Last day to contact CC - help please

Do you have any lump-sum?

I don't...that is the problem...

Last time I spoke with them, they asked if I had any 401K or savings, or a friend that could help...- after ensuring them that I do not have those options, the representative told me "the bank" will regroup to see what is the next step.

Hello.
It would help to know who the creditor is. Also what is the exact wording on the letter - do they use the words charge off?

If you truly can only afford $100 per month on a $40K balance, you really aren't a good candidate for debt settlement unless you expect to come into a large amount of cash in the near future. (Tax refund???) Have you talked to your creditor about a hardship program?

Hi Sunnymay - They did use the word charge off in the letter and they had a commercial advertisement about using tax refund to reduce debt. I have talked to them (boa) about the hardship program and they send a form asking for detail financial statement.
I have filled the form and it turns out I am about $1200 short every month :( This is the by product of a costly divorce and having to support 2 households. I might be able to gather about 2-3K but that is the absolute best scenario.
They also said two different stories about the hardship program. One person said it will be 1% payment for 60 months and that is the end of it. The second person I spoke to 2 weeks later said it is a 1.85% payment per month and for 7 years. Then would not send it in writing.

The only silver lining is that my situation with this hardship will last for only 3.5 more years. Then I should be cash flow positive.

Okay, well assuming that this is just ONE account that is $40K, I think what I would do is try to get the hardship program going...whatever they will offer that will give you the lowest monthly payment. Then I would try to save save save as much as possible with the intent of settling in the near future. I would visit this website at least a few times a week and search for posts about BofA, to keep up on how and what they are settling for. Right now, they will settle at 20% after the 120 day past due mark, payable in 3 installments. However that does not mean the rules can't change. With the economy being the way it is anything could happen...even debt settlement could some day be a thing of the past.

At least by getting into the hardship program you are keeping your debt with BofA vs. some cut throat collection agency. I recently settled with BofA (in February) on a $40K balance just like you....for $6500, (17%...I got pretty lucky!) payable in 3 monthly installments. If you can get together $3000 you are half way there in having enough saved to settle...assuming that they will still be settling around 20%.

When I agreed to the settlement with BofA they were pretty accomodating with putting it in writing but they would not fax it immediately. They insisted on snail mailing the agreement but the following week I called back and spoke with someone who faxed it right to me within minutes of our phone conversation.

You will get through this! Just stay in contact with them and stay informed, knowledge is your best friend in this crazy game of debt!!! :)

Hi Sunnymay - Thank you for giving me more hope..It means a lot...
How would I be able to get the lowest possible settlement? your experience is priceless and I appreciate any points I could get.
Thank you!

Okay, well, this is what I did and it has worked for me.

1. I stayed in constant communication with BofA. I made sure I spoke with them at least 2 times per month but it usually ended up being more. I answered the phone any time I could when they called.

2. I explained that my income was reduced at work. Earlier on I explained to them that I was looking for a 2nd job to supplement my income but was having a hard time finding one, especially when I had to work around the hours of my current job. My reduced income was NOT a temporary thing....more of a permanent one, so they knew that my situation was not going to turn around any time soon. I am pretty sure that was key in them deciding to offer a settlement.

3. When the topic of settlement finally came up, they went through a checklist of all of my debts/bills/expenses and monthly income. They were obviously trying to see if I truly was in a position where I could not afford a monthly payment. I had to go over these amounts with more than one rep, so it was important to be consistent. I'm sure they have some sort of formula that tells them if I fit into their settlement category. I guess I did. Oh yes and no point in lying about things that can show up on your credit report...they will have it sitting in front of them guaranteed.

4. I made a good connection with a couple of the reps. BofA has their employees set up in teams - 3 or 4 people to a team. If you find one that seems sympathetic to your situation and you feel like you can work with him/her, do not be afraid to ask for their extension, and deal with them only. I think half of the time it just matters if the person on the other end of the phone pushes a little harder for you or not to get a settlement approved. Side note: it pays to be nice and appreciative to ALL of the reps.

5. If possible, try to do all of your settling at the end of the month. The companies set goals for employees, and I believe the best deals are made in the last week of the month.

6. Above all SAVE SAVE SAVE! None of this matters if you do can't save the money for settlement. Prepare yourself for having to come up with more than expected, just in case.

