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Done! Chase, BofA, Discover and Citi all settled before charge off

Date: Fri, 01/28/2011 - 12:10

Submitted by debtinthedistance
on Fri, 01/28/2011 - 12:10

Posts: 89 Credits: [Donate]

Total Replies: 18


I am happy to say we finally settled our last account right before charge off. Citibank was our last card and we settled right before 180 days for 29%. They were stuck at 35 for a long time but we hung in there and finally upped our offer a little to 29% and it was accepted. Made a lump sum payment Thursdsy after receiving settlement letter by mail and a huge weight has been lifted!

Thanks again for all the helpful posters here and good luck to those starting or in the journey now. You can do it!!!


Just settled a balance of $64,000 on two Bank of America accounts for $17,000. Held out until we were days from charge off, called and settled accounts for about 26% of original balance and will payoff in 4 payments....thanks to all for the insight and help. One huge monkey of our backs and a few smaller ones to go...


lrhall41

Submitted by on Sat, 01/29/2011 - 06:34

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Honkytonk my goal for chase was 30% and we started by offering 20%. They seemed more agreeable and started lowering their offers earlier on in the process so we decided to be more aggressive with them. They were easy to talk to but screwed up the deal when we first got it in writing. A pain but it was finally all figured out.

Good luck. At 150 days I was amazed at how confident I felt that we could get close to the offers we wanted.


lrhall41

Submitted by debtinthedistance on Mon, 01/31/2011 - 18:36

( Posts: 89 | Credits: )


Lisa you are right. It feels AMAZING! I can sleep at night and I am getting my family back on track. It was hard to do but the hardest part was deciding to do it and taking that first step. I felt so badly doing it. Felt like I was cheating, stealing and lying but through this I have learned a lot and I know I did what was right for my family. I will never get wrapped up in the credit card game again. Nothing is worth the pain it brings.


lrhall41

Submitted by debtinthedistance on Wed, 02/02/2011 - 11:57

( Posts: 89 | Credits: )


OP, Sorry I missed your post. Congrats from here as well on a job well done. And, InTooDeep, I am NOW debt free and it IS music to the ears. Took me the last 3 months of 2009, all of 2010 and I am just wrapping things up. But I owed a TON.

Just a reminder to all who are settling cards AND a house... be sure to settle the cards first. Since your home is so underwater it will help you show insolvency. If you settle the home first you will likely escape taxes on forgiven home debt due to the mortgage tax forgiveness act. BUT, once that is done, you start to look rather solvent as you settle cards and that can clearly end up in a taxable situation.


lrhall41

Submitted by dantheman on Mon, 02/14/2011 - 20:20

( Posts: 860 | Credits: )


So true Dan. We are not insolvent because our home is not way under water and we have good 401k savings. All of our 1099s for debt forgiveness will be for the 2011 tax year because everything was done in January but when we filed our taxes this year we spoke to our accountant about what it will mean for us next year. We are adjusting our withholdings for this year so we don't get socked with a huge tax bill next year. It may be close to putting us into the next tax bracket which will stink but it's all still better than the hamster wheel we would have been on for the next 40 years trying to pay these cards back. It's hard but we are determined to make it work. We keep reminding ourselves it should be hard we need to learn to never do it again.


lrhall41

Submitted by debtinthedistance on Tue, 02/15/2011 - 17:25

( Posts: 89 | Credits: )


We are not insolvent but I lost my job over a year ago and after using savings to keep paying minimums we just couldn't do it any more. I wish I had started the process sooner so I could have used my savings to pay the settlements as it was I needed to take a loan from my 401K but at least I only owe the $$ to myself now (and the piece the IRS will take next year)

The credit card companies will look at your credit reports and when they pulled ours they must have noticed that we had been very longterm customers of many cards and that we stopped paying ALL of them so they knew something had happened. We were honest and told them that after paying for our house, car, groceries and utilities there just wasn't money left to pay them. They could see that the only other "credit" items on our report are our mortgage and car payments which we continued to pay as agreed. All the cards went late at the same time.


lrhall41

Submitted by debtinthedistance on Wed, 02/16/2011 - 10:08

( Posts: 89 | Credits: )


They each sent us a settlement agreement letter after we agreed to terms by phone but I did not need to sign anything. The letters stated the money amount and when payment was due and that they were required to report the settlement to the IRS. We set up a new bank account just for settlements, allowed them access to that account once we had an agreement in hand and only put in the amount they were supposed to be taking. We had no problems with all 4 companies (5 total settlements).

Hope that helps.


lrhall41

Submitted by debtinthedistance on Tue, 04/12/2011 - 18:47

( Posts: 89 | Credits: )