Short answer
Most of the heavy lifting happens when you are between 150 and 180 days late on the card. Have the money ready before you call, know roughly what that bank approves, and make your offer as a round dollar figure rather than a percentage.
Key points on this page
- The best window to negotiate directly with your bank is between 150 and 180 days late, before the account charges off.
- Settling for pennies on the dollar, meaning 10 cents or less, does not happen. Targeting unrealistic amounts is a good way to blow the opportunity to settle.
- Treat settlement percentages you read online with caution. Bank policies move over time, so look for current information about your own creditors.
- After 90 days of nonpayment your calls are usually routed to the bank’s recovery department. That team is who you can settle with.
- State your offer as a round dollar figure, never as a percentage, set short of or close to the low end of what that bank is known to accept. Expect questions about your income, expenses and other debts, because recovery staff and collectors have real time access to your credit report.
- A refusal can come down to being fewer days late than you thought, looking more collectable, questionable account activity before you stopped paying, or that creditor simply not settling right now. Pay any settlement from a separate account you set up for that purpose.
If you’ve been following the early tips I suggest for how to prepare to negotiate and settle directly with your credit card bank, you are already aware that most of the heavy lifting of the settlement process will be when you are between 150 and 180 days late on your credit card. If you have not read my previous article in this guide, What to Say to Bill Collectors, please do so now. Speaking with debt collectors is a vital component of being able to settle debts on your own.
NOTE: This post is part of our Debt Settlement Guide. If you’ve missed any of the previous content, or would like to start at the beginning, please see the links at the bottom of this page.
Before I get in to how you can go about targeting the amounts you’re most likely to settle at with each of your creditors during negotiations, I want to make something abundantly clear.
Settling Debt for Pennies on the Dollar
The internet is both friend and foe when it comes to looking for information about settling credit card debt. You will have no trouble finding websites, and offline promotions, of debt negotiation programs enticing you with claims that credit cards can be settled for pennies on the dollar. But if you define “pennies on the dollar” as 10 cents or less – it just doesn’t happen.
There can be one-off situations (mostly during the height of the economic downturn that began in 2007), where very low settlements could be achieved with some select lenders. But it is not the norm, and certainly not today.
If you have come across content or advertisements suggesting you can settle at these low – Low – LOW rates, you may want to forget anything else the source says about negotiating and settling. Targeting unrealistic settlement amounts is a good way to blow the opportunity to settle with your bank. Anyone leading you to believe that you can settle debt for pennies is more interested in selling you something than giving you accurate expectations and information.
Soapbox interlude about debt negotiation content online: Be careful of taking something you read too literally. Anonymous information is hard to verify, and information may be dated. While one national bank may have been settling for 40% in 2010, you may be able to target your negotiations with that same bank at 30% today. Conversely, a bank may have made settlements with many of their card holders for 15% to 20% at the height of the recession, but now rarely go below 30%, and more often will settle at 40% prior to charge off. It is far better to look for current information regarding your creditors and collectors. It is also best to not read too much into anonymous posters from yesteryear when it comes to negotiating settlements that impact you today.
How Much Your Bank Will Settle for
Each credit card lender will treat monthly payment reductions, collections, and negotiating settlements a little differently. But the similarities between credit card lenders policies for settling will generally take you as far as the amounts you should realistically target for each account.
Having reasonable and real time trend-based expectations for how much of a savings you can negotiate each of your credit cards for makes planning and succeeding with your goals obtainable.
By now, you should have a grasp of the fact that settling credit card debt is not rocket science. But there is a basic formula to follow in order to maximize savings and limit risks. The more creditors you have, the more important it becomes to strategically plan for which accounts to negotiate with first, and which would be better settled with outside debt collection agencies (after charge-off).
How you develop your plan should be based on how much money you have available to settle for the best rate of savings – given your particular lenders policies at the time you are negotiating with them – set beside any credit cards you have with a lender that is more aggressive in collecting.
Two ways to get help targeting and prioritizing what to negotiate for, and who to negotiate with first:
- Post questions in the comments below, or better yet, search for your creditors name in the upper right search box on this page and find a page dedicated to that creditor and read through what others are doing and post questions in the comment section there.
