considering debt settlement
Date: Mon, 06/08/2009 - 09:27
So here is my debt
B of A (2-cards) 17k, 7k (7k is a *new* balance transfer from another card)
Chase (2-cards) 3k, 0-balance (transferred to bofa)
Discover (1-card) 10k
Citibank (1-card) 8k
I played the balance transfer game along with my HELOC, but I got stuck when I did a BT to my bofa (17K) and then my HELOC was frozen. Medical collections hurt my report, and now as I pay down balances, the banks are reducing my credit line so I cannot do any more balance transfers. This compounded with my missing a payment by a few days with chase (running it up to 13%), and the 17k bofa balance transfer promo going away (25% after that). I am at the point of considering debt settlement.
I've cut back on all my bills, no phone/tv, no going out to eat, packing lunch to work, etc... We are in control of our finances excluding these stinkin credit cards.
I've got 10k stashed away from last years tax return, and if I stop making payments to CC companies I can scrounge up 800-1000 p/mo. But I am concerned that since all of these debts are balance transfers that they will not negotiate. I'm also really concerned about the 7k from bofa that is new. But I don't want to make payments on that one while trying to settle with the others, as I've heard the others will get wind of it and assume I can pay theirs too.
I just want to be debt free at this point. I've made my mistakes, and want to move forward.
So anyone had success with debt settlement, even with debt that was transferred and paid low interest.... The way I always thought it worked was the CC company racked up the interest, and then settled by dropping the interest (and still walking away with their capital), but that isn't my case, since it has all been balanced transferred....
Any advice would be appreciated.
Thanks!
Hello JB67, You should indeed be concerned about the recent b
Hello JB67,
You should indeed be concerned about the recent balance transfers. Historically it does effect settlement amounts. That being said, I have recently worked some files direct with BofA where I was surprised to have gotten the standard from them, even with cash advance & balance transfer issues related to the accounts.
You have 10k set aside, and the potential to add 5k more over the next 5 months. If done correctly, you could knock out all but one debt inside of 6 months. The creditor & debt profile you outlined in your post is very doable in a 9-12 month period. You should try to get most, if not all, done with the original creditor. I cannot give you specifics on what I know to be the ???correct??? way, but this board is full of good stuff if you cruise enough of it, and read between the lines. I will caution you from using any approach that suggests you send written communication to your creditors inside of 5 months.
Mileage may vary
Thanks for the reply! I was planning on knocking out most withi
Thanks for the reply! I was planning on knocking out most within 6 months (perhaps borrowing money from family to accomplish it before they go to collections), and I had worked up a spreadsheet with default interest rates, and calculated if I settled them all at 40% (after interest and penalties) after 18 months with my savings and next years tax return that it would be done and over with.
Any idea how long a BT takes to be on record before it is considered just plain old chargeable debt? All my BT are now over or at 1 year old, excluding the 1 7k to bofa that was done just a month ago (with intent on BT'ing it back to chase, before they dropped the credit limit from 8k to 1k).
Thanks!
Justin
Each creditor is different in how they flag an account for usage
Each creditor is different in how they flag an account for usage. 1 year is a good thing.
Further to the BofA:
I have worked files where one BofA was approaching 6 month and another only 60 days. They would only do the deal if both were rolled into the same arrangement. Savings were identical on both even though that went against the offer trends (this is a good thing).
By the way, I was quite serious about the 9 month thing. I would have said all of them inside 6 months, but your discover is a fly in that ointment. Things with them can change in the next 5 months though. They were just downgraded by moody's. I see Discover being one of the casualties in the current economic/banking malaise.
Mileage may vary.
thanks for the advice! One last question. I've disconnected my
thanks for the advice! One last question. I've disconnected my home phone to reduce monthly bills, they do not have an accurate home phone # on file. Do I call them and update my phone number, or just let them figure it out. The only number they might have is my work #.
If it were me, in this circumstance, and given the fact that you
If it were me, in this circumstance, and given the fact that you will be attempting to get most, if not all, of this done with the original creditors, I would update them with a new #.
The calls will be a nuisance, but they will also be your path to getting these deals done. Dont expect decent turkey talk until 5 months, though it could happen earlier with 2 of the creditors that you listed.
Mileage may vary