Debt settlement before getting behind on payments?
Date: Sat, 04/16/2011 - 13:24
My husband and I have two credit cards, Capital One (interest rate 15.9% - balance around $14,000.00) and Bank of America (interest rate 12.9% - balance around $13,500.00). We have only been making the minimum payments but have not been late yet. We will soon be selling an inherited house with my sister-in-law (splitting the money with her) and may end up with around $15,000.00 after putting cash back for income tax on it and using some of it to fix our driveway, stock up on food, and for other miscellaneous things. I would like to use the money from the house sale to pay off the credit cards but obviously it's not enough as we owe a total of almost $28,000.00.
My question is this: Is it crazy to try to get the credit card companies to settle the debt for the amount we will have to pay them after the house is sold or do I have to stop paying on them and let them them get behind while racking up late fees and probably higher interest rates before they will consider settlement?
Nope, you need to be behind before they will settle. Especially
Nope, you need to be behind before they will settle. Especially Cap One. They will want to see hardship and will put your credit report.....
Thanks. I'm pretty scared to get behind on payments even though
Thanks. I'm pretty scared to get behind on payments even though we're barely keeping our head above water and will drown if I get a major illness that keeps me from working (my husband is already disabled).
Any other suggestions of how to use the house sale money or what to do to get the credit cards paid off fast?
I would stop paying B of A first. They're usually pretty ok to
I would stop paying B of A first. They're usually pretty ok to work with. You can probably settle with them at about 30 - 40% at 90-180 days late. Cap1 is more difficult. Continue making minimum payments to them until you've paid off BofA. I would then stop paying Cap1 and try to negotiate a settlement. Just be adamant that you cannot continue making the minimum payments but may be able to "borrow" some money to settle it. I wouldn't pay more than 50%. Do NOT let them know that you've come into some money. After you pay them off, if you have anything left over, leave it in the bank as a good start for an emergency fund. Then, continue depositing what you were paying as minimum payments to the bloodsuckers. This way you're paying yourself instead and you'll have a decent emergency fund in no time.
The first thing i would suggest is stop using the credit card.
The first thing i would suggest is stop using the credit card.
After selling the house and putting cash back on income tax and fixing the drive way put the balance money on a savings account.
Now start saving money regularly, and pay your credit card debt. Try to do cash purchase on all essentials, do not use your CC.
My wife had issues with her cards too... She just settled one ca
My wife had issues with her cards too... She just settled one card, to avoid getting blacklisted, but the 2 cards were not paid yet. It was already sold to the 3rd party collector and it has been avoided for more than 2 years already. I haven't heard from them now.