So, we should stop paying before offering settlement?

Why there are no responses to my post..Is it because I said we're currently not behind on payments?? If so, believe me, there is no money left and we will be soon. My husband applied for a home equity loan just before the accident and was denied..I guess the answer is that we need to be 90 days behind or so before I try to get in of the CCs to settle?

Or because of the medical hardship could I try to do it sooner?

If you can afford your minimums and are just paying high interest rates I suggest you look into a DMP with a 501(c)3 non-profit credit counseling company. If you can't afford a dmp that you may want to consider a debt settlement program. Debt settlement is a bankruptcy alternative for people that are in a hardship who are either delinquent or about to be. Typically creditors will not consider settling a account unless it is at least 90-120 days late. It wouldn't really make sense to contact them to offer a settlement right now when you are current because the way they will see it is if they can afford right now to have a lump sum to settle with us than they can afford to pay us the minimums. That could back fire on you depending on the creditor and they may escalate your account to their legal dept for refusal to pay. I would just be patient and save as much as you can each month as the accounts are going delinquent. Then contact them when you have around 40% of the balance you owe and start negotiating a settlement. Be sure that when you do work out a settlement you have them send you something in writing first before you send them a dime.

Thanks for your response. I think that'll be the plan for now..Since my husband won't be working for at least the next 6 months. We'll just try to get some money together in the next few months and then maybe start with Chase and Bank of America? as far as trying to settle..From the reading I've done here, those seem like the ones that might be most willing to agree to a settlement..

Other than the obvious (not acquiring more debt..) is it to our advantage that the cards haven't been used in about 18 months?

Yes. And more than likely the original creditor isn't holding the debt anymore. The best settlements occur when the debt is transferred to a collection company or debt buyer. BOA will offer the best settlement, everyone else will be around the 40-50 cent mark.

you will need to stop paying and start saving. I would recommend you dont even communicate with them until like 3-4 months of non-payment and start the negotiations once you got some money banked. You are going to be better off when the cards go into collection as jack stated you will recieve better settlements. If you attempt to settle now while you are current they are not going to want to help you at this point it would just be a waste of time.

So once it goes to collections, do I settle with the CA or the credit card company? Who do I call once it's gone to collections?

(Thanks Again everyone!)

Some things to consider:

1. If you quit paying it will mess up your credit until you settle the bad debt or after 7 years and this stuff falls of your reports. Based on the OP it sounds like you have no choice and will just have to take a hit to your credit. It really isn???t that big of deal if you don???t mind not be able to borrow money.
2. If you quit paying you will probably be sued by at least one of your creditors within a year of delinquency. Save your money and be prepared to settle with any that sue you.
3. Always call the original creditor first to attempt settlement. They will redirect you to a collector if the account has been passed on.
4. Pull a copy of your credit report today so you have proof of your accounts and what standing they are in. Pull another copy in a few months to show proof of delinquency and when it occurred. Pull a copy at least once a year after these. You can get one free copy per year and you can also get a free one if you apply for something and are declined based on your report. Keeps these reports forever. You will eventually need them when some slime ball collection agency comes along and attempts to re-age a debt that is outside the SOL.
5. Once you miss a payment or two the calls will start flooding you. There is no benefit to talking to them every time they call which will be every day probably. Only accept a call if you have the money to settle. I would recommend changing your phone numbers and keeping them unlisted until you have settled this debt.
6. Make sure you are mentally prepared to negotiate. It is easier to do via mail if you are not a strong verbal negotiator. It is more efficient to do via phone as long as you don???t let the schlep on the other end bully you around. Time is always on your side.
7. Read this thread about debt negotiations. http://www.debtconsolidationcare.com/settlement/how-to-negotiate.html
8. Never give them electronic access to any of your bank accounts.
9. Never pay with post dated checks.
10. Never pay without a signed agreement first.

