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DIY Debt Settlement - Received first response

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Hi - Last week I sent a letter to all my creditors requesting debt settlement. I have 10 creditors that I owe money to. I explained to them in the letter that my husband got injured over a year ago, and as a result of his injury and a slow economy his business income is less than it used to be. I also explained that I borrowed the money from a family member and have several other companies to clear my debt issues and have a moderate amount of funds. I sent a letter to all of mine and my husbands creditors asking to settle the debt and pay 30% of the balance owed.
If I were to pay each of the creditors 30% of what I owed I would have just enough money from the money I borrowed to pay everyone.
So today I got my first phone call - I called them back - was as nice as I could be. The guy I spoke to was really nice - but said Wells Fargo could only settle for 50% of what is owed. I explained that I have two other creditors that have already accepted my settlement at 30%. I told him I could not afford to pay the 50% and if I have any money leftover after I settle my accounts with the other creditors and pay 30% I will call him back. So he put his manager on the phone. Good Guy/Bad Guy act. So now I get the bad guy. Wanted to know why I dont think I should have to pay them, Do I think things are free? Why dont I go get a job? And a ton more questions that I told him "I didnt think were any of his business".

Wow, now I remember why I stopped talking to them last year!

My husband and I have always had nearly perfect credit all of our lives. We have never been late with payments, never exceeded out credit limits, never charged more than we could handle. Then my husband got injured and we had two small mouths to feed. We lived off our credit cards for a year, thinking that "next month will get better" Well, next month hasnt arrived yet.

Sorry about the long story, I guess I just had to vent. I wanted to know if anyone has or is doing DEBT Settlement ? I need some advice on how to handle this?

There are alot of people on this board that are in the same boat as you are and they will be along to offer to advice. Good luck and keep your chin up.

Sub: #1 posted on Tue, 08/26/2008 - 12:28

ladybug ladybug

(Posts: 2757 | Credits: )

Wells Fargo is terrible to deal with. I would call back and ask for the loss mitigation dept. You might have better luck in that department.

Sub: #2 posted on Tue, 08/26/2008 - 12:37

desperatelyseekingsanity desperatelyseekingsanity

(Posts: 1129 | Credits: )

How far delinquent are you on your accounts? If they haven't been charged off yet, they may be easier to deal with as the charge off date gets nearer.

Sub: #3 posted on Tue, 08/26/2008 - 12:51

alias1958 alias1958

(Posts: 1230 | Credits: )

I have heard from a lot of people that if you don't like what you are hearing from one person, politely excuse yourself, hang up, and call back 8 hours later. You'll likely get a different person AND a different supervisor, and start fresh with a brand new clean slate with a new person. Stay nice, stay calm, and be persistent.

Good luck!

Sub: #4 posted on Tue, 08/26/2008 - 12:52

smo65d11 smo65d11

(Posts: 1468 | Credits: )

Dobuble Post

Great job playing hardball. I wouldn't answer any of the other questions because you were perfectly clear to begin with. I do think it will take a number of calls on your part to bring them to 30%. Worst case scenario is they eventually file a complaint and you settle at the 50%.

Sub: #5 posted on Tue, 08/26/2008 - 13:18

Moderators Cum Industry Expert
(Posts: 1078 | Credits: )

I am almost a year delinquent on all of my accounts. What is a charge off? I am dealing with a collection agency and not Wells Fargo. Is that a charge off? I found a website on the internet that showed how much debt reductions various Companies have accepted. I noticed that Wells Fargo did range anywhere from 50 to 81% reduction, so I didnt think that asking for 70% reduction was to far fetched. Does anyone know when it is best to bargain?

Sub: #6 posted on Tue, 08/26/2008 - 14:19


Accounts are charged off at 180 days delinquent with the original creditor, so your accounts have already been charged off. What that means is that the creditor wrote it off as a bad debt on their books. It doesn't mean that they will not still attempt to collect the debt. If you are dealing with a collection agency, the account may still be owned by Wells Fargo, and they may just have a collection agency collecting for them. Or the account may have been sold by Wells Fargo to the collection agency. If the account has been sold by Wells Fargo, then Wells Fargo now has no say on the settlement amount, and it is solely up to the CA.

Sub: #7 posted on Tue, 08/26/2008 - 14:28

alias1958 alias1958

(Posts: 1230 | Credits: )

can you give a brief idea of the tax problems? I had never heard of tax problems in the past?

Sub: #8 posted on Tue, 08/26/2008 - 15:57

smo65d11 smo65d11

(Posts: 1468 | Credits: )

smo - I believe he is talking about the 1099C you may get if your settlement benefit is more than $600. Per the IRS you may be taxed on the difference of the amount owed less the amount you pay.

Sub: #9 posted on Tue, 08/26/2008 - 16:52

desperatelyseekingsanity desperatelyseekingsanity

(Posts: 1129 | Credits: )

Yes, if your "forgiven" debt is over $600, then the total "forgiven" amount has to be reported to you by the creditor on a 1099c form. Unless you were insolvent at the time the debt was forgiven, then you owe taxes on the "forgiven" amount. Obviously, the taxes would probably be less than the amount of the debt, if you were to pay the debt in full. You can read more about it at the IRS website:

http://www.irs.go v/publications/p4681/ch01.html

Sub: #10 posted on Tue, 08/26/2008 - 17:01

alias1958 alias1958

(Posts: 1230 | Credits: )

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