Short answer
Debt settlement is negotiating a payoff for less than the total balance you owe, which the creditor or debt collector agrees to document and accept as payment in full. It works for the right person and the right situation, and it does not work for the wrong one. This guide is built to help you tell which you are.
Key points on this page
- A settlement is a lower payoff amount, documented and accepted as payment in full, paid either in one lump sum or over time under a term agreement.
- The three common solutions in one line each: credit counseling is “what can be paid should be paid”, debt settlement is “paying something is better than nothing”, bankruptcy is “what cannot be paid will not be paid”.
- Most people looking at settlement are in the middle. They cannot fully afford the debts they have, can afford something, and would rather handle it outside bankruptcy.
- Settlement is a way to resolve a debt for less at every collection stage: the bank’s own recovery department, a collection agency after charge off, a collection attorney, or a debt buyer that bought the rights to collect.
- Most of what happens is controlled by the policies and procedures your creditor or collector has set. Knowing them in advance lets you plan the money for the settlement opportunities as they come.
- Credit cards are the most common debt settled this way, but the same guides apply to business debts, medical bills and personal loans. CRN has provided this education and these services since 2004.
Welcome to CRN’s Debt Settlement and Negotiations Guide. This guide makes up the largest portion of the debt relief and credit guides published on this site. That’s because debt settlement does not fit into a tidy package like consolidating credit cards, consumer credit counseling, or bankruptcy. I thought it important to have an introduction to debt negotiation due to the amount, and variations of content, you will find here.
The concept of settling unpaid debts, like credit cards, is not overly complicated, though it is certainly something that cannot fit on a single web page. And once you introduce the different stages of debt collection; and how to negotiate with debt collectors vs settling with your bank; or outline what you can do when settling collections in the court; the content for the debt settlement guide grew larger, and continues to expand.
Credit cards are the most common type of debt that can be negotiated and settled for less than the total balance owed. Much of the debt settlement guide focuses on this from of unsecured debt for that reason. But there are many other types of debts that the guides can be applied to. You will find guides related to settling business debts, medical bills, personal loans, and more, throughout the site.
Get the Most Out of This Debt Settlement Guide
We highly recommend you read through the debt settlement program in order. This will allow you to gain the maximum level of understanding of what credit card debt settlement is, how it will work in your specific situation, when settling debt works best, or even why you might want to avoid debt settlement all together. This recommendation includes any of you reading who may have committed to settling credit card debts that you stopped paying some time ago.
Following the recommended outline for settling credit cards is suggested because:
- Debt settlement, as it is explained by the media, and what is probably more than 10,000 websites, often does not scratch the surface of the topic (it cannot be explained sufficiently in a single article).
- A debt settlement company selling their program to anyone who will listen will often fail at giving you a detailed outline of what they are trying to sign you up for. Opting instead to put profit or sales commission goals in front of your need to be adequately informed.
- You should understand the fundamentals of settling debt so you can weigh the benefits and the drawbacks with clarity – before negotiating and settling debt yourself, or hiring a professional.
Following the way we have laid out this section, no matter what stage of collection you might be in (and especially if you are still current with payments to creditors), puts you in the best position to succeed with debt settlement.
Once you complete your review of our debt settlement guide, you will know more than the majority of sales people who are the front line for selling debt negotiation to the public.
Before You Jump Into Debt Negotiation
CRN advocates settling credit card debt as a personal financial solution. We have provided debt settlement education and debt negotiation services since 2004. We are good at it. We have made our customers, members, and readers good at it. We are also not your Aunt Mildred’s debt settlement company (no offense Mildred).
We have decided to create and publish the online debt relief program for many reasons. We may fully lay out more of the reasoning in a later update to this section, but for now, here is some of the considerations we have in doing this:
Debt settlement works for the right person and the right situation. Debt settlement does not work for the wrong person, nor does it work well for the wrong situation.
We decided to create and publish this guide so that you can tell the difference between whether settling credit card debts is right for you, and if it is, when, why, and how much of your money to put into this method for resolving debt. We hold nothing back. We offer our support freely to the public through dedicated feedback in the comments on virtually every page of the site, and on our DebtBytes YouTube channel.
If we can save you from making uninformed debt and credit decisions that can hurt, rather than help you, we want to. If we can save you money when you settle credit card debts, we will.
