Debt Settlement Company v/s doing it yourself

that was the similiar situation that my hubbie & i were in..we had about $40,000 debt and did not want to pay someone else. after looking into companies, they could not assure us that we would not be sued, so we went ourselves. it was cheaper (b/c no company fees) but it was also a long drawn out process..meaning several about 4 years..we saved every dime we could, got rid of cable, cell phones, long distance services and anything else we did not need. and put that money into a coffee can and started to save bigtime. when we got a chunk of change, we started to call the creditors for settlement. i flat out told them i had x amount of money and those who would settle would get it! i stayed true to my word, and settled as many as i could with what i had. at income tax time, we settled many of our larger accounts while we continued to save for the little ones..after 4.5 years or so, the process was over..all collections are settled or paid! all of our bills are current and on time and its a great feeling!! we had debts that were 6 yrs or so delinquent and was only sued one time, which was settled within the 28 days for response of the summons..You can settle on your own, be specific with creditors..even the big guys will settle..i settled mboa $12,000 for $2,000 in one lump!! They all will settle, but it takes a long time and be prepared for your score to tank for long time..and 7 years is a long time! we are at the 6 year mark-and its longer than i ever thought..but good luck and ask any questions you may have, someone will answer them..

How much were you able to save each month? 4yrs and only one company sued. Did you just get lucky? or is that the norm?

i don't know if thats the norm or not..but overall we saved 27,000..we only paid about 13,000 of the debt back..with that said, all of our accounts now say "settled for less than full amount" or just "settled". but both are not really good for my score..we actually could save about 150-500 month it depended b/c we were self employed at our own bussiness..so it varied but as soon as i got 500-1000 saved i started calling the debt buyer up..in the meantime..here and there..i made a payment of 50 or so to each of the creditors b/c in my state a partial payment restarts the time clock of sol to sue you..we had every intention to either settle or pay all of these accounts and restarting sol meant they left us alone for awhile atleast from court proceedings..oh by the way, my sol for most debt in ohio is 15 or 6 yrs depending on the debt...but i made several payments to the collectors to keep them in the sol so they wouldn't be so quick to sue me...13,000 is a drop in the bucket compared to what could have happened..i just have a hard time paying someone my hard earned cash for something you can do yourself...overall we actually paid roughly a third of it back...pretty decent..i've heard of people paying more like 25-30% back but we were happy to settle at a third..

oh yeah..some of my creditors did settle for less..mbna settled for about 17%..but medical would not even budge at all..my unsecured debt all settled for about 20-25% while medical wanted 100% for paid for delete..so it was worth it to pay more for them to drop off my report..my early settled accounts were settled within the first year of delinquency..the latter of them had been delinquent for about 4-4.5 yrs and settled for nothing...lvnv 1,444 debt settled for 200 bucks!!!! i found i got a better settlement the longer it went..but that scared me..i was only sued for medical debt and not charge cards...smaller cc were generally the first to settle...

so i am about 90,000 deep, but can put away around 3,000 per month. What do you think of my chances of being able to settle at say 40% which I could do in about a year without getting sued. All my debt is cc debt

Guest , we need more info to better answer your question. I need to know the names of your creditors and the balances.

guest, i don't know..i know just what worked for me and by no accounts am an expert in debt settlement..mobile is pretty good..he could help more than i with that question..

mobile,

I have:
Citi 22,000
Discover 9,000
Chase 11,000
Chase 12,000
Chase 3,000
Chase 5,400
Beneficial 9,000
citifinancial retail 7500

Thanks!

I would say your odds are pretty good. Beneficial and Discover can be harder to settle with but overall I would say your odds of successfully settling these debts are great.

Mobile,

Would it be be better to get a little saved up for a few months, like 6000-8000 and then stop payments in order to save like 3000 per month. This would give me a little nest egg in case some offer settlement early.

Thanks again for all of your help!

How is it you can afford to pay the minimums and still put money aside for a settlement program ?

honestly i went through a settlement company and i could barely make those payments sometimes i had to call and arrange something else because i couldnt do it. but i got my stuff settled at the 2 mark and of course my lowest account sued, citibank. If you can do it yourself thats great an you will be able to settle cheaper than through a company, but from my experience and from what i hear once you get past that 2 year mark your chances of getting sued are starting to get pretty good. Keep in mind no company can keep you safe from lawsuits but they can try to quickly get it negotiated before it goes to court. but remember that some companies are just un helpful and will sue you anyhow and will not settle at all if your using a co. or doing it yourself it really doesnt make a difference.

just my opinion, if you are managing to save while making your payments you really should not be considering settlement. many people think settlement is a easy quick fix for to much debt,when in fact its far from easy and its not fun. it should be a last resort to avoid bk.

Well after all the bills are paid I usually have about 500 per month left over, and then I was going to use my tax return money. So If I save for a few months I can have around 6000-8000

Thanks for all of the information. After looking into a few companies very closely we have decided we are going to do this settlement ourselves. I'm not paying a company that much money, plus one contract says 578.00 for 15 months goes towards legal fees, so that means only 178 towards settlement. NO WAY. I can save 578.00 a month to put towards my own settlemnt program. :)

Excellent idea! This site has a lot of help, explanations, and sample templates for letters in the "Do It Yourself" section above. Plus if you have any questions along the way, please do not hesitate to ask and someone here will try their best to assist you!

Just be sure to save as much as possible to speed up the settlement process. Getting it done ASAP will greatly reduce your risk of lawsuit.

getting it done in 7 months quick enough? I am trying to decide if I should just keep paying minimums for another year or so and saving up as much as possible and then start, or just go with what I can save combined with tax money and starting in a few months

7 months is pretty quick, and if you can get it done that fast you have reduced the likely hood of getting sued, but keep in mind that sometimes they dont want to settle very easily. you may have the money to settle for what you want to settle for, but they may not be willing. and in my experience i had 1 that refused to settle at all. it was my smallest account but they refused to budge.

What happens when they won't settle, are you able to work out arrangements for payback at a reduced interest rate, or are you just sol at that point in time?

Its pretty rare that a creditor or 3rd party won't settle at all , but yes a lot of time you still can work out a payment arrangement with either reduced interest or non at all.

Mobile,

Thanks again for the words of wisdom....When I get my final plan worked out, is it okay to run everything by you to see if I am on the right track?

GOSH I am just still in limbo about everything, scared to death to do this. I have settled before on a card and it felt great. But the phone calls, OMG it was horrible, and with several creditors, I will be going nuts.

Sure , feel free to message when if you have any questions :)

my quick story, had $165k of unsecured debts which went up to $180k in 4-5 months when I stop paying minumim, it was flavor of creditors:
amex about $80k (6 CC)
chase $25k (4 CC)
discover $25 (2 CC)
CITI $10k (1 CC)
Beneficial $30k (2 CC)

settled in 4-5 months for total of $54k
easiest to work with was AMEX 20-20%, discover 25%, chase 30-35%
worst one was Beneficial they did not want to talk about settlement and if at all they said can settle for 80%, finally when I was over 120 days past due they offer 50% on both cards and since these were last I had to settle I did not want to risk and took it

so if you can save it is doable, in my case I have decent income but because I was paying anywhere between 3,500-4,000 a month min payments only my debts would not be paid off ever so I decided to stop paying save about $20k + over 4 months period and borrowed rest from 401k ...