Settlement % Questions
Date: Fri, 04/24/2009 - 07:51
I have posted on here a few times over the past couple weeks. My household income has been dropping over the past few months and my DH and I initially wanted to do a DMP with CCCS but unfortunately the program they offered us would not help our situation, so debt settlement is where we are headed.
My question is when everyone is talking about settlement percentages, is the percent that you settle for a percent of the balance before you defaulted or after?
My concern is that my accounts are current but once I default they will add all the late fees and interest, so in the end will I actually settle for a smaller amount than what I owe now with my acounts not in default?
Thanks,
Angela
I usually suggest 30-50% of amount you owed at time of first del
I usually suggest 30-50% of amount you owed at time of first delinquency. That amount owed is usually the credit limit of the card for most people. In my experience most collection agencies start by offering around 50% of the charged off amount which really doesn???t help the consumer that much. Basically after you pay 50% of the inflated value caused by late fees, penalties and interest and then you pay the tax from the 1099c you will probably get, you end up settling at the original credit limit of the card. This means the collector lost no money. Really, they did you no favor at all. The outcome is you paid what you owed anyway and your credit is ruined. In my opinion, if your credit is going to be ruined then you might as well get a decent break on the amount owed.
Thanks Dollars, I really appreciate your help. My credit cards
Thanks Dollars, I really appreciate your help. My credit cards are all maxed out or will be shortly and there is no way I can settle for those amounts!! I'm just trying to make sure settlement is even going to be possible or if I should just head straight to BK :( I am going to try and save $500 a month and pay off $22,500 of CC's before I get sued. If I can settle for 30-50% of my balances now before fees etc. I think I can do it, but if I have to settle for more than that it might be too much!!
