Commerce Bank/BofA

Hi,

If they are being stubborn then you might not have a chance to settle with them right away.

Most of the creditors wouldn't agree for settlement if you stay current on the loan. You may miss two more payments to come in terms of settlement with BoA. I guess the account is already appearing on your credit report as delinquent, two more missed payments wouldn't further cause havoc on your credit score.

The first thing you should do is make sure you have enough money (minimum 6 months living expenses) set aside to pay your living expenses. This is more important then paying off debt, especially in your situation. Secondly, try not to let the debt control you and your emotions. You have to make sound business decisions and that's it, don't take it personally.

I would also get in touch with either a bankruptcy attorney or a debt settlement company. If you contact a debt settlement company make sure that they will do an in depth analysis of your finacial situation to determine if debt settlement is right for you. If you can afford to make smaller monthly payments to settle your debts then that is a better way to go then bankruptcy because bankruptcy stays on your credit report for 10 years. With debt settlement your credit will begin to improve when your debts are settled. If you can't afford to make any payments towards your debt then bankruptcy (chapter 7) may be right for you, if you qualify. The laws have gotten tougher on who can file for chapter 7, which is better then chapter 13. With Chapter 13, you will still have to pay your creditors.

I hope things improve for you.
Certified Financial Solutions

6 months of living expenses saved is a great idea for sure, one everyone should try to accomplish asap. However, it seems very unrealistic to expect someone to save 10 to 30 thousand dollars before attacking their debt. Get out of debt first, get out of debt as soon as humanly possible...then save your money.

How to do that, hiring a settlement company appears to work for some people, I am not one of them. I did it myself, it is not hard...certainly not worth the the thousands of dollars settlement companies charge. I might have a different opinion if credit card companies frowned upon consumers settling their debts on their own, but in fact the opposite is true...CC companies prefer to deal directly with you and many frown on the settlement companies.

Not to mention that % based fee structures are obscene. Does McDonalds charge me more than you because I have more cash in my wallet, no, it is the same product, it should have a uniform price. Until that changes, it will continue to be frowned upon.

Credit card companies do not want you to go into debt settlement because they know they will not get all of their money. Credit card companies are putting people in a very bad position by raising interest rates and lowering credit limits. They make an unbeleivable amount of money at the expense of good people through their fees and interest rates.

You can try to settle with them on your own, but they will most likely not settle until your debts are 90 to 180 days past due. Your debt may have to be sold to a collection agency before you can get a good settlement.

A debt settlement company who have lawyers supervising your file and contacting the credit card companies usually have a stronger position then if you do it on your own, expecially if they know bankruptcy may be an option. You would have to be very disiplined and have the time to do it yourself. Most people would rather not dedicate most of their time to communicating with debt collectors. In my opinion, most people are better off concentrating on positive things that will help them earn more money. The fees that some debt settlement companies charge can be high, so you should find that out before you choose who you will use. A reputable debt settlement company with reasonable fees will save you money and be well worth the fee, especially if they are providing an attorney based program.