Debt Settlement

So I'm on hold to try and negotiate with them but I'm not late. Should I hang up? Am I in danger of making a mistake here?

Can anyone help me? Am I posting incorrectly? It seems every other thread has had responses accept for this one.

Hello, and welcome to the forum. You mentioned you are not yet late. Creditors won't negotiate if you are current, generally speaking, because they feel if you are paying your bills you shouldn't need any help. If you feel you can continue to pay your bills, even though it may be hard for awhile, it's probably the best thing to do. Settlements can really hurt your credit score for a few years; however, if you don't foresee having to get new credit for anything, or refinance anything, you probably have nothing to lose at this point if you are overburdened with debt. Even if current, your credit score can plummet if you are close to or at your limits. Keep in mind though, if you tell creditors you are in a hardship or want to settle, they will most likely close your accounts. It is possible at that point that OTHER creditors, even with accounts you are not having trouble with, can close your accounts or lower your limits. So debt settlements really are a last resort before bankruptcy. You may want to explore other options like debt management or consolidation.

Well you were right while I was on the phone with them they explained that I did not qualify for a settlement. When I pressed for what I need to qualify they refused to explain. My problem is that it will take me 4 years to pay this off at the rate that I'm going and don't feel it's worth it. We want to start a family but can't afford it because of the credit card debt payments. I just don't know enough about this process and am a little scared that I may be making a big mistake.

At first I was pretty gun-ho about the whole idea but then I read a thread here were someone warned that Zwhiker would sue them. I don't want to get sued! What advice do you guys have? I can use the help, thanks.

Before anyone can say your going to get sued, they would need to know what state you are from. Texas, North and South Carolina and Pennsylvania are states you cannot be Garnished. In addition, Florida can't garnish your first income. When a creditor does a lawsuit, they want to make sure they are able to obtain money and the surest way to do that is garishment.

Pending on what Citi you are talking about Citi Financial is agressive in their collection practices.

As Susie Q mentioned, most companies won't settle unless you are showing hardship and hardship to them is you going delinquient on your accounts unfortnately.

Settlement does hurt your credit because because of the delinquient aspect. If you are not seeking to get a loan in the next year or so, then it is not a bad idea.

You are right, debt settlements are scary. I have been in a program for about a year and a half now, and 7 of my nine accounts have been settled (I started out with 90,000 in debt due to a business that closed). HOWEVER, I have been sued three times as well, and lucky enough to work out "deals" before the court dates so the cases were dismissed. It is nerve-wracking, because I never know what's coming next. But I didn't want to do bankruptcy, and didn't really find another plan that fit my needs with that kind of debt load. So I did a lot of research, asked a lot of questions, and by the time I made the decision I was very familiar with the process and what to expect, the bad along with the good. You just need to look at ALL your options, and choose one that fits what you can afford and your timeline for getting out of debt. That's why I thought a management or consolidation program might work better for you with the amount of debt you have.

I currently reside in Florida, so as far as the states systems are concerned could they sue me? I really appreciate all the feedback, I'm flying blind here for the most part and am pretty intimidated.

What happens if I stop paying? Won't the balance compound and then I'd have to settle on an even larger amount?

My other option would be to take the 6,000.00 that I have saved up and pay off the other card and then try to aggressively pay off the 12,000.00 debt. The problem is that even then it would take me 24 months to pay it off completely. Do you think it's worth walking away if I don't care about my credit score? I'm really mixed up with this situation, I generally know what to do and when to do it but I honestly feel clueless right now.

Hi and welcome. I am in Florida too! :wink:

Usually I am a huge cheerleader for debt settlement. However, only going by what you have posted, it is kind of hard to know for sure if that is the only route you should go. I see you owe roughly over 20k in cc debt. I think what I am getting is that business is slow and you are having a hard time paying but you are not delinquent yet? That's good because it buys you some time to explore all options available to you.

Debt settlement is great but for some people it is really not the best option. I want to emphasize again that I am all for debt settlement but only if it is the best option for the person.

