New and starting DIY Debt Settlement

If I were you I would consider a debt management Plan first. Since you were able to make the minimums and a little more before they hiked your aprs you will be able to afford the payments for a dmp . It will get you one payment but at much lower aprs. Plus it doesn't effect your credit nearly as much as settlement.

Well, I am with a debt settlement program currently and love it!!! Plus I've only got 1 more creditor to go. It would depend on what your goals are, for my family it was to get our of this debt and be done with them. I do not have the patience in dealing with the creditors myself so I am going through a debt settlement program with Superior Debt, my angel Teresa has helped me with getting this taken care of.

a debt management program may be the way to go if you major concern is with the interest rates. For my family interest rates were not our focus as was total amount of our credit card debt.

If you'd like to hear more you can reach me at email removed for your protection - Goudah

Post also edited for TOS violations
PLEASE, PLEASE do your research!! I have done so and found some individuals on this site offer misinformation.

I'm no expert in this area, so please take my advice as only my experience. I've done some research and had some interactions with credit card companies, and this is what I've found so far.

I have about $25K of credit card debt and I was able to sell some of my assets and collect about $8K of cash. This pool of cash is key in any debt settlement negotiations. Creditors will usually be willing to take less if they can settle your debts quickly.

I've decided to attempt to settle on my own without any mediating company as a way to pay more money towards the debt itself. According to the research I've done, if you sign up with a debt settlement company, you'll pay anywhere from 9% to 20% of the total debt amount as an up front fee - money that could just as easily go towards paying the debt. Then once you do that and they send out "cease and desist" letters to your creditors, your creditors will flag your account for collection. Creditors also look unfavorably on these types of businesses because of the lengthy payment plans they set up. Some sites recommend doing DIY debt settlement using variations on form letters which you send to the credit card companies. However, sometimes they will look at these letters and put you in the same category as a debt settlement company and flag your account for collection. The last thing you want is a lot of harrassing phone calls.

The best thing I found was to allow the accounts to go delinquent by at least 90 days without communicating with the creditors (and during this time, I collected as much cash as I could for the settlement process). Then at that point, I received letters from some of them saying they were willing to "make payment arrangements" with me or are willing to settle for less than full amount. Based on conversations with some more experienced people, I was told these accounts should be settled before 180 days delinquency (when they are charged off), preferably around the 120 day range. You should do this over the telephone, not by correspondence. The phone is immediate and offers you the ability to facilitate communication, whereas correspondence is slow and not as effective.

Generally, I've heard credit card companies do not like it when you yourself suggest settlement. But if they are the ones to suggest it, be ready to see them offer 75% or 50% of balance as an initial offer. These initial offers may seem good, but are usually a first attempt to get back as much as they can of the principle. When you're on the phone and they offer you a high settlement, I would say "That's still too much for me to pay, sorry" and if they will not budge, politely end the call.

The key is being polite and honest about the circumstances that created the situation of delinquency in the first place. They also know that times are tough. Tell them that you're trying to do the right thing by settling your debts without going through Bankruptcy. The fact that you're on the phone with them gives you more credibility.

I've had one offer of 35% of balance for settlement, which I think is very good, which I will be accepting shortly. However, one caveat is that credit card companies (CCCs) will report the settlement to the credit agencies (settled for less than full balance), and also any settlement amount which is lower than $600 of the full balance will be reported to the IRS as income by the CCCs via a 1099-C form. So if your full balance was $10K and you settled for $4K, then it will add $6K to you gross income for the year (unless you can prove insolvency). So you will be paying more in taxes, but if your CC balances are written off, then you'll have the money to do that.

I'm still in process here, so I can't tell you much else conclusively. I'm hoping to sort this all out by the end of the month, take the hit in the short term to my credit status, but then rebuild my score by the end of the year. Then it's debt free (aside from my mortgage) from there on in.

I hope this helps. I do encourage you to research as much as you can before proceeding.

I see that you have three accounts with Bank of America. Do you happen to bank (Checking/Savings/money market) with them as well?

If so, you'll need to move to a new bank before trying to settle. Otherwise B of A will take the necessary money out of the account.

Sweetlil71,

Take it from me when your accounts are about 150 days delinquent if you can come up with the money you will be able to save anywhere between 60 to 70% with BoFa and Chase, do it yourself and save money, tryst me!

I meant trust me.