Draw down on credit line

Well thats basically dishonest and fraudulent. Plus the creditors are not stupid and will see what you have done when they run check your credit report. Besides a creditor will not typically even consider settling unless the account is delinquent for at least 90 or more days . Once Bank of America sees that you are that delinquent with these other creditors they will close or reduce your credit line with them anyways because they will see you as a high risk .

I hear you, but I am really trying to find a way to come up with the cash to settle all of these accounts very quickly. If I draw down on the line today, I would immediately have $20,000 available to settle the 4 credit card accounts. Then, after making the BofA payments on time for a few months, I could allow that account to go into default and use my remaining savings to settle that account. Does that make sense?

Then save the cash....dont go into a settlement plan with fraudulent plans. You dont think BofA wont see right thru this?? Your credit report will tell the story.

If you do that Bank of America will sue you for fraud.

I appreciate all of your help and feedback. I'm wondering how drawing down on the line, making payments for a few months, and then defaulting is any different than doing a balance transfer and then defaulting. How is it any more fraudulent?

Because you borrowed money from them with no real intentions of repaying the full amount of the debt back.

Simple they can see you used the money you took from your line of credit and used it to settle your other cards. You think they will be happy you took thier money and gave it to the other CC companies? Then if you just stop paying on the account I dont think they will even try to settle with you. My guess is they would sue you for re-payment or tell you they are so you will start paying on your account.

From what I have learned, CC companies have no way of knowing how much money you have in your bank account. How could BofA figure out that I used the cash for settlements with other companies? And again, how is this any different than doing a balance transfer, paying the card for a few months, and then defaulting. I am truly drowning right now, and I am trying to figure out any way possible to reduce my debt burden. Any suggestions would be greatly appreciated.

I truly sympathize with you, but robbing Peter to pay Paul is never the best solution. You stated you had $15K. Use it to pay your debts. If it's not enough, get on a budget and come up with creative ideas to bring in some more money (garage sales, e-bay, pick up a weekend job, etc). It's truly the best way to get out of financial debt. It's a slow process, but it's also a learning process. The hard work it took you to get out of debt will teach you never to get back into debt. And I am speaking from experience...this is a leasson that I learn each and every day for the past several years as I make a slow crawl out of the hole.

If you have an uptapped card, leave it. You need some positive accounts on your credit files.

Best of luck!

BofA can tell where the money is going from the balance transfers...the check or online transfer will have a name attached to it...a peek at your credit report will show the rest of the details.

"I have $40,000 in credit card debt with Chase, AMEX, Advanta, and Discover. I have $15,000 in savings and checking."Well if you have 15k in cash right now thats about 35-40% of the CC owed. I would just use that to settle with them, just try to talk them all down to around that number. Otherwise your are going to have 20k more you will have to deal with later down the line. Sure spending 15k out sucks right now but with no bills you should be able to start saving again, correct?

I don't feel that it is financially prudent to use every last bit of my savings. It is important to maintain some form of "rainy day fund."

To StoneBroke - I simply cannot afford the minimum payments any longer and after consulting with settlement company today, they feel that settlement is the best option.

They stated that if I were to pay 6 months of payments to BofA, I could then enroll that debt in the settlement program. Does that sound right?

I can understand having an emergency fund. I have $1,000 set aside as an emergency fund for anything that may come up that I haven't planed for- car repairs, house repairs, etc. Some day when I am completely out of debt I hope to grow that emergency funds for a bigger emeregency, such as unemployment.

If you break down the debts that you are speaking of and list each with the total amount due, the minium due, and the interest rates perhaps we can help you spead your funds to help you catch up.

I can't speak of debt settlement programs, since I am not using one and am handling each debt on my own one at a time. Getting started is the hard part, because everyone wants payment NOW. But once you do get started and the collectors ease up on hounding you, it does get easier; both mentally and emotionally. There is light at the end of the tunnel....I can almost see it!

I am bumping this question because I was wondering the same thing. Has anyone attempted this?

wow no wonder our country is in such shambles - no one has a conscience and no one takes responsibility for bad choices. I think your rainy day fund should be used to pay your debt and then start practicing SELF CONTROL.