Worst case scenario for you: you stay in the hardship program and in a few years when you are in a better place financially you pay the damn thing off. You are in a good position because you are still being offered the hardship program. Stay connected with what is going on with debt settlement and if you can get the funds together you will be prepared!
Good luck to you! :)

THANK YOU SOOOOOOO VERY MUCH!
I will be calling them in a few hours to get this ball rolling!
Your recommendations are very helpful and thank you again for sharing your experience with me.
THANK YOU, THANK YOU, THANK YOU!!

You are so very welcome! :)

Hi,
I made a call and they did not even bother with the financial statement I had prepared :) They could not accept the $100 monthly payment since it was too low, but they make an initial offer of 35% settlement. this is a significant reduction, but not affordable yet. I will call them back next week to let them know how much $ I can come up with. They also mentioned that there is no guarantee that this offer would be around next week. (I hope it means next offer will be lower ...) . Thanks very much for all the help on this. Will keep my fingers crossed!

Hello again!
I KNOW they will come down more. I did read a post somewhere on this forum about someone getting 10% but that was just one post... and obviously that is pretty rare. The closer you get to the end of the month though, the more desperate they will become. If you think there is ANY way to scrounge up between $5000-$6000...any way at all... I think you have a great shot at it. How is your credit? Any chance in taking out a small loan at a local credit union? A personal loan of $6000 at a rate of 9.5% for 5 years has a monthly payment of $126.00. Credit unions are usually more lenient when it comes to approving loans. Just a thought.

I know that if BofA charges off your account, you will then be trying to haggle with whatever collection agency or lawfirm buys it. If you get lucky enough that it goes to an agency that doesn't try to sue you, you will still most likely have to fight for even a 40% settlement offer. BofA is just one of those companies that you REALLY want to try to settle with before 180 days or charge off happens. The savings are too great. So if there is any way to make this happen, I would do it.

Don't lose hope...I'm not trying to scare you...just being realistic. The chances of you getting a 10% settlement seem bleak but anything is possible. In the meantime I would really rack your brain as to how to come up with about $6000. My heart goes out to you...I will say a prayer and send some good vibes your way that everything works out! Hey it can't hurt! :)

That is an excellent idea! Getting a small loan will be within the budget! I do have a question: When I was talking to the Bofa, over the phone they said I would need to make an initial payment right then (over the phone) once a settlement is agreed on; The payment would end up to be close to 5% of the agreed amount. However, what would be the proof that such payment is actually make if there is no signed contract? Did you make any payments prior to getting a formal agreement?
Is it safe to make a "place holder" payment? Your advice is most appreciated! thanks very much!

I am going to post my question about making payments without having an written agreement as a new post for a wide audience as well.

hello! Yes, I had to do the same thing. I got the settlement agreement with BofA in February. I had to make an initial payment of $653 by the end of Feb in order to get the deal. I was also nervous because I had nothing in writing. However, I was willing to risk the $653 in order to get the deal. I have 3 payments left: $1710 due at the end of March, $1710 due at the end of April, and $2427 due at the end of May. BofA was supposed to "snail mail" a copy of the agreement in writing, but I have yet to receive that in the mail. I did however call back a week after they took the $653 and they faxed the agreement to me in writing.

A lot of people on this forum will say to NOT pay anything unless you have it in writing first. I don't know why these creditors can't just fax something to you BEFORE the first payment....but for some reason I have had a hard time getting reps at any of my credit card companies to do it. BofA didn't want to do it, neither did AmEx or Chase. So far I haven't had a problem though; everything has been on the up and up. I think if I were dealing with a collection agency I would be more concerned, but since it is still the original creditor I am okay with it... I guess. With BofA I felt like I was kind of at their mercy, so however they wanted to handle me getting such a good settlement I was willing to go along. Now that I do have everything in writing I am confident about the deal.

Another thought: I have read about people on this forum tape recording the phone conversations when making the verbal settlement agreements over the phone. By doing this you could verify verbally with the rep that your "place holder" agreement is definitely going towards the settlement amount and have it on record. I really don't think you will have a problem, but if you are still uneasy about it ask them how soon after you make the initial payment they could fax the agreement to you. If you don't have access to a fax machine you can sign up for on-line faxing services (very inexpensive) which take incoming faxes and transfer them into word documents and email them directly to you.

