPE THIS CAN BE HELPFUL TO SOME CONSUMERS OUT THERE.