What is Debt Settlement?
Debt settlement is what happens when you negotiate a payoff for less than the total balance you owe on a debt. The lower payoff amount will be something the creditor or debt collector agrees to document and accept from you as payment in full. The lower negotiated amount should be something you can afford to pay in one lump sum, or over time if it is a term settlement agreement.
Negotiating and paying a lower amount to settle debts you are already late with is very common. There are elements to settling some types of debts that you can set your clock to because the process can be highly predictable. And there is both safety and comfort in this predictability.
Settling credit card bills, and other debts you cannot afford to keep up with paying, is a pretty straight forward concept. And so is determining whether settling with creditors and collectors is right for you. Let’s start by narrowing down the basic principle of the 3 most common debt solutions to one sentence each.
- Consumer credit counseling and payment consolidation is based on the principle of “What can be paid – should be paid”.
- Debt settlement is based on the principle of “Paying something – is better than nothing”.
- Bankruptcy is based on the principle of “What cannot be paid – won’t be paid”.
If you are looking at debt settlement as a way to deal with problem bills, it is likely because you are in the middle. You cannot fully afford the debts you have now, but can afford something, and would prefer to manage the situation outside of bankruptcy.
How Debt Negotiation Works
Each of your credit card lenders will have a policy for how they handle collecting on accounts that go delinquent. Some of these policies include:
- Getting you back on track by offering reduced payment hardship plans that may be temporarily extended to you for 3 to 12 months, or applied over the life of the balance in a 5 year payback schedule. Read more about credit card hardship payment plans.
- Debt collection efforts internal of the banks own recovery department.
- Charge off your debt as noncollectable and place your account with a collection agency who will bug you over the phone and through the mail to get you to pay.
- Placing your account with a debt collection attorney.
- The legal rights to collect from you could be sold to a debt buyer.
Debt settlement is a method to resolve unpaid credit card bills for less in every one of the scenarios above. That’s as complicated as the debt settlement process will ever be.
It’s the “how will debt settlement work for me” and “is debt settlement even for me” questions that make for the details.
Is Settling Debt Right For You?
Ahhh… the details. Yes, getting the best deals, and the most from settling debt, is in the details. And the details when negotiating and settling can change from one creditor to the next; from one collection stage to the next; and most certainly from one personal set of financial concerns to the next.
The majority of what happens in the process of settling credit card debts is controlled by the policies, procedures and protocols that are set up by your creditor or outside third party debt collectors. Knowing the policies and procedures for each of your accounts you will settle, in advance of the settling, is a huge benefit. You simply plan ahead financially for the settlement opportunities that will be presented, and make the right moves along the way.
You can use this site to help you settle your debts on your own. We offer upfront education about the debt settlement process, supplemented by on the ground and “right now” details provided free in the comments section of this website. And you can get one on one dedicated professional feedback by requesting an expert debt settlement consult over the phone.
We know that many people are freaked out by the concept of negotiating and settling credit card debts on their own. You also have access to professional debt negotiators, and often at the most reasonable cost found in the industry. If you would like to talk to me, Michael Bovee, about that, you can reach me at 800-939-8357, choose option 2.
In the next section I will bluntly outline who debt settlement is right for and why debt settlement is a race. You may already be in the race and not know it.
Continue on in the debt settlement guide to How and Why Banks Settle Credit Card Debt with You.
As you will see throughout the site, I respond to reader questions and comments throughout the day, so feel free to post below for feedback.
This Debt Settlement Guide includes:
An Expert Guide to Credit Card Debt Settlement (you are here)
How and Why Banks Settle Credit Card Debt with You
Types of Accounts to Include in Your Debt Settlement Plan
Why Settling Credit Card Debt is Like a Race
How to Settle Credit Card Debt Quickly
How to Talk to a Debt Collector
How to Negotiate Credit Card Debt Successfully Yourself
7 Largest Credit Card Banks and How They Settle Debt
Get Debt Settlement Letters and Agreements from Collectors
Paying Debt Collectors After You Negotiated a Settlement
My Capital One credit card has a balance of $11,000. I have stopped the pmt for 2.5 years. I received a settlement letter with a reduced balance of $6750, to make 3 pmts of $2250. $6750 is about 60% of the full balance. I have been saving money to settle the credit card. If I settle this one, my saving will be almost completely depleted. My questions are:
1. Is this a good settlement offer? or should I wait?
2. Would it be a better to settle for $5000 in one lump sum?
3. If all agreed and all pmt or pmts are made, and then the agency sensd a letter stating that the balance is zero, is that mean I no longer under any more obligation to pay or owe anything?