If you are not delinquent on any payments, I am assuming you have good credit. I don't know the interest you are paying on these cards but I am guessing the Best Buy card is pretty high. Have you tried maybe to transfer these balances to a zero interest or a lower interest card to make the payments go down and give you some breathing room?

Have you tried getting on a hardship program with any of your creditors?

I would tell you to explore credit counseling or consolidation but for me, those options weren't really viable options for someone with over $150k in debt (yes me). I am sure someone else can chime in on those options for you here.

What I do know is that everyone's situations are different and nobody has the same results with debt settlement. For instance, I went for a long time without paying creditors and never got sued. I read a post by someone who had the same creditor who got sued right away. My husband and I both owed a few of the same creditors and while one of us got settlement offers, the other only got threatening letters.

As you see, there really isn't any textbook way of doing debt settlement. If you truly want to do it and don't care about the credit ramifications-stop paying your cards and in a couple of months try to settle. They may try to sue-they may not.

Debt stinks and can cause a huge burden on you and your family. Whatever you decide, take action soon.

I wish you all the best. Please post any questions you have. Best thing you can do is register and make a user name. You don't have to give all your personal info to do so. That way it is easier to ask questions and get answers.

Again-good luck with it all.

I would call them up now and get on their hardship program. Even if you are current(which I am) and explaining that I would be delinquent if they did not change my terms(reduced rate and minimum payment), they offered me 0% APR on the spot. They would much rather keep collecting something than filing BK. This also why the Top CC companies have supported CCCS "Call to Action" to offer hardship programs right now. You can do this on your own though without going through a DMP.

And, yes the balance would compound if you ignore it. Another reason to call your CC and try and work out something. 20k is not alot if you can get a low or 0% APR to pay it off.

Best of luck!

Sorry that I have not registered but I got scared because I saw in one post that the collector was actually on this site monitoring what she was posting. That's put me on the defensive a bit and I apologize for that.

My situation is pretty close to what girlindebt posted. I'm weighing my options because we want to start a family and I REALLY want to get rid of this debt before we take on that endeavor(a completely different subject all together). So here are the options I have considered:

1. Walk away and never pay it back, let the chips fall where they may.
2. File for bankruptcy and never pay it back.
3. Don't pay for a few months and then try for a settlement.
4. Call and try to get them to do a loan modification.
5. Use the 6k to pay off one card and then aggressively try to pay off the 12k.

All these options have their good and their bad. I'm not concerned with my credit score whatsoever. Maybe I'm wrong for thinking that way but I just don't. The thing that is preventing me from doing number 1 is that I'm scared they're going to come after me. I don't want to be sued because then this entire thing may be a waste of time if they can get money from me. I'm also scared to stop paying and try for the settlement because what if they don't want to negotiate and instead try to come after me? At which point I'll have a higher balance and I may not be able to afford anything.

I'm starting to lean towards paying it down but I really hate that fact. Which is a crappy mentality to have but I'm dead set on delaying the family until it's all gone.

Jensy, when I tried to call last night they told me I didn't qualify for a hardship program because of my DTI. I can tweak some of those numbers to try and get something like that going but MBNA seemed pretty strict on that.

Golly, I know that when you're in debt, even a couple hundred dollars can seem like a million. But, I'd have given ANYthing to have only been 18,000 in debt instead of the 90,000 I was saddled with. I'd have done things a LOT differently. I would not have gone the settlement route. I'd have found a way to pay those accounts down while keeping current, perhaps with a management program. If you have savings, I'd hate to see you spend it all on debt, when you might need a cushion for something else. Please look into all other options. Type "debt management" into the search box above and read all the info you can. You may be able to get into a program where your monthly payments are more affordable. By the way, Option One should be a definite NO! You never know when this could come back to haunt you.

Thank you SusieQ, I will begin researching that tomorrow morning. Before I do is debt management a way for me to pay it down while not using the savings?

Yes, it is. A good company will negotiate lower interest rates and lower monthly payments for you so the accounts are paid off, but more comfortably than they are now. I wasn't able to go this route, because with the amount of debt I had, the monthly payments still would've been more than I could handle.