DIY Debt Settlement - has anyone been successful?

I've been doing it by myself - just stopped paying and waited for the calls. I had the normal hard luck story - no job, short sold my home and 100k in debt so I just kept telling them my story and the settlement offers started to come in. Borrowed some $ from family & got some for Xmas which helped with the lump sum payments. I spent hours on this site before deciding to not go with a settlement company and I'm glad I didn't. I've settled 4 cards, went on hardship payments on 3 and have 2 more in settlement negotiation.

I settled my debts in 2002. I was 4-5 mos behind. Total debt around $40,000. Average credit card balance $4500. The banks jacked up my interest rates, lowered my credit limits, and then because I couldn't pay down the balance, charged an overlimit fee. I got almost physically sick I was so upset.
All the while I kept working hard at my limo business.

I got a big check from a customer for a long overdue payment. Then I wrote down a spiel what I was going to say, drilled it, then called my creditors and offered settlements. I started at 20%.
I would say "I have 32 creditors (I did) and there is just not enough to go around for all of them. If business doesn't get better I'll have to start looking at other options. I have $1200 (for a balance of $6000), if you want to settle this." Then let them talk.
Only Fleet Bank, the greediest of them all, accepted 20%. The rest said that was impossible, their policy said they can't, etc. Then they would counteroffer me. A counteroffer is good. It means they are interested. Was kind of like buying a car.

I averaged 42% overall. One bank said they appreciate me settling as an alternative to BK. They were all courteous and ez to work with.
I tried to settle with 2 cards that were 1 mo behind. No dice.

My tips: Unless the bank believes you might go BK or they won't get their $, why should they settle? The picture they see must be that you can't pay, due to your situation. I would first consider credit counseling, where they cut your interest + fees, but you pay all the principal. I did this on the last 2 cards that wouldn't settle.
Write down what your max amount you will settle for is. (Don't tell the collector, of course.)
Write down beforehand what you are going to say. Drill it. Have your wife be the collector, you be the debtor.
Do the highest balances first.
Do all the creditors in a week or two. The settlements will reach your credit reports.
Walk around psyching yourself up. I did it. I feel it works.
Don't offer a %age. Offer a dollar amount.
Don't say you don't have any $. Everyone has $.

Be courteous, never lose your composure, never get angry, never threaten.
Best to offer to settle BEFORE it is charged off with the original creditor. If it goes to a collection agency, they want a commission, plus the bank wants one, plus the agency feels it can pressure it out of you. So no room for a low settlement. I had one go to 3 collection agencies before they really got it that I wasn't paying without a low settlement (I got 40%).

If they won't go for it, it's fine to say you will think about it, or you can't handle that amount. Then call the next guy. It's also fine to call them back and say you will take their offer.
Always in writing of course, before any funds are transferred.
Once a deal is made they want it done FAST. Best to get the settlement letter by fax. Then fax a check. Call to ask if they got it.
Don't be embarrassed. The collections person probably does this everyday. They know the economy is rough. They want what you have.

great tips above....I too have been somewhat successfull.
In all I have 8 accounts totaling 127k. The only 3 left are AMEX, BOA and Discover.....all willing to negotiate. Current offers after 120 days deliquent are 55% or less. Good luck to you.
Don't hire a settlement company unless 2nd to last resort.

I'm in a debt settlement program, but my best settlement came from one I handled myself outside of the program. I got a 10% settlement offer from Advanta on a $22,000 account after nine months of non-payment. They do not deal with settlement companies. The alternative was the summons that arrived the same week. Needless to say, I settled. Had to borrow money from family to do it, but managed it.

10% with Advanta ? You did good. They "charged" me 43% ! Balance of $6867 and they settled for $3000. I was 6 mos past due. This was in 2002.

Yes, someone at that company was in a good mood the day they decided to offer that. If I had not been able to borrow the money ($2,200, still a sizable amount) to pay it though, it would've been a different story.

I have a 17k debt right now and waiting validation before I start to negotiate with a CA that has not validated anything yet.

I have just settled $75k in cc debt for $15k on my own. I truly believe when you do it on your own its best. The reason is that it takes ALOT of effort and time to work these creditors down to the 20% -25% mark and a debt settlement company can't give that much individual attention to each client. Each time I see ppl who had debt settlement companies do the work the offers were 40%-60%. Only you can put the effort in for yourself to get 20%, I got 20% with creditors that have reputations of NEVER settling low. Tips: 1) ALWAYS answer the phone to creditors, just tell them you can't pay and would like to settle for 20%. You will most likely get rejected over and over again, one creditor and I had this same conversation week after week for 6 mos before they settled at the 20% I had said all along. Plus if you answer the phone, you won't get so many calls, most creditors will only call 1 time per week if they reach you and you say "can't pay" 2) have thick skin, most of the time I was calm and nice so they were the same saying "sorry for your hardship". Once in a while I got the nasty collection agent and I would just laugh at what they were saying. Never take it personal, they are just doing whatever they can to collect. I guess if they intimidate 1 out of 10 people into paying, it's worth it to them. 3) save EVERY penny, as lump sum offers that can be paid immediately, this is when you get the best deal and 4) write a letter detailing your hardship down to every last thing (i.e. house in foreclosure, no job, no 401k, borrowed everything from 401k, no savings, lost stock investments) show that you have no assets and your not good law suit material. If you live in a state where your wages are protected from garnishment, state that too. Also state your settlement offer in each of these letters. Then fax to all your creditors and see who responds. Some will respond right away, some will take some working. Good Luck, it's the best feeling when you get to the end of the long road that's ahead of you.

btw, busguy1 made a good point. don't say "settle for 20%", calculate 20% of the balance before speaking to them and then say "all I have is $xxx to settle". When you speak in terms of % they can assume "you've researched and just trying to get low amounts". Let them think the "20% amt you calculate is all they can get out of you as its all you have. With all companies that settled with me, I always talked in dollar amounts, never in %.