4. Once settled, how long is this going to stay on my credit report? How long do I have to wait to purchase a property?
5. If I do not settle this time, what’s going to happen? They sent collection letters before but never offer a reduction like this one.
Thank you in advance for your reply.
1. 60% settlement with Capital One is fair with today’s trends. I do see 50% offers approved, so it may be worth following up on that offer the collector made and see if you can shave another 10% off. If you don’t get anywhere with negotiating a better reduction you may not want to let this deal slip by. Capital One is presently the most likely to sue on unpaid credit cards. See this review: https://consumerrecoverynetwork.com/review-top-7-credit-card-lenders-best-offering-debt-relief/
2. See #1. I would not say 5k lump sum is impossible. With an account two and a half years delinquent, and a pre approved settlement letter, it could happen.
3. Yes. If you settle and make payments inside of the written agreement, your obligation will be met. Look over the settlement letter carefully and compare the contents to this outline: https://consumerrecoverynetwork.com/debt-settlement-letters-agreements/. I am considering putting up a link on this site and offering free debt settlement letter reviews. If you would like, I will start with you. Let me know in an email reply to this comment notification you get if you are up to it.
4. The settlement will not stay on your credit report any longer than the original delinquency Capital One reported. This is going to be 7 to 7.5 years from the date of last payment. Depending on the rest of your credit report, debt to income, score etc., I have seen people refi or purchase a home within 6 to 12 months. Generally you can expect a 24 month timeline to make marked improvements to your credit and access to new credit products.
5. If you do not settle you run the risk of not having the same option later. And as has been the case for a couple years already, you run the risk of being sued for collection until the statue of limitations to legitimately file suit to collect runs out.
I recently negotiated a settlement with Chase for two credit cards for my mother. They were actually pretty good to work with at first. After several calls and a couple of months we agreed on the settlement amount and that she would pay it the next day at the branch where she lives which she did. Several days later I called to check the balance and ensure everythign was done. When I listened to the automated system the accounts still had a balance so I spoke to a customer service rep. I was told I was no longer on the account even though my mother did not remove me and the accounts were not settled. I asked for it in writing and was told all I needed was his name and ID number. I’m ususally not usually so dumb and I feel terrible i got my mother in this situation. Its a shame businesses don’t have any morals or ethics anymore. Does she have any resourse? She cashed out her 401K to pay the settlement and is now on a fixed income. the only other option I know of is bankruptcy. I just wish I would have had her do that before she paid them a dime.
Jane – I would like to help you look into the situation you posted about. I want to be certain I understand what occurred. If you are open to speaking with me about the details, send an email to the same address you get this comment notification from.We can connect via email and speak over the phone at a time that works well for both of us.
Thanks Michael,
Here’s what I have:
5K with Advanta (now a defunct bank)
5K with Partners Credit Union (formerly Vista)
2K with Citi
19K with Citi
7K with Chase – account closed by me with 2% interest- payoff in 4 years
All accounts are current, nothing is behind. I also have several other active credit cards with basically no balance. I’m at retirement age and need to protect my savings and assets which are not very extensive and my current income is not covering these bills. So this is why I am investigating debt settlement though I’ve been reluctant to trash my good credit, which I may need for mortgage reasons once business turns around…..Thanks for your input.
Do you have any other loan products or insurance with the credit union?
No…nothing else with the credit union. I do have a car lease with Honda with 12 months left….Thanks
Okay, here are some estimates and some timing questions:
Without including the Partners Credit Union account I estimate you will need to pull together about 12.5k to fund settlements with Advanta, Citibank and Chase. This estimate is based on settling within about 6 months of having missed payments. The estimate would change if you could not raise the money in order to negotiate and pay the deals in that time. How long would it take to raise that amount?
I left out the credit union account because the net benefit from settling that account is not great. If you do take the settlement path for debt relief, I am going to have more to share about some strategic ways to deal with the credit union. Your answer to my first question above will change that feedback. Do you maintain a checking or savings account at any of the banks listed above (other than Advanta)?