I hope everything works for you! Keep the forum posted I will be curious to hear how it turns out for you! :)

Hi sunnymay! I was so looking forward to hear from you :) since they said to make something right then, it made me feel a little uneasy simply because over the past few months that number has changed a few times. I was not sure if it was something like a commission the reps get for themselves or would it actually go toward the balance. Recalling the phone conversation, the rep at BofA said after the initial (few hundred $) payment, the remainder will be made in 3 payments.
I will be calling them again today to offer them what I could have as a loan. Thanks very much for your suggestion. Chase will be my next cc to work with. I am hearing horrible stories about them raising the % rate to 27% when you miss a payment. Not looking forward to that battle yet...taking it one step at the time. I will update this post when I talk to the bank; Thanks very much for sharing your thoughts. It is VERY helpful.

Hello again!
Yes Chase can be a bear to deal with...I just finalized my settlement with them literally last week. I could only get to 40% (account is over 120 days past due) but I know a lot of people on this forum get down to 35%. Maybe if I waited until next month I could have gotten the 35%, but then again I would incur another month of a high interest rate, plus late fees, etc. When I did the math it made more sense to me to take the offer and forget about the 5% difference.

Next on my list is Citibank....ughhh! I have heard they are awful to deal with, but I have come SO far from where I started that I am optimistic. Honestly if I had not gotten such a great deal with BofA I would have been limited as to what I could settle with at Chase, which in turn ultimiately will effect Citibank. It is all such a juggling act. I should be done with everybody though by the end of the year.

This is all such a learning experience, isn't it? A hard lesson to learn! When all of this is done for me I will NEVER get into this position again! :)

kljkljkl;

That is excellent accomplishment on your part! Good job! It is great to see the light at the end of the tunnel :) I am so looking forward to being debt free and starting over again...it is great to see that there is hope and there are real people that are coming out of debt in this life time :) I was working on the my cc debt one at a time, meaning do the best to stay current on all that I can and work with one cc - settle that and start working on the next one. I somehow wish I would have dealt with them all at one shot and get it over with - so when all goes well I am looking at being out of debt in a few years - but still in this life time :)

OK..called them and told them how much I could come up with. They will be calling me back before end of today. They are being very professional and nice. Do they tend to bargain for more money as a routine protocol?

Update: they refused to accept the settlement proposal because they say I am current on all other accounts. They suggested I take a cash advance from other CC's to settle with them at 35%- shifting the debt problem to other banks. Seems like I should have been late on all credit cards and by not doing so it is working to my disadvantage... Any suggestion to what the next step should be? Thanks.

They also told me to call back either way to let them know what I have decided to do. They are "encouraging" me to take the deal now and deal with other CC's later. Arrrrr!

Wow, how frustrating. Yes they can see your creditors as they for sure have a copy of your credit report. With debt settlement you can stagger the accounts a LITTLE bit but basically you do have to stop paying on all of them relatively around the same time. I'm not sure what your options are at this point, but I wouldn't give up. Are your other credit cards considerably smaller? Are you close to the limit with your other credit cards? You could argue with BofA that your other credit card accounts are so much smaller which is why you are able to stay current with them. Remember they can see your balances and credit limits on your credit report, so if you definitely have the room to transfer balances they can see that. How many other credit card accounts do you have?

How past due are you again? What is the exact date that you will be at the 180 days past due mark? After 120 days I believe your account goes to a whole new "team" within BofA. You may have to give it another 30 days if you can, but I would even try calling back at the end of this month...like on the 29th. Now they have record of you wanting to settle. They aren't going to sell off your account until they absolutely have to. BofA is desperate right now.....they may just be trying to challenge you to see if you cave.

All that said, the bottom line is.....how much can you realistically come up with, and still afford all of your other bills?

Hi, I have 5 other card in addition to BofA that are current and the balance on them are much lower so 100 per month on each will almost satisfy the minimum balance (75-130 is the range on each card). I am not maxed out on other cards but in most cases I am close to 50% line. I have one card that I pay off every month in full and that is what BofA is targeting now. I have close to 60K line of credit on other cards with close to 30K used in all. I told them I could come up with a 5.5k lump sum (which is a loan at 10% payable in 4 years) and that is the max I can afford.
I am over 120 days over due on BofA and have another 2 months to reach 180 days which will be the charge off day.
Taking a cash advance on any cc will be a financial suicide for me given my job is not secure and I may loose it any week. Given that I have to support 2 households, the open credit lines will be my only survival tool _ and I mean that literally. It is getting a little frustrating :). I can NOT afford to stop paying other cc's because if the fees get increased I will be paralyzed financially more than where I am now.