- Call me at 800-939-8357 ext 2, or schedule a consult (top of page menu) with me where I can provide a basic outline over the phone.
Who You Call to Settle Your Credit Card Debt
With your list of credit cards prioritized, and your timing set, making your calls to negotiate will start like prior calls I have suggested. Different creditors have different departments that handle delinquent accounts. In the first month or three of missing a payment, your calls may be handled by the bank’s customer service department. After 90 days of non-payment, calls are often routed to, or made by, a department that handles bank recovery.
Your bank’s recovery team will be who you are able to settle with. The number you call when you are ready to negotiate the settlement could be:
- one you received in a collection notice from your bank recently.
- the number on the back of your card (you will get routed to the department handling collections and recovery).
- dependent on the creditor – your account may be out with a collector even before the account charges off, in which case you may be calling a collector, are get routed to one when you call in.
What to Say When Negotiating Your Settlement
Take a moment to watch this video I did about what to say, and stay away from saying, when you are talking with a debt collector.
The previous article should have helped you with your frame of mind when making the call to negotiate and settle. You may start your negotiations with a simple restatement of your financial situation. If you have made prior outreach calls to your bank up to this point, your story of personal hardship is what you will repeat. This time however, and depending on what your notes say from prior calls, you can either:
- Repeat an offer that may have been made to you in the past (early on a bank rep may have said the account could be settled for say 60%), or you may have gotten a piece of mail from the bank offering some vague reference to settling, or a hard number or percentage. In this case, you simply start off by saying “I am following up on that earlier offer to settle. I tried everything I could think of to raise that amount, but fell short. I did come up with $_____. If that could be accepted as settlement, I can pull that together pretty quickly.
- Bring the subject of settling yourself by saying something like “I broke down and shared my situation with family/friends. They suggested they may be able to help me with a loan. They do not have much to give, but maybe enough to settle with. Is that a possibility?
There are many ways to bring up the subject of settling when you call in. When you’re calling in to negotiate and are between 150 and 180 delinquent, you will typically be speaking with someone trained to help you with that. You should already have a good idea of what the bank you are calling to negotiate with will reduce the credit card debt to in a settlement. Your offers to settle should NOT be verbalized as percentages, but as round dollar figures that are short of, or really close to, the low end of what that bank is known to approve and accept.
Answering Questions When Negotiating
A few years ago, some credit card issuers started asking a litany of questions before agreeing to a settlement. The list of questions is similar to what they ask in order to enroll you in a long term hardship repayment plan. You need to be prepared to answer these questions. Information about your income and basic expenses should prove to them that you are in the red and unable to afford anything other than the settlement.
People working for your credit card banks internal recovery department, and outside third party debt collectors, have real time access to your credit report. During the negotiation call you may get hit with questions about other debts that are not being paid, and certainly about debts that you continue to pay (house payment, auto, and even other credit cards). How you answer questions about other debts that you are paying is often going to be common sense.
Depending on the question asked, you may respond with something like:
- “Of course I am making my mortgage payment. I would be homeless if I did not.”
- “If I quit making the car payment, they take the car, and I have no way to get to work/look for work.”
- “That other credit card is not getting paid by me. My brother needed help and he is the one that made those charges. He is the one with the money to pay that one.”
- “That credit card bill is only $20.00 a month. That one is getting paid because I can afford that. I could not qualify for your lower monthly hardship payments, which is why I am willing to pool all of my resources, and even borrow money from family to settle if I can.”
Answering questions when on the phone with your original creditor, while trying to negotiate and settle your credit card with them before they charge it off and drop your account into the external collection pipe line, is normal and okay to do.
What if you call in and are told the bank is not settling accounts at this time, or that your account does not qualify for settlement at that amount, or at all? This can happen. Here are some reasons why it may happen to you:
- Your math regarding how many months you are behind added up to the perfect time to call and negotiate, but the banks math says you are 1 or 2 months less behind than you thought. Ask how many days late you are to confirm this.
- You just look more collectable. It sounds funny when you are not paying on time, I know. But if your balance is say 5k, and you are paying other credit card bills, your account may be flagged and can mean no negotiated settlement. You may have to settle with an outside collection agency in a month or three.