How you set yourself up for success with your future credit needs is going to be based on some timing, income, type of credit product, and additional factors. When it comes to home loans after 1/1/2014, there will be more to your debt to income and getting approved for a home loan, than in the past. If you want to dig into the credit score and credit approval discussion, please take that discussion to the comments of this page: Debt Relief and Credit Stuff, as our comment exchange about the particulars will be better for readers to learn from on that page than this one.
Michael,
Thanks for all this information…really helpful. I can raise the 12K right away but from everything I’ve read here it sounds like I have about 6 months for the best result.
I do not have a checking account with any of these banks.
One thing I wasn’t clear on was if you are saying it’s will be easier or harder to get a home loan approval after Jan 1 2014 with regard to debt to income.
Thanks again…..
The 6 months is generally correct. There can be earlier opportunities though. Also, while there may not be an settlementagreement reached and funded for several months, there are things to be doing, and not doing, in that time frame.
After the effective date of the qualified mortgage rule, it will become more difficult to qualify for a mortgage when DTI is weighed down by the costs of monthly credit card bills.
Michael….. thanks for your reply.
In order to help me with the estimates you referenced, do I need to sign up for a membership or is there an interim step, since I’m not yet sure that debt settlement is the right choice for me. Please advise how I may go about this……Thanks.
No requirements or membership necessary. This site is a free resource. You can just post the creditor name and a rounded balance amount for each. I can provide the estimate, and offer some realistic expectations for you in a comment reply.
You do have the option of consulting with a CRN specialist to go over the details on the phone: 800-939-8357 ext 3. That is free too. If settling turns out to be the better path to debt relief, you can circle back and work with that specialist one on one to guide you through the negotiation and settlement process, or continue to participate through the comments and get online help at no cost.
I have a Discover card owe $5200 on it. I was communicating with Discover via mail, and offered to settle for 25%. I called Discovered and they said my account has been sent to an attorney. I got a call from CIR Law firm, they talked to me, I explained my situation that I cannot make any payment but can settle by borrowing money from family. I offered 25%, they said, they will not take anything less than the full amount. I recieved a letter on June 24th stating that I owe $5200 and I have 30 days to request validation, if validation is not request within 30 days, my account will be states as valid. In case validation is requested, a validation or judgemennt will be obtain and sent to you. [Question 1] How likely is that I will get sued?
Someone people have ask me to opt in for Arbitration with JAMS but i do not know much about Arbitration. I really need advice with this soon. All I have to do is send them a CMRRR saying that I dispute this debt, request validation and elect arbitration with JAMS to resolve this matter between us. [Question 2] Is this right? or do I need to also call or do something with jamsadr.com ?
I want to settle people have told me that the debt collectors will have to pay for arbitration and usually when they have to pay, they run for the hills, let the debt go or offer to settle. [Question 3] What happens if they do elect to arbitrate, will i have to pay the full amount?
1. If you are in a state where CIR is licensed I think it highly likely you are sued at this point. Are you in Southern California?
2. Depends. Your comment suggests you want to settle and are averse to being sued. The approach you outlined so far is more about:
a. Increasing the likelihood you are sued.
b. Dodging the debt because you lack resources to settle.
3. If you lose in arbitration they will get an award for the full amount which could then be reduced to a judgment.
If your goal is settling with Discover Card 25 percent is not a realistic target amount, and certainly not now that the account has been placed with an attorney.
How should I do? I am staring from 25% but like to settle anywhere to 50% or even 75%. This is beacuse I am scared of being sued. What would be the best approach in this situation?
Jay – Settlement targets with Discover Cards placed with collection attorneys can settle at 50 to 60% lump sum. There are instances where an account is flagged (cash advances or high balance of charges made just prior to payments being stopped), where settlements do not go below 80%.
You will need to call the law firm and discuss the fact that you are broke, and barely able to afford a roof, power, and food. Basically just outline the hardships that led to your inability to pay and that those conditions remain. You think you can raise a little money (loan from family friends etc), but only if it resolves the debt. Do not speak about anything other than a hardship condition as it may apply to you (e.g. hours cut, lengthy unemployment, medical, depression, family issues, mortgage reset etc). Get any negotiated agreement in writing before payment. Check out some of these critical reports about settling debt.