The idea behind the scene was to keep 5 cards happy and work with one, the largest one. Rather having 5 angry banks after you. Not sure if that was the right choice. May be I should stop paying the rest of them now too?

The other option is to take the 5K as a loan now and pay off one of the other cc's in full. But given that I have a negative rating on my credit report from BofA now, some cards like amex is reducing their credit line in "fear" of what will happen to them next. so I guess my point is I am now officially starting to panic. (deep breath in...)

Don't give up on BofA yet. I think they will come down a bit. How much do you think you can get approved for with a loan?

I was looking into getting a private loan for about 5.1K - I could take a cash advance out of another cc too, but it would still be around 5k. I could only make a little over $100/month and taking a private loan + taking cash advance from a CC may not be doable since the min payment will be at least 200/month. I may be getting a little tax refund that would push me much closer to 6k (private loan + tax refund). Thanks for your supportive thoughts! I keep on this. Would you recommend I stop paying other cc's now as well? Given that having them "current" is working in my disadvantage...what are your thoughts on this? Chase is next.

Well, if you attempt to settle with Chase in the very near future they will see that you were behind with BofA, so you shouldn't have the same sort of problem. However, chances are pretty good (since you are still current with Chase at this moment) that by the time you reach 120 days past due with Chase they will be able to see that you settled with BofA from your credit report. That doesn't mean that THEY won't settle, but you will have to have a good reason as to how you were able to come up with the settlement money for BofA but not the Chase minimum payment. That is one of the reasons why you pretty much have to go delinquent on all of your accounts at the same time (give or take 1-2 months max in my opinion). But hey, hindsight is 20/20 so don't worry about that now.

I think if I were you I would continue to pay my other creditors (if you can) and just deal with the BofA issue right now. Since your BofA balance is a hefty one it is completely rational why you stopped paying just them....unless you have another card with a $40K balance. I would NOT take a cash advance on any of your cards. The reason for this is if you do intend on settling with other credit card accounts...even say a year down the road...cash advances and balance transfers are VERY much frowned on when your creditor considers whether or not they will approve you for a settlement. Some of them even consider it to be fraud if you take a cash advance or transfer a balance and then stop paying that account with the intention of settling. It isn't worth it.

I would beg BofA for more time. I know you mentioned in your original post that you received a letter with a last chance settlement deal, but if you are at the 120 day mark you really do have 60 more days. Tell them you are going to do your taxes, apply for a loan, talk to family members, whatever to stall for more time. Tell them you won't be able to afford the payments with you other creditors if you transfer balances around...that you are barely making ends meet as it is. Next week call them back again and tell them you are still working on getting money together...so they know you are serious. Call the week after that, and the week after that just to reassure them. I am almost positive that after 120 days your account goes to a new team of BofA employees so maybe you will get someone that you connect with a bit better. I have heard of people getting amazing deals...like on the 175th day of being past due....just 5 days before charge off! Just be VERY certain how past due you are, and what your charge off date is. You will probably get the same deal in 30 days from now as you will in 60 days from now, so try for next month.

Oh yes one more thing. BofA will almost for sure come down if they can get your payment in one lump sum. If I was in your position I would do my taxes (efile!), find a good credit union (rates are low now...even if your score isn't great) and just try to scrounge up as much as possible in the next few weeks. Then you can call BofA and say..."hey, I want to settle with you guys so desperately...I will pay you $6000 today if we can settle this account." I think you will have a really good shot at it. If you have anything you can sell on ebay, have a spur of the moment garage sale, whatever you can think of! This can still work out, don't give up!

Hello! Good news! BOF did settle for 25% based on getting 3 payments (first being larger and 2nd and 3rd at equal amount but much smaller!)
I will have a contract in mail any day now!
Thank you soooooooo very much for all your advice!
They did come done form 35% to 25% when I called back toward end of the month. I was getting very close to 180 day mark so decided to settle at 25% and just get it over with!
Thank you all...specially you SUNNYMAY! Your advise was extremely important.
Bof will be updating the account as paid in full once they get the last payment. That should help out the negative shadow on the credit report a bit :)
thanks a million again!

Congratulations for you!! :D