Debt Settlement Timeline...?
Date: Wed, 12/03/2008 - 15:32
Have a business that just launched as things were going south economy wise. Have 18 CC - about $80,000 (gulp) and was managing them, not using all credit available, and paying on time but income took a nose dive. Half the cards are in business name but all personally guaranteed by me so my credit takes the ding. Business is still limping along and actually gaining some momentum so don't want to jepordize this by not paying CC that are in biz name.
So- I am current on 9 CC and but had to stop paying on other 9 and am getting close to 90 days late on a couple. I have looked into debt management but they don't seem to be able to change much so feel I will have to try to settle things myself or maybe go with a company. - I get daily calls from Amexp and many other #s but there are few messages and the ones I do get don't say who they are - just to call. I leave my ringer off so they aren't a bother. My questions:
- I've received a few letters now saying - we can work with you. lower interest, etc. Should I call about these? I am not far enough behind to be offered a settlement, I don't believe.
- If I do call and get on a program can I ask that they not report anything negative if I do agree and stick to the program?
-At what point do most offer a settlement. I know it varies, but when would be the earliest.
- If I get a letter from a collection agency and send a DV letter and it's validated, what next?
I have more question but am just trying to get a handle on how this will all paly out.
Thanks much for any advice!
Re: Debt Settlement Timeline...
That's a pretty tough situation to resolve. Are the credit cards you are current on the one's tied to the business? Because you can get rid of the other ones that aren't for your business through the debt settlement process.
I also agree when you say debt management won't work for you...been there, done that, still filed bankruptcy because it was too expensive and lengthy. Just couldn't keep up!
With debt settlement, at least you have some sort of control, just depends on whether or not you go with a company or not. If you go with a company, they will buy you time by holding off your creditors. They field most of the calls, conduct negotiations, etc. You will still save a ton of money through a company, so the price is worth it. Also, they have direct contacts with the "Debt Settlement Division" of most of the creditors out there. So, the length of time it will take you to get out of debt is shortened significantly through a debt settlement company.
If you try to settle the debt on your own, it is very possible to do. The the timeline is going to be greater. When you call, you contact a collector or a representative who isn't equipped to negotiate. So, your request gets passed on to someone who knows that a consumer is unlikely to know how debt settlement companies work. So, you will receive A) a higher settlement from that creditor than the standard amount or B) a representative who things your request is a laughing matter and won't take you seriously (I've had the latter...not cool!)
Anyhow, see what your creditors will do to help you. But, it will not benefit you to do balance transfers or get new credit cards with 0% interest - all you're doing is shifting the debt from one place to another and prolonging the process. That process is not benefit you.
As far as a program with a company, if you don't want the third party reported on your credit report, DON'T ENROLL WITH A COMPANY THAT WILL SET UP A TRUST ACCOUNT! Your lenders will see this and it looks along the same lines as negativly as a Chapter 13 bankruptcy. I found this out after I did debt management and warn everyone I know about it!
As far as what point a creditor offer a settlement - a creditor can offer a settlement at any time. The problem is if you are ready to accept it. Your creditors are unlikely to agree with any settlement unless you have the funds to back the settlement up - that applies whether you are with a company or not. But, being with a company allows you time to save without the creditor throwing a hissy fit!
If he debt is validated, that means you still owe it. It will not be removed from your credit report and the creditor still has the right to actively pursue repayment of that debt. That is another instance where you could make payment arrangements or see if they can settle.
Hopefully this rambling makes sense. My cousin is a manager for a financial services company that does debt settlement. I've learned a lot from her. But, I've been in your situation and the life lessons were learned the hard way!
Best of luck and hope your business starts to pick up!