If you run into any trouble with your efforts, or would prefer to have a specialist guide you through the process, consider calling in for a consult: 800-939-8357 ext 3. I suggest you make the call to the collector and give this a shot on your own first.
Thanks Michael,
I did talk to the agent once and explained my hardship and did mention that I can settle the debt by borrowing some money from my dad but the agent said he cannot give me any break and the amount is due in full. I can talk to him again when he calls next.
I have been talking to some folks on creditinfocenter and people have mentioned that i need to file an answer to their mail by saying that i dispute the debt, request validation, and elect private arbitration via Jams. They say, this way the CIR Law cannot sue me and when CIR have to pay for arbitration, CIR will offer to settle. Currently I do no have any bargaining power. I got the letter on June 24 and it states i have 30 days to file a reply. How likely is that they will start arbitration? if they do, i will likely loose as they will most likely validate the debt and I have to pay the full amount. But they they don’t file for arbitration and offer to settle at 50% then it will be in my favor.
You think i should talk to the agent again or you think i should send this letter?
Jay – Our comment exchange inspired a new post about your situation and resolving your Discover debt.
I wanted to give you my perspective using what you have shared so far, which I assume is what you are looking for and why you are posting here to begin with. What I have to share is too long for a comment reply. The post linked above is a bit blunt, and required some assumptions. It is not something I wrote dedicated just to your situation. I offered some broad commentary in the post because there has not been an opportunity to do so in the comments on the site to date, and there will likely be others who can read and benefit from the editorial and any additional comments.
Before you decide whether to follow through with the dispute/debt validation/notice that you will elect arbitration you read on the CIC site, I would encourage you to consult with the experienced debt defense attorney I sent you contact info for in an email. He will be a better resource to answer your questions. He can also likely provide direct assistance to help you accomplish your goals.
I encourage you to post in the comments on that new article. If my assumptions about your sending a canned settlement offer letter to Discover is not accurate, please correct me on that, and add anything else to the page.
Addition to last post……
I forgot to mention that the current issue for me is that my income has been to low to cover the monthly payments due to the recession….so dipping into retirement savings. I’m working on turning that situation around and hope to do so soon but unsure of that timeline.
Richard – If you pay down your credit card debt to 20k, will your monthly cash flow support your ability to make the lower payments at that point, or will you still struggle with that based on current income?
If after paying down half of your credit card debt load, you would still struggle with payments, it would be a good idea to estimate the total costs of settling; how long it will take based on trends with your creditors; and what that timeline will look like set beside your credit score concern, and access to new credit products in the short to mid term. I can help you with those estimates once you determine what your cash flow will support.
Hi Michael,
I have about 40k in credit card debt. Everything is current and all of my interest rates are relatively low (2 – 7 %). My credit is in good condition, around a 700 Fico. I have some assets I could sell and possibly raise enough cash to pay off half of the amounts owed but I can’t eliminate it all. Since my credit is good and the interest rates aren’t bad, am I better off paying down 50% and working on the rest over time, rather than debt settlement. Obviously with debt settlement, I could possibly eliminate all of the debt but then I will lose the good credit that I have fought to maintain and would prefer to keep….Thanks
I have 2 cards with Bank of America and have been communicating via email. Bank of America sent me a letter stating that “Your account is eligible for settlement, you must call this number to make arrangements.” After watching your Settling with Original Creditor video, i decided to call. The Agent asnwered and confirmed my name, date of birth, and asked for the reason I am falling behind. I said my hours got cut at work. I had some health problems and not being able to work much. She said for my $10k card, settlement is available for $2600 and for my $6k card, settlement is available for $1600. I said ok. Can you send me an offical settlement letter stating that after paying these amounts my account will be settled in full. She said they cannot send any letters. They can send letters after the fact, after settling the account but not before. I said I cannot make any payments without having anything in writing. She again said they cannot send any letter. I said ok then have a nice day. She said, have a nice day. Charge off date is in 93 days. What just happend and what to do from here? Sounds like a red flag, people say if you don’t get it in writing, it did not happen and they will just post the money as a payment to my account rather than settling.
