Planning on soloing a settlement. How/when to break the news to the CC

Hi Mcstiggs;
You are smart to do this on your own. I am not a solicitor nor do I work for them but you should check out the do-it-yourself website Zip Debt. If you google their name you will find their site easily. Even if you don't sign up for it, read their FAQ's and the blog on the site...lots of helpful info!

Anyway since I have been successful in settling 2 accounts now on my own, (waiting to hear about the 3rd one this week) I will tell you what worked for me.

I was over $90K in CC debt. I started by listing all of my creditors, and the amounts that I thought I would be able to settle with them for. (For example, I learned from this site that BofA typically will settle for 20% at 150 days, and that Chase will typically settle for 35%, and so on. Mostly I acquired this info from this website!) I then had an idea of what I had to come up with, or close to that, before I could start talking settlement. I knew I had to wait until my accounts were at least 120 days past due, and that the best deals would be made at around 150 days. I am now between 120 and 150 with all of my creditors.

In the last several months I have stayed in contact with my creditors. I would call them at least once if not twice per month and let them know that I am aware of the fact that my account is past due, but I cannot pay due to a decrease in my income. I then would tell them that I was looking for a second job (all this is true by the way) and I would keep them informed of any changes in my income. Looking back I can now say that staying in contact with my creditors actually helped me immensely now that I am in the settlement phase.

I'm sure that you realize that every time you speak with your creditor they are recording the call and taking notes. I would strongly suggest that you stop avoiding the phone. If they can't get a hold of you they will only call more; not to mention it will piss them off.

Do NOT mention the word settlement.....until you have funds to do so. Even IF you have the funds to do so, you really should wait until you are close to the 120 day past due mark. I recently settled a $40K balance with BofA for 17% payable in 3 installments. I settled an AmEx account for 55%/3 installments, and I am waiting to hear back from Chase on my most recent settlement offer. For BofA and AmEx, they were the ones to bring up the idea of settlement. I was the one to bring it up to Chase only because I have the funds set aside and it is past 120 days. I don't want to risk the chance that they may send my account to an outside collection agency.

It is all a juggling game. I don't know how many CC accounts you have, but I had seven. Two of the seven were with Discover. I learned from this site that Discover can be very aggressive and also difficult to settle with. When I was over 60 days past due with Discover, they offered to put me on a hardship plan. The payments each month are a fraction of what my minimum payments used to be. This gave me some breathing room and bought me some time so that I can save for my other accounts. Btw, I would not have known about this hardship plan if I had not been in communication with them.

With all of the slime ball debt settlement companies out there, I do believe that most of the CC companies are more willing to give a better deal with the individual. I also believe that there isn't a company out there that will work as hard as I will for my settlements. That being said, no matter what...the number one determining factor for successful debt settlement is and always will be having the funds to actually settle when the time comes. A good rule of thumb in determining whether or not debt settlement is for you is this:

If you will be able to come up with 50% of your debt within a 12-18 month time frame, then debt settlement may be a good option for you. Read as much as you possibly can on this site and learn how your creditors work. By researching your creditors you will know how to plan for the best settlement.

Good luck to you!

Thanks so much for taking the time to share your experience!
Much obliged!

Stiggs

sunnymay, Im glad to hear of your sucess and you are doing a great job, but yet i really dont agree with you when it comes to all your negative posts about settlement companies. Yes it is cheaper and better to do it on your own, but some people cant do that and to give settlement companies as a whole a name like scumbag is just not true. And they will work just as hard for you as you do if the way they get paid is based on a % of what they save you. Because they want to make money. So if you choose a company that basis thier fees on how well they work for you believe me they will work hard i know.

I used a settlement company and i could not be happier as to how the outcome of it turned out. So to turn everyone away of something that they may need is not right. The answer to your debt may be to do it yourself and that is great and im happy for you.

But not everyones debt is the same , so neither is the solution.

So sorry lovemythings if you were offended at some of my posts...that was not my intention. I do feel strongly though about debt settlement and the do-it-yourself approach rather than using a company. I guess you and I just have a difference of opinion. I am sorry that you feel I am being so negative. Gosh, here I thought I was a positive poster! I just simply feel that some people may learn from what has helped me so much.

When I started this process I did use a company that I spent a great deal of time researching. I paid them over $3000 and didn't get a whole lot out of it. At the time, I was scared to do it on my own. But as I got into it, I realized that I was definitely doing more of the work than they were. I dropped them before my first settlement ever took place and have not looked back since. My outlook is this: most people looking to do debt settlement are obviously not in the best financial situation. Every dime counts with debt settlement. Sometimes even a few hundred dollars, and certainly a few thousand dollars can be all the difference in the world. If you add to that the confusion of having to choose a debt settlement company...and figuring out who the good ones are and who are the bad ones (let's face it there are some bad ones) it can be an overwhelming task. I think that most will agree that no one will care more about your financial situation than yourself.

All that being said.....hey, I'm in this boat just like the rest of you. If your experiences with a debt settlement company are that of success and relief from debt, I am happy for you and also appreciate reading about it. I have been on both sides, with a company and now and my own, and I simply am utilizing the right to speak my mind about what I believe to be successful, in the hopes of helping other people. I have definitely reaped the rewards of reading posts from others in the past so I feel like it is only fair that I do the same.

For the record, I do not have negative opinions about any person who chooses to hire a debt settlement company - I simply believe there are other options that MAY work better, as they did for me.

Good luck to you lovemythings and everyone else! :)

Don't worry Sunnymay! You are right on with your advice for debt settlement and I for one can say that I have benefitted from reading your posts so keep up the good work I will continue to read all of your posts and yes I will NOT pay someone to do something that I can do just as easy and also better and I will never wonder if someone is ripping me off either!!!

Thanks dwz2009...no worries, we all have something to say here. Taking it all in is what makes each of us wiser.
Best of luck to you!

How does a settlement look on your credit?

It makes a difference how you can personally handle talking to the cc companies. We signed up with a settlement co. so that they can deal with them, they can stop the phone calls, they can give us the answers. It's worked so far, we've settled 1 account. We tried to do it ourselves with another account -- to save money. Didn't work, they were unwilling to deal with us, unwilling to take 70% of what we owed (we had been given money by a family member and were planning on using it), nothing except paying in full was their answer. We also were getting conflicting stories from different people. One would say they wanted to work with us, and then the same day we would get threatening messages on our answering maching saying we were not working with them, we ever avoiding them. I made notes, but have not done anything with it. WE added this account to our others and they are going to have to wait in line. It was HSBC they are horrible. Continuious messages on my managers voice mail, continuous calling at work after sending letters telling them no to. I couldn't deal with them. Some people are really good at doing this alone, i was not.

You have to wait until your account is past due enough usually 120 days at least of course if you just call up your credit card company they are not going to settle why would they?

Yes no matter what you decide to do you should let your accounts age a bit. Even if you could get your creditors to settle for 70% if you wait until the account is closer to charge off you will get a much better settlement offer.