debt settlement/ notice of right to cure default

???Notice of default mean???? this means that you have defaulted on the home loan and that the creditor is sending you the letter on this default. Rather than avoiding the calls, talk to the creditor and settle the debt amount.

Marvel Becks, thanks for your reply. But this is for a credit card debt from a credit union and not for a house loan. I do not own a home, I have credit card debts with several banks.

Do credit card companies also issue "Notice of right to cure default", what does it mean and usually when do they issue it, is it right before chargeoff ? I missed two payments on this card.

Appreciate any replies/suggestions.

Thanks
MMuser

They probably want to lower your payments and interest or say something like pay 500 and we will lower your interest.

I had it happen to me with BOA.

But with me, I told I Don't have much money. So they set me up with a 3 year payment plan, with 9% interest and lowered my payment to half.

Thanks Torri Sae for your reply.

Appreciate any other replies/suggestions. How often does one receive this "notice of right to cure" for credit card debt? Is it usually after 45 days?

Thanks
MMuser

Default is default, regardless of the type of debt. You signed a contract with them saying you would make payments on time. Since you've not done that, you've "defaulted." It's just a collection letter. You can request settlement at any time. Depending on the company, the ideal time can be anywhere between 90 days or 180 delinquent.

Credit Unions also have the "right to offset". They can offset your credit card account with funds from your deposit or checking/savings accounts.

Thanks OhioGal for the reply, appreciate your comments.

Thanks SoapLady for the right to offset rule of credit unions. I do not have any funds in savings/checking accts at Credit Unions.

One basic question the number of days delinquent is counted from the last credit card payment due date? Like for example, if the last credit card payment due date was like Aug10th and if today is Oct 10th, so it is 60 days delinquent?

Also, before the 90/180 days approaches, so it is a good idea to not bring up the debt settlement topic with the creditor? And wait patiently till 90 days have passed?

Thanks
MMuser

I suggest you pick up the phone when they call and politely tell them something like "I'm sorry. I just don't have the money to make a payment right now." That's all they need to know. And telling them you're unemployed and don't know when you'll be able to make a payment is legit.

What percentage are you looking for on the credit union card? Do you have the funds to settle? I mean, if you're unemployed, how do you intend to pay these settlements? Do you have some money stashed away? :)

Once you go over that 90 day mark, you may want to broach the subject of settling the card. Tell them something like "I may be able to borrow the money from a family member for settlement. But I can only borrow $_____."

Be clear that you only can get the money if you settle the account, otherwise they'll just try to get you to bring it current. And be clear that the amount you can "borrow" is only whatever you're willing to pay for settlement.

Oh and different companies calculate things in different ways but yes, generally, the date of your first missed payment is "day 1 delinquent."

Thanks very much OhioGal,appreciate your guidance and comments.

On credit union, I am trying to see if I could get 20% or better. Have credit card with them for many years now.

No, I do not have any funds. I was trying to see if I could request a loan from friends for the settlement money. So,settling at as much low as possible is extremely important for me.

Also, is there any credit score the credit card companies target before they settle? Like do they wait for 550 credit score? something like its hard to expect a a good settlement% when credit score is still 600+? I am monitoring my score and it fell from 700+ to about 650

Also is this a reasonable question to ask a credit union "when do they chargeoff my account"? Do you know when is the usual chargeoff date for credit unions, is it like 150 to 180 days ?

MMuser

Charge off dates vary widely between lenders. There's no telling what their timeline will be. You can ask if you like and perhaps tell them you're really like to reach a settlement agreement before charge-off. Some lenders never assign or sell off their bad debts. They hang on to them and work the accounts internally. So there's that too.

I've never heard of a company waiting until your credit score reaches a certain level prior to negotiating a settlement. They do check your report sometimes to see if you're not paying other lenders or just not paying them.

When you make your offer, be sure that you will absolutely have the funds to pay it. It's never good when you negotiate a settlement and then cannot pay it as agreed. It's sort of a double whammy.

Be sure to tell them I can only borrow $xx - and then stick to it. If you want 20%, tell them that's the max you might be able to do.

Just keep in mind that they aren't obligated to settle with you and, they also have rights. They can still sue you. Although, knowing you're unemployed and not having any assets might help convince them to settle.

Good luck!

Collection agencies dont see fico scores....they usually get one brand of credit report, whatever the CA subscribes to. My agency used experian only....so if I was deciding on a settlement, it was based on the snapshot of the report I saw that one day and any other mitigating factors that the debtor provided me with.

Thanks Soaplady for the information.

Thanks OhioGal for the guidance, appreciate it very much. Also regarding settlement, how should one prioritize the credit cards? Should one try to wait for the 90 days and then try to settle the toughest ones like Capital One and Discover before doing the less tougher ones like Bank of America for example?

I am still trying to gather information per card wise. Like trying to find,what things I need like when they would send to a collection agency and when they would chargeoff and may be more details(not sure what all I need to gather per credit card company). So, I have to make a plan per card wise? Is there any specific thread for each card like say CapitalOne,where recent capitalone experiences are discussed?

Thanks
MMuser

These are 2 methods that are most popular.

1) Settle or Pay Off Highest Interest Debt First
Mathematically, this way saves you the most money because you're paying off debts in order of highest to lowest interest rate. The faster the highest interest loans are paid down, the more money you have to start paying on the next one.

2) Settle of Pay Off In Order of Lowest to Highest Balance Due
Pay off the smallest debt first and then move on to the next highest debt. You see pay offs happening more quickly and steadily and it feels like you're accomplishing more. This is best if you need constant motivation :)

Thankyou OhioGal, appreciate your guidance.

MMuser