For those of you who successfully settled debt on your own, how did you start? Some of you mentioned to talk to your creditors and offer a settlement. Well I am just starting the process and starting to get the calls but do not have a sizeable lump sum saved up. Should I hold off on answering the calls? I would hate to answer one and ask for a settlement without having the money ready.

I've read many responses and I haven't read any like mine. I would love some advice too. I am 24k in credit card debt. Now the difference is I can pay my debt comfortably each month. I just don't need all this debt which I know will take forever to pay off but I can pay on! I recently started inquiring into debt settlement companies. The problem is some want me to have my credit payments to go delinguent and or pay them outrageous fees that do not go toward paying on my debt. Now, I have tried to take out a loan to consolidate my debt but have not been sucessful because I do not have any collatoral. I spend $800 monthly on minimum payments of 11 credit cards and the apr on about 6 of the are at 24% the lowest is 15%. In desperate need of advise and my cards except 2 are cut up! I have learned my lesson and I really did know BETTER!! Any suggestions will help!

I've read many responses and I haven't read any like mine. I would love some advice too. I am 24k in credit card debt. Now the difference is I can pay my debt comfortably each month. I just don't need all this debt which I know will take forever to pay off but I can pay on! I recently started inquiring into debt settlement companies. The problem is some want me to have my credit payments to go delinguent and or pay them outrageous fees that do not go toward paying on my debt. Now, I have tried to take out a loan to consolidate my debt but have not been sucessful because I do not have any collatoral. I spend $800 monthly on minimum payments of 11 credit cards and the APR on about 6 of the are at 24% the lowest is 15%. In desperate need of advise and my cards except 2 are cut up! I have learned my lesson and I really did know BETTER!! Any suggestions will help!

I am about 30,000 in debt. That includes 5 credit Cards and one unsecure loan. I Started dealing with a debt settlement firm company. They have been collecting monthly the amount of $360.00(for 3 months now) and they say that before any settlement, there has to be at least 40% available of each creaditor's balance. They said they are working with all my creditors and that most of the time they do reach a settlement. Does anyone think I'm not getting a good deal here, did I make a bad choice to go through a debt settlement law firm office?????

I was 120,000 in the hole. Wife's company went under and I had to make a choice. A small ch. 13 and have the government up my as- or try myself. I caught a break early 60,000 was with BOA and they settled for 12,000 1 payment where a friend saved me. After that I settled most all before charge off. Some at higher % but they gave me time 3-12 months to pay. I have around 26,000 to go. I am tired of it and might just get on some hardship programs with the rest. Only thing that keeps me from doing that is I allready dropped my credit score to 544 so why not just torture myself for another year and be done. GL

2muchdebt, it's not just the settlement companies that want you to go delinquent to settle. No creditor is going to settle for a lesser amount when you are current with your bills. They feel that if you can and are paying, you can afford it. You might look into debt consolidation or debt management plans. There are a lot of methods out there for getting out from under. Settlements are a last resort before bankruptcy, as letting your accounts go delinquent really harms your credit score for awhile (although it will bounce back pretty quick once you get it all behind you and work at restoring your credit - faster than with a bankruptcy). Beware of calling and asking for hardship payment plans though - have been reading alot on these boards about creditors just closing accounts if they think someone is hitting some hard times.

Tony777, I am in a debt settlement program and it is going well. If I hadn't had the huge amount of debt, or nine dif. accounts, I would've tried to settle on my own, but felt I wanted professionals to do it for me. Nothing wrong with settling on your own, I just didn't want to take the time to make the effort to do it. That said, your company should be in constant negotiations with your creditors, and as money is saved, begin to settle the accounts one by one. Some of mine got paid in a lump sum, some were monthly payments. Just depends on the creditors. Hang in there! The fact your company is also a law firm should make things a little easier.

I'm going to try and settle my debt on my own. I have approximately $100k to work on. For those of you who have been successful negotiating with the original creditor what address did you send your offer letters to? I tried calling my creditors for an address but they wouldn't supply one. Would it be to the payment address or the corporate office?

Whenever I have negotiated with a creditor I always preferred contact them by phone.

I just asked for a fax number to the settlement dept. They have that, if they deny you, keep calling until someone gives it to you.

You can send documents to any address that is for a credit card company. We'd even have people bring docs to our actual office and leave them with the receptionist. Eventually, the docs will get forwarded to the right place - it may just take extra time. I would say getting the corporate address is probably a waste of time. Just like every other company, the CEO's are not the ones your going to be down and dirty with in the trenches trying to negotiate. Mail that is included with your payment will end up in the right place or probably the best thing to do is to request the "collections correspondence address." Like an above poster mentioned though, you are generally better off talking numbers and offers over the phone. Of course, you want any actual agreed offer sent to you in writing via mail or fax before you pay.... but you're pretty much never going to be able to just send a company a letter saying I want to settle for XXX and get them to send a letter back saying OK. They are always going to want to talk with you about it.

I have been very successfull with diy settlement with the help of purchasing zipdebt .com. This is an exellent program, walks you through the entire process and saves a ton of money vs hiring a prof company. I also have done all negotiations by phone.

SusieQ, Thanks for the info. I will hang in there. It's been hard but I am also starting to try to save money on the side little by little, it is really hard but even if it is little amounts in to a savings account I know it will help to accumulate for one of the accounts.

I also used zipdebt.com and it is AMAZING! I had settlements in the 25-50% range and received the biggest savings on the largest debts which was nice. I'm down to one Advanta account left and I'm done. They are the worst but I am stronger.