Jay, If you want to take advantage of the offers and settle these Bank of America credit cards, review the guide laid out in this post about getting settlement letters kicked loose.
I would also recommend reviewing this post about recommended ways to pay the settlements you get.
A couple of ways that are effective to get the settlement letters, or the negotiations completed with confidence at this point:
1. Let the person at Bank of America internal recovery department know that you are having to borrow some of the money, access money for another sources (or something similar). Without a letter showing that the amount you are paying is the final payment, you will not be able to access the funds. You are willing to set up the payments for say June 29th for ach payment direct from your set aside account, which allow the time needed for them to mail the letter outline the settlement agreement.
1a. Raise your discussion to the next level with a collection supervisor at Bank of America.
2. Record the call. Be upfront about the fact you are doing so. And that the reason you are dong this is in the event a letter evidencing the settlement is not mailed out by Bank of America, the recording is your only proof of the agreement. Ask for the recovery persons full name, what office are they working out of (State and city – bank of America has several collection and recovery locations).
3. Let the accounts progress further in delinquency and call BofA about every 2 weeks to assert your ability to accept the offer, but need the letter to access the funds.
Bank of America, and other original creditors, have become a bit protective of sending out the offers without a payment amount and date set up in there system. #1 above addresses this in most instances, but there are instances where you do have to escalate your concern to supervisors… repeatedly. Also, I do have files that have recorded the calls, funded the settlements on schedule, and later received the letters outlining the settlement and that the debt is resolved.
Hi,
I am looking to settle a National Grid utility $2,982.00 debt with the National Recovery Agency linked to my foreclosed home. I recently tried to settle and was told that they do not settle utility bills whatsoever because its thier policy. Off course I do not believe them because, to me, once a bill gets to a colleciton agency it makes perfect sense for them to try to recovery what they can get. What are my options? How can I best arm myself to negociate when I call back so that I can get this settlement off my credit?
Judine – How long ago was the bill last paid or considered current? What do you mean by getting the settlement off of your credit report?
Hello Michael,
I have lost my alimony benefit due to my ex husband loosing his job. I am a commissioned sales person and have no steady income yet other than the alimony. I can borrow some cash to settle. I owe $40,000 to BofA, $3800 to GECaptial, $4200 to Citi. What do you think my settlements could be? I have always had great credit, but now have missed my first payments on these cards. I do not want to commit to paying a certain amount each month for 36 mos as I do not know what my cash flow situation will be.
LM – Settling with Bank of America, GECapital and Citi, will be fairly predictable if you can come up with the money to fund what is negotiated withing the first 6 months of non payment. Assume for a moment you will need roughly 16 to 18k to settle them all. How quickly can you raise that money?
If 6 months is impossible, you then have to decide which ones you can and should settle with using the money you will have available in that time, and then target the next one to be settled in second stage collection, third stage etc. Once these banks send the accounts out for collection, or sell them off to debt purchasers, the game changes a bit, so an estimate of realistic savings through settlement cannot really be offered until you know which bucket your creditor drops the account into.
Post a comment reply with what ability you have to raise money, and over what period of time. I can then offer some more drilled down expectations and what debt settlement is going to look like in your situation, per creditor.
No, it’s annoying. I don’t know if it’s good idea to settle it for few hundred to get it over with. Do you think they going to sue even its beyond SOL?
Thank you for the advise.
I understand the annoyance. It can indeed be worth the cost to get the settlement and just put it behind you. I do not think you will be sued on a debt this far passed the SOL. If you were, you would need to respond to it, but with a simple “this debt is time barred” defense – which would put that to bed quickly.
If you are serious about settling with RJM and want some guidance on it, call in for a consult: 800-939-8357 ext 3.
Michael,
Thank you so much for all the helpful informations. You guys are awesome!!!
I’d contact by debt collector for old credit card debt , the debt beyond the statue of limtation to sue. if the attorney or credit consultant firm represent me to negotiate for lower settlement, is it going to restart the statue of limitation?
Thank you,
JS – There are some limited instances where restarting the SOL is a concern. But with the SOL already being expired, the concern dwindles. Who is the debt owed to, what is the amount owed, and what is the name of the debt collector contacting you?
Michael,
RJM Acquisition Funding LLC, original creditor: citi bank for 2900. It’s over 12 years and it didn’t show on the credit report.
