Debt Settlement
Date: Sun, 08/09/2009 - 11:11
Quick background, income dropped 40% in 4 months
8 credit cards total $18,000 behind 2-3 months. I can't afford to pay them right now, inquired about dmp but the payments didn't drop enough to pay. I will be getting about $7,000, next Feb, should I wait it out and then try offer settlements then. I notified all the credit companies that I cannot pay and when they call I tell them that my situation hasn't changed.
We went through a similiar situation. We were at about $40,000.
We went through a similiar situation. We were at about $40,000. This included $20,000 on a car note. We had to let the car go back, and ended up defaulting on the credit cards. Nobody was willing to work with us for more than 3 months, and that was only the small accounts. We ended up hiring a bk attorney after about 4 months, and have been making payments to him since then.
Trying to settle them with (I am assuming) a tax refund may work. You just need to make sure that you get written agreements. You will probably also be dealing with collection agencies, and not the original creditors. They may or may not sell the accounts by then. And there is no guarantee that they will settle. Some banks will not even negotiate, or so I have been told. They want it all or nothing.
If you settle for less than the amount due, you will be liable for income tax on the amount forgiven. You will be sent a form 1099c and have to claim it. That could put you into a different tax bracket. You also need to make sure that the settlement agreement is paid in full. Some collectors will sell the balance of the account to another ca, and you will still be liable for that amount.
Settlement can be done. You just need to do your homework, and make sure you have all the details worked out before you pay anything.
Many CC companies are offering hardship programs for people who
Many CC companies are offering hardship programs for people who have lost their jobs and/or income. You should talk to them first and see what they have to say.
I have called most of my major cards...boa chase citi and they h
I have called most of my major cards...boa chase citi and they have all offered me a hardship program. Very low interest and set payment ranging from 12-60 months. Call them. It doesnt hurt to ask!!
Just make sure you understand the hardship program completely.
Just make sure you understand the hardship program completely. They want to keep you paying interest and in debt to them as long as possible. Make sure you can make the payments and still get out of debt.
Thanks for the responses, The problem is that my fico is already
Thanks for the responses, The problem is that my fico is already in the tank, so If I can save some money and get some settlements down the road -vs- hardship and possibly be in the same boat a year from now, thats my choices. If I do the settlement route I will keep posting my journey.
