What's the best option here.....
Date: Thu, 09/29/2011 - 09:48
Have about $26K in credit card debt - about $16K wrapped up in 3 cards, $10K in another 7-8 cards. All are about 30-45 past due.All except 1 of the cards have been established for 2+ years.
Have decided to cash in retirement account in hopes to settle these accounts at about 50-60% - have about $14K coming in from retirement account.
Not proud of any of this but it is the situation we are in - what's the best option here?
Am I crazy to hope I can settle all or most of these accounts at 50%? Should I use the retirement to get out of the big cards in full and then get caught up on the smaller ones and repay as normal?
$14K should be more than enough to settle these accounts. Who
$14K should be more than enough to settle these accounts.
Who are your creditors? Some are known to settle at even 20-25%. Generally, you won't get a good settlement offer until you're over 90 days past due, and some wait until 180 days or even longer, but that's OK.
You can sock away additional money (or pay extra on your mortgage) and let that $14K collect interest in the mean time. Your credit will take a hit but, you'll recover from that eventually.
1st National for about $6K Citi Cards has about $12K Chase has $
1st National for about $6K
Citi Cards has about $12K
Chase has $3K
Cap One $1500, Dell for $600 - rest are right in this area.
Should I talk to them right now when they call or should I wait until it gets a little farther along?
You should always talk to them when they call. That way they wo
You should always talk to them when they call. That way they won't call 800 times per day :)
Just tell them now that you can't afford to make a payment and you don't know when you will be able to. At about 90 days start offering to settle at around 20% and see if they bite. They likely won't at that early stage but, just tell them that you can borrow money to "settle" but that's all you can afford. Stick to your guns until you get your settlement to an amount you can afford and are happy with and then get the settlement offer in writing, get it paid and be done with it.
I'm going to take a look and see if I can find more info on average settlement percentages for some of your creditors for you.
Good luck.
You have some of the same cards I did -- I did the same thing yo
You have some of the same cards I did --
I did the same thing you did -- paid with retirement $$ not the smartest choice, but I didn't want to go bankruptcy --
I just wish I would have known about this forum earlier -- I borrowed money from my 401K plan to pay the minimums on the cards -- should have settled much earlier than I did --
first national bk omaha (mine) -- 5300k settled for 1300
citibank 6600 settled for 2013 -- in 3 payments
capital one -- they are tough -- would not settle with me -- but only1800 so brought current
chase -- working on right now -- last offer was 35 percent but I have 3 cards with them total 30K --
definetly talk to them -- once you do, at least once a week -- the calls will die down --
good luck ---
Settlement Options
Just remember that if you talk with your creditors, don't let them know about the 401K. If you tell them about this, they will try to get you to make your payments. Keep this to yourself, and simply tell them that you can't afford your payments, and you'll let them know what it is you decide to do at a later date (i.e. bankruptcy, consumer credit counseling, etc.).
Thanks for the advice - greatly appreciate it, will probably be
Thanks for the advice - greatly appreciate it, will probably be back here often over the next few months.
Talked to the first creditor yesterday - Discover, balance of $3,000 - weren't too friendly, just kept pushing to setup a payment but I kept firm.
One question, a few of the cards I have purchases on and on discover a small cash advance after the last payments received - should I end all these on payments received before stopping payment? The cash advances were all small and just floats to pay off other cards - very dumb, I know - but thought I could buy myself some time.
Sears card we had for about a year, only made a few payments on that one with a $1000 balance - wondering if should continue paying on this?
I'm almost thinking that on all the ones under $1,000 just paying them in full right now........ I'm guessing they wont' really flex in terms of settlement anyhow....... thoughts/advice?
I do have a little bit of advice for you. I went with a settleme
I do have a little bit of advice for you. I went with a settlement company, I didn't want to have the hastle of trying to settle on my own. BUT if I had to do it on my own this is what I would have done. I would have taken the one with the largest monthly payment and stopped paying on it but kept paying the minimums on the rest. I would have gotten a savings or checking account with interest and put that monthly payment into the account along with any extra money I could find and as soon as I had the magic 25% of the balance tried to negotiate a settlement. If they wouldn't bite then I would just say that's all I have and I have nothing more take it or leave it. I wouldn't be rude when I talked to them just honest. If by chance they took that then I would move on to the next one and so forth. I think that by doing this and I may be wrong but I don't think that my credit score would take a hit like it did when I quit paying on all of the cards at once.
Good Luck