debt settlement

daver,
you have to make sure u are using a reliable debt settlement company. You can still get sued if the debts have not been settled because you need to accumulate enough cash in your "savings" account. Getting sued is not the norm. I just settled 5 accounts using freestar financial.

someone told me about the web site zip debt,I found it very useful.I have done enough research to realize I need to try to settle my cc debt myself instead of using a company. Some have high fees and why pay them when you can put that money into getting rid of your debt yourself.

oakrascal;
Zip debt is great, I wish I would have stumbled upon it sooner. I spent over $3000 with another company to basically "educate" me about the whole debt settlement process. I swear I think I have learned more here just from reading all of the posts. However, at the time I was scared to stop paying all of my creditors and thought I needed someone to guide me. I sure could use that $3000 right about now.

Anyway on a good note, last week I settled my BofA account of $40K for $6500. I am pretty thrilled about it. Here is what I have learned so far, and what I think are the most important factors in being successful with debt settlement:

1. Stay in contact with your creditors. Be consistent with what you tell them. They are recording and typing every little thing you say. Take notes if you need to.
2. Most people can't settle with all of their creditors at the same time. If one of your creditors offers you a fantastic hardship payment option, take it. You may need it to buy some time to save.
3. Know your creditors! Some creditors will give you the best deal if you settle with them literally right before charge off. It is important to have a game plan as to who you want to settle with first, second, and so on. Read as much as you can on this forum about your creditors and you will get a good feel for what they will settle at and how many payments they will allow. Know who the aggressive ones are that are more likely to sue you. (Get those out of the way first, IMO.)
4. Most importantly: save every penny you have. Nothing else really matters if you can't come up with the money at settlement time. Think FRUGAL!

Well best of luck to you!

Spot on indebt2.

Settlement works when you are aggressive about saving and liquidating. The quicker you resolve debt with settlement the better to avoid courts. Lawsuits do happen and that can disrupt your goals and the time it takes to acheive them. All the same, if your sued, dont let it deter you. You can settle those too, just at a higher % than would have likely been available prior to the suit. If all else fails you can sign a consent to judgement to keep payments reasonable and avoid garnishment or bank levy. It is best to get pro-active the moment you receive a dunning letter from an attorney in your state or one licensed to practice in your state. Warning: this is not to say an out of state attorney letterhead should be ignored. The out of state firm may just connect to local counsel to litigate.

As always, you should consult with your own local counsel for legal advice.

Mileage may vary.

thank you both for responding. What is a charge off? and what happens to the balance that is left over? was just reading about the junk debt buyers,does it go to them? and then do they come after you?

Charge off is a term used by credit card companies for what happens when they sell your debt. Basically around 180 days of you not making a payment and being past due, your creditor will sell your account to a collection company (for literally pennies on the dollar) and write off that amount from their "books". Whatever collection agency bought your account will then try to collect from you. The collection agencies are almost always more agressive than the original creditor. In my opinion it is always better to settle with the original creditor before it goes to charge off, however some people think they have better luck with the collection agencies. Many collection agencies have attorneys working for them, so your chances of being sued can increase after your account leaves the original creditor.