Will Any Settle If I'm Current?

Typically they won't settle for less when you're current but you might be able to qualify for a hardship program.

So on the one hand it is stupid to miss payments, but if you do you may be able to pay off a $10,000 debt for $5,000. If you do the "right" way you pay the whole amount. These companies need to offer people who try to pay the right way a break. It seems like paying is more of a penalty than not and getting them to take half.

Settlements are the last step before bankruptcy (from the bank's point of view.) And they are looking at your credit report, credit score, payment history - everything and anything they can find - to determine if you are truly experiencing a financial crisis and can benefit from settlement.

They offer settlements only if they believe there is no other option (except bankruptcy, in which they get little or nothing) that will work for you.

And settlements usually happen after people lose their jobs or have reduced income (ie, a genuine hardship).

You can miss payments and try for a settlement after a few months. Of course, your credit will be trashed. And if you cannot prove an actual hardship, there is no guarantee that you will receive a settlement. They may simply decide to sue you, especially if you have assets and they determine that you can pay the full amount.

You seem upset that there are people suffering financial hardships who have received debt settlements. These people are NOT deliberately not paying their bills so they can settle. They are UNABLE to pay their bills. They are on the edge of financial ruin and so the banks negotiate settlements because bankruptcy is the logical next step.

To get a settlement, you have to prove financial hardship. Some banks require bank statements and paycheck stubs to back up your story. People are not simply calling up and saying, Hey, give me a settlement because I have too much debt!

If you need help with interest rate reduction, call the banks. Tell them you're struggling with the rates. Chances are that rates will be reduced for you. Creditors will typically not raise rates if other cards are paid off. That will help your score and should allow you to negotiate lower rates with them.

Be thankful that you're receiving some financial help and use it to make a good start in abolishing your debt. But if you don't actually need a settlement (and can't prove your need), then you won't get one.

One final note - beware of debt settlement companies and debt counselors. Most such companies are fraudulent and take your money for a future 'settlement' that never occurs. And in the meantime, your credit is ruined and the collection calls start.

Good luck.

Sounds like you work for a CC company or a CA.

Hi guest. Who are you saying sounds like Sounds like they work for a CC company or a CA? I am getting people on another board saying stuff that also sounds like it is straight from a credit card employee. They don't advise anything other than paying everything or all kinds of bad things will happen - but if I start paying some CC's off the benevolent CC companies won't riase rates or payments on me. I too think CC company employees infest these boards. One board has a guy with a post count in the thousands who usually tries the obvious CC company line. Not saying anyone on this thread is, but sometimes I wonder.

trust me.those people are sniffed out pretty quick here.it is true that the CC companies have policies that stink on ice,but they are legal,and they won't talk settlement if you are current.also the one guest is kind of off.if you have 5,000.00 in CC debt to one card,and it balloons to 10,000.00.you settle for 5,000.00.you paid the original balance technically.plus they can make you liable for the 5,000.00 in regards to taxes with the 1099c.settlement should be a last resort before BK.

I don't think 'most' Debt settlement companies are scams, although it seems a lot are. I believe in using an attorney experienced in Consumer debt matters, and one who will accept a fee as the payment plan proceeds, certainly not all up front - I regard that as crazy. I also think settlement has a much better chance of working out if you get it done with quickly just so the fees and default interest rates don't balloon the amount owing too much although that is all part of negotiation. Also if you are insolvent at the time of any forgiveness of debt you are not required to pay tax on the forgiveness.

good point about the insolvency,but i still think that you should go settlement as a last ditch before BK.good credit is hard to come by.

"Good credit is hard to come by"...settlement still dings your credit rating, initially just as hard as a BK...but after awhile it's effects are less damaging than a BK.

Hello. I wrote the post explaining settlements and financial hardship, etc

I do NOT work for a credit card company. It seems to me that a lot of people at this forum feel that anyone who disagrees with them is a credit card company or collection agency employee.

In other words, if I type anything other than - Here's how to get out of debt without paying back all that you owe! - well, I must work for a credit card company.

The fact is that the original poster ran up those debts. He is legally obligated to pay them back. He knows that, and he knew that when he ran up the debts. Now if he lost his job or had reduced income and could no longer make his payments, I would encourage him to try settlement.

But - if he can make the payments, why should the banks settle with him? I think we all know that banks exist to make a profit - and not to cut deals with consumers.

I don't want to get into a big debate about high interest rates and late fees and all of that. I agree that those suck. And I think most banks make it far too easy to fall into debt.

But I also think a lot of people misunderstand the concept of settlement, that's all. Settlement is a big deal. It's there for people who are out of options.

It would be great if all of us could 'settle' our debts for less than what we owe. But realistically, that's not going to happen.

paulmergel, I was referring to the debt settlement companies that advertise on the internet and tv. I think you are correct that using an experienced attorney could be helpful.

For the original poster, my advice was meant to helpful but perhaps was not what you wanted to hear. But these forums would be pretty useless if they were just an endless rehash of 'credit card companies suck'. Realistically, I don't think you have a good chance at negotiating settlements. I base that upon my own experience attempting to negotiate with various banks (B of A, Amex, Chase). They wanted everything but a blood sample in order to prove my 'hardship'. And Chase told me they are starting to very carefully review every potential settlement because they think the option is too open for abuse. So you can certainly try - and again, good luck.

who said that besides a guest.i feel as stated before settlement is a last ditch before BK.it does serve a purpose,but should be researched before selecting a company.BTW,when i said they are sniffed out i meant others not you.