Thanks. You can certainly settle, and with a pretty dramatic savings through RJM Acquisitions. Is there a specific reason you are looking to settle this old of a collection account?
Hi my husband and I have been with a credit repair company for the past year, they have been able to get some things taken off our credit reports, but about 10 collection accounts still continue to report. We have sent out as many as four validation letters asking for proof that these collection accounts are our, but have only received settlement letters as responses. These accounts are all past the SOL. We got per approved for a mortgage but the final approval has to be done pending the removal of these collection accounts. At this point I would like to settle if that would mean them being removed form our credit report. Any advice?
Annie – Settling credit cards and other debts in collection will not generally get the entries removed from your credit report. By settling you do get the entries to reflect that there is no longer a balance owed, and that can help get your loan pushed through. But if you were expressly told that your loan approval was contingent on the debt collection items being “removed” from your credit report, you will not likely succeed.
Speak with the broker/loan officer and be certain that removal is required, or if settling the debts and getting them reflected as resolved is sufficient to meet your goal. If settling will indeed get you over the goal line, post a comment update. I can then offer more feedback and will want to know who you owe and how much in order to offer some tips and settlement targets for each.
Its been over 6 months… the place I got the letter from was CCB Credit services
Nancy – A realistic range of targets for settling your charged off Bank of America credit card with CCB Credit Services would be between 30 and 45% based on today’s trends. There are reasons accounts settle for the lower end, and even exceptions to the range. There are payment alternatives in this situation as well. What amount of money can you pull together to settle with CCB in say, the next 30 days?
I can get at least $2000
You can get this done. Are you up to doing this on your own? If so, would you prefer to have an expert guide you through your own successful DIY settlement, or are you confident enough to skip the one on one support?
Not sure how they wpuld try to handle me offering only 2k… I guess something is better than nothing. Who can help? Does that cost as well?
We do offer a membership program that will provide you the ability to work one on one with a CRN specialist who will guide you through the process of settling your BoA account yourself. The CRN membership debt relief program is what we are known most for. You can learn more about it on this page – CRN membership
If you are ready to fund your settlement, and the CCB credit services is the only account you need to contend with, you can be through this in as little as a couple days. If you are considering membership, it is also a good idea to call in to us for a free consult in order to be sure you have all question answered first, and also to establish whether membership offers you a value. Call 800-939-8357 ext 3.
Thank you so much :))
Got a collection letter from a collection agency last week on a $5,400.00 credit card debt from Bank of America. Is it too late to make a settlement agreement with them?
Nancy – It is virtually never too late to settle an unpaid credit card debt. How much you settle your BofA credit card debt for, getting time to pay and other nuances can change during the life cycle of a debt.
How long has it been since you last made a payment to bank of America?
What is the name of the collection agency that has the account now?
Post your answers in a comment reply if you would like some additional feedback about targeting amounts to settle for etc.
I have been called at my job , threatening me that a warrent is being issued out and I have 30mins to money gram payment to they office , for a payday loan that I settle two year ago with someone else calling foing the same thing ..And I can fine the receipt because I did it with a prepaid card …. How can I solve this problem and they still calling to collect this money
sherron – Do you know who the debt collector is that is calling? Any identifying information about the debt they are collecting, a number from caller ID? What state do you live in?
Legitimate debt collectors do not make threats about warrants being issued if payment is not made in 30 minutes. A scammer will do that though.
Post answers to my questions in a comment reply and I can provide some additional feedback from there.
Hi, I owe more than $10,000 in credit card balance. I reached the point I cannot pay the minimum amounts due. In total I have like 6 credits cards with three creditors. What is the best options in this case consolidation or settlement. Thanks
Khalid – What is the actual total of your combined credit card debts? Are you late on any of the credit card payments? If so, post how far behind. Name who the three credit card banks are along with answers to the other questions in a comment reply. I can then better help you make the comparison between credit card debt settlement and debt consolidation.
Hi Michael,
The total debt is $14,000 owed to Chase with 3 credit cards and Capital one with 1 credit card. Thanks for your help.
