Settling a few credit cards at a time and their implications...

I gambled. I had 120k with 5 different issuers. Paid Discover, BOA, Advanta, and Citi...totalling 60k....However...AMEX didn't get paid and I got sued and hired a lawyer to defend me to give me extra time to get the funds available.....still won't have 55% but I will have some money to negotiate with. good luck. I haven't used a cc for almost a year and it feels great....I will never fall for that trap again

I'm in a debt settlement program, because of a crapload of debt from a business that closed, and I put nine different cards in the program that were mostly debt from the business. I kept several cards out. What happened was that my Discover and Juniper (now BofA) Mastercard, two that I kept current, lowered my available credit to the balance I had on them, leaving me with no room for more charges even in an emergency. A couple of department store credit cards that had zero balances closed my accounts altogether. One of my gas cards raised my interest rate to 27%, even though I was current and had never been late with payments on it. Credit card companies are spooked right now, and when they see you are late or have defaulted on some cards, they will panic. The only good thing is that my credit score has not taken the hit it might have, since I have stayed current on payments on several other cards and my mortgage, and hopefully will bounce back a little quicker with all those accounts still in good standing once the settlements are complete.

So, can I settle only a few credit cards at a time? Will it hurt my chances when negotiating a good settlement percentage?

You can try, if you aren't worried about what might happen with your other accounts (i.e., much higher interest rates, having the accounts, closed, etc.) I think good settlements are easier to get, though, if the creditors see you are a serious hardship case and not just picking and choosing who you will pay and who you won't - most of the accounts I left out of the program had zero balances so they can see at least I'm not trying to charge up a bunch more debt. If you have other open accounts, you may be asked just to transfer balances also. I've had that happen. "You have $5000 open on such-and-such card - why, you can do a cash advance and pay us with that!" Keep in mind you are dealing with companies that are not only very greedy, they are in serious financial difficulties themselves. There's really no pattern, no rhyme or reason, to what they will offer.

Bottom line, will the banks settle with me if I'm current with other credit cards? If I do this, I'm going to stay current with 20K given I have good rates with those cards. I just don't have enough money to offer when settling all cards....

Some might, some might not. It just depends on who the particular creditor is, and what their current policies are. You might type each creditor's name into the SEARCH box above, and see what kind of threads come up where people have talked about their experiences with each particular one. Some creditors are hard to settle with anyway. Some others might be more willing. The thing is with settlements, is that it's all a crapshoot. There are no set rules. What they do for one person, they won't do for another. It seems to change on a daily basis. Also be aware, that unless you are insolvent, you will have to pay income tax on any amount of forgiven debt of over $600.00 if you settle. Also a factor to consider.

Thanks to BrokeJoke and SusieQ and anyone else who is kind enough to share their experiences or insights. With nearly 100% utilization due to decreased credit lines (2 more BoA letters yesterday) or closed accounts that had been inactive, and interest rates of 27+% on most cards, I don't know how much lower my once-good credit score can go. But I'm still spooked about going into default and trying for settlement. Guess I'm hoping to see evidence of softening (at least on hardship cases) on behalf of the CC companies after their meeting with Obama...yeah, right. I hope this thread continues to be active. TIA

Anyone, anyone??? We want the pros advise on this...