My husband and I bought a house and then (surprise) had a baby. We are not young (in our 40's) and were told (after many tests) that it would be a million dollar chance that we would conceive...well, we won the "baby" lottery and have a beautiful, healthy baby girl. After looking over our finances/budget - we decided I would stay home with the baby as the cost of daycare & gas expenses would be equal to the salary I was bringing home before the baby's birth. My husband worked 6 days a week, sometimes 12 hours a day and with an hour commute to work ... but we considered it our decision and my husband was handling all of the finances. We had credit card debt (manageable) and a mortgage + loss of my income and new baby expenses...but all was o.k. Then, two days before Christmas (kindhearted boss!) he was told that his middle management job was being 'downsized.' He would remain with the company, but take a big paycut. Well, we watch the news and we knew that it would be better to accept the cut in pay then to be cut our of a job entirely so we counted our blessings that we at least would have health insurance! We knew that we only had a short window before we would have no choice but to fall behind on either the credit cards or the mortgage. We went for a free consultation with a bankruptcy attorney and his advice was to pay nothing on the credit cards (eating and a roof over your head are the most important priorities) and to pay the mortgage until that was no longer feasible. We agreed (very solemnly and not without a whole lot of guilt) to start the bankruptcy process. We are good people, work hard, have owned homes in the past - sold them at a profit - and genuinely want to pay our debts. Unfortunately, the loss of my income and the cut of $30,000.00 in pay for my husband has left us with the unusual situation of owing up to our eyeballs with no foreseeable way out. We have spent nights awake, have fought over the spaghetti that we were having for the third night in a week and have started struggling over the necessities - like diapers and formula. We have resigned ourselves to the fact that we will lose our home. We have our faith and it is pulling us through this tough time. We try to build each other up, ignore the insensitive remarks from relatives ("why don't you (mother of an infant) get a job?", "how could you let this happen?", "what are you going to do...at your ages, and with a little one, how will you rebuild?"). We stick together like glue and live frugally. We know that even if we lose all that we have built - - as long as we have a (soon to be rented) roof over our heads and food in our bellies ... we will be okay and things can only look up from there. It won't be the end of the world. It can't be. We have 18 more years to provide for a little one who just cares that she has a warm place to sleep, a full belly and a clean diaper. That is our sanity. We will be more humbled people after this experience is over - but I bet we will be better people! We trust that the Lord has blessed us in the past and he will see us through this valley and we will look back on this as a big life lesson to share with our daughter and others in the future. You accept what life deals you, do the best you can with what you've got, be grateful for the blessings that you do have (and we all have some) and keep putting one foot in front of the other. Our grandparents went through the depression and I won't be surprised if all of us end up going through it as well - but acceptance, fortitude, gratitude for what you do have and a drive to move forward is what the American spirit is all about. We will rise above this situation. And that is the hope we hang on to.... Good luck and God bless to all out there with similar stories. :)

your story sounds familiar. My mother gives me a hard time about me not working and us suffering and what i cannot get through her head was we were suffering more when i did work. I know this doesnt make sense to her, but it is true. I was a salary manager of a resturant making about 600.00 a week. of course this put me and my husband over a tax bracket were we did not qualify for any help what so ever. We were having a hard time as it was when i got a transfer to another location (you have no choice but to go or you loose your job) That was about another 40 miles on my driving. It took me almost a hour to get to work everyday(in good weather) I was filling my gas tank every other day at 3-4 dollars a gallon. Considering i was driving so far i needed a cell phone because the area is pretty rural and no houses if i broke down at 4 am. not to mention wear and tear on my vehicle and tires all the time. All that was left wasnt even enough to cover my daycare. I dont have family that lives locally to watch him. The fee was the cheapest in town 25.00 for 8 hours. I worked 10 hour days add 2 hours round trip(that is if you get out of there on time which you never do) and all them added hours really add up. We actually saved money by me staying at home and I actually get to see my son when before i came home to tuck him into bed. I missed out on the first year of his life and i too was told i couldnt have children and know i know i have lost that special mom baby time bonding. My child actually cried when i picked him up. He wanted to stay with the daycare! I cried everytime thinking he thinks this is his home! Its sad that you work so hard to get ahead only to fall behind and sacrifice everything and still not be able to make a go of it. Im with ya guest!! you will live and learn and hopefully never go back. My blog says it all, I was terrified when i found out when i was pregnant. It should have been a happy time scince i was told i couldnt have children but instead was frighting.

Hi birdwing,

I'm assuming that these are personal debts, and not business related. You sound like a good candidate for Chapter 13 bankruptcy. In order to file, you would need to sign up for Credit Counseling by a government approved agency for 6 months. At best, they can help you get back on your financial feet, at worse you can easily matriculate to bankruptcy.

And, no creditor will even consider discussing a settlement when you are current - you need to be at least 6 months behind before they will offer a decent settlement, as mobile and dollars have said. And it is a risky undertaking and only really good for someone with no assets and a low paying job (mainly because if/when they are taken to court by a creditor, the court will be on the debtor's side).

I hope things work out well for you, I'm glad you are here, and I hope you keep us updated.

chrys