Khalid
I am not behind any any payment yet. Thanks
Khalid – Start off with calling 888-317-8770 and get a direct quote about how low your monthly Chase and Capital One credit card payment can go. That call is free. Be ready to answer some basic income, expense and budget questions. You will be talking to a licensed credit counselor about consolidating your credit cards using a debt management plan. If you determine that is a good direction to go, that is great. If you learn something from that call that suggests debt settlement is better option, come back and post an update and lets go from there.
If I consolidate am I going to loose other credit card, like American Express and Bank of America. I am very concern to keep those credit cards. Also after consolidation how long it takes for my credit score to be good.
Khalid – Keeping accounts open and using them when you are in a debt management plan, or settling some credit cards and not others, is not common. You have more flexibility to do that if you are settling than by consolidating (unless you are using a consolidation loan). Perhaps you should call in and talk to a CRN specialist about your situation in order to get into the details further. Call in an talk to us at 800-939-8357 ext. 3.
Khalid – I estimate your monthly payment with consolidating credit cards with Chase and CapOne to be roughly 280.00 a month. If you are confident you can make an estimated 280.00 payment in a consolidation that would be the path of least resistance and headaches compared to settling.
I estimate you will need to come up with about 5600.00 in order to settle your credit cards with Chase and Capital One. Depending on the balance of your Capital One card, that estimate can swing higher. If you are not confident you can afford a lower payment of 280.00 when consolidating the credit card bills, you should then focus on how long it will take you to pull together the 5600.00 needed to settle. Settling with Chase and CapOne means not making your monthly payments, so some of the money you need to settle will come from saving up monthly. But you can and should look to accelerate your debt settlement plan by pulling money together from whatever sources you can in order to get the debts settled quickly.
If settling makes more sense for your situation, you should determine what your options to raise the estimated 5600.00 to settle in the next 6, 12, or 18 months will be.
How do you view those two options given my above feedback?
I need help settling with a debt collection attorney. They would not accept my offer for a settlement. Should I just go to court and try there. I tried to settle a 13,000 debt for 10,000. The attorney would not accept it. He told me if I paid it off I would still have to go to court too. Is he trying to get me to pay for court fees as well?
Hi Jennifer. Settling a credit card debt with collection attorneys can sometimes come with an increased difficulty level. Settling early on with creditors is like a somersault. Getting a debt settlement from a typical collection agency is more like a front flip. Settling debt with an attorney can sometimes be like a double back hand spring with a tuck.
I noticed that you submitted a consultation request form at the same time you left this comment. You can get into the details you need to about resolving your debt with the CRN specialist that will be reaching out to have that consult with you.
Hi, I just had a question about a judgment. It was entered in June of 2008 for $724. I called the law firm to pay it recently and they told me they could not accept payment, as it had been recalled by the original creditor. The original creditor is showing a balance of $1044, with a past due of $167. What is the best way to go about this? I was hoping to settle with the creditor, but I also don’t want the judgment to start collecting later. We are hoping to finally buy a house, so I would like to get these cleared ASAP. Thanks for any help you can give me!
Melissa – If your goal is to pay off the judgment you will need to contact the debt owner and set that up. Be sure to get the agreement for payment in writing. With a judgment in the court record, you need to be certain that a satisfaction of judgment is filed with the court.
Once you pay off the judgment debt (with documentation), and make the payment, keep a record of that payment with the other documentation in case you need it later. But the record of judgment satisfaction in the court is all you would need to direct anyone’s attention to if there were any later attempts to collect on a resolved debt.
Hi, what if theres a possibility that she suscribed to something and they charged and she went down to t-mobile awhile back and told them if they can take it off or stop it and the women said she would at t-mobile but i don’t think she ever did since we got that debt letter from MCM. Does that mean we still have to pay it or do you think they’d cancel the debt?
Linda – You have a comment string going about this issue over on this page: https://consumerrecoverynetwork.com/debt-settlement-letters-agreements/comment-page-1/#comment-8443
I like to try and keep as much of the comment exchanges as condensed as possible. If you can copy and paste your comment over there, I can move this one over there afterward.
If there was a discrepancy in the billing that your sister can prove is in her favor, and that means the debt should have never been sent out for collection or sold off to a debt buyer, settling the debt would not make sense, but your sister is going to have to be ready to fight this. Once accounts have reached the point they are sold off to a place like MCM, T-mobile is not going to be all that motivated to work with her. Especially if she is not a current customer.