- That specific creditor is just not doing any settlements. It happens. They are not required to settle with their card holders. Refusing to is their prerogative. It is not common to flat out refuse settlements in today’s economy, but it sure was 10 years ago. American Express is a good example of a bank you may not be able to settle with directly.
- Sometimes you may be dealing with an original creditor who refuses to settle at 165 days late, but who is suddenly willing to negotiate when you call in and are 174 days late.
- You may have had account activity leading up to stopping payments that the bank finds questionable or red flags. This can include balance transfers, cash advances or large dollar transactions.
There are ways that a professional can help you work around these issues, so do not rule out getting help when you need it.
Negotiate Credit Cards Before Charge Off
You know that the first and often best opportunity to negotiate and settle for the lowest payoff will be with your bank, and prior to your account charging off. The better you understand why you should target as much of your debt negotiations with your original lenders, the more strategic, committed, and proactive you can be in raising the money you will need. You will want to understand how and why to prioritize some of your accounts over others for earlier negotiation. You should also know that it is okay when some of your debts progress into later stages of collection. Some of your debt may in fact be best negotiated and settled in 2nd or 3rd stage collections.
Do not hesitate to get help and feedback when prioritizing the debts you will negotiate first, second, third etc. You can do that by participating in the comment sections below, or on any of the pages you visit on this site.
You should know that it is best to be prepared to pay your settlements from a separate bank account that you set up specifically for this purpose. Having your “set aside” account set up in advance is just good planning.
Negotiating with Third Party Collection Agencies if Your Account is Not Charged Off
There are circumstances where your creditor will send your account out to a third-party debt collector before they charge off the account. American Express is the best example of a creditor who does this. Nothing much is going to change in your approach to negotiating an account that gets sent out for collections early, but that is still less than 180 days delinquent. There are a couple of subtle things to be aware of when negotiating with contingency debt collectors.
The next stop in our guide is not so much a “how-to” as a “need to know”. When wanting to settle debt after charge off, it’s important to know what to expect from your lenders, in terms of their policies, current trends, and collection practices.
Next is learning how the top 7 banks handle debt settlement, and setting realistic goals for your negotiations.
If you have questions and concerns about settling your debts at this stage of collection, and moving forward, post in the comments below for feedback. If you would like to talk over your situation with me you can reach me at 800-939-8357, choose option 2. You can also submit the “talk to Michael” form in the sidebar.
This Debt Settlement Guide includes:
An Expert Guide to Credit Card Debt Settlement
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 (you are here)
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
I recently had a baby and my monthly payments are getting tough to pay. I have an account that’s around 6k but haven’t yet missed a payment. I was given a little money to help pay off my credit card debts, would credit card companies still consider a settlement amount if I haven’t missed a payment?
Unfortunately Salina, no, credit card banks do not offer anything close to an affordable settlement (or any reduction at all) when you offer to settle for less, but are current. You have to be late by 5/6 months or more to get the better outcomes.
My wife owes $11,500 credit card debt with Capital One. It has not been paid for several months and they sent an offer to settle for $9500. I think we can get a much better deal but I have a few questions about doing the settlement.. First, I saw on another site where they said to get them to say “paid as agreed upon” instead of “settled”. Will this help your credit or is this something that will not help in the long run. Second, the same site said to ask if they are willing to erase the account history or “tradeline”. My wife asked them to do this and they said they had no idea what she was talking about and wanted her to pay them with a bank transfer right away. She did not do that, and now wants me to deal with them, so I am trying to get as much knowledge I can before I call.
We do have the cash to pay this because I took out a personal loan to lower the interest rate on some credit card debt I have as well. We were out of work for some time as we went back to school and it took much longer to find jobs than we thought. We are both employed now and can make payments on the $30,000 we owe, but I want to settle this for the least amount and pay the rest with the personal loan. We also want the best for her credit rating because we are looking to buy a house when the rest of the debt is paid. We will be putting about $12oo a month toward the $30,000.
Is Capital One, one of the companies that does not like to send the deal in writing? I am going to call this week, but my wife said they told her they would not send a deal in writing. Also should I try and get them to change the wording as I mentioned above. I also heard about a “pay for delete” but was told this only works on smaller amounts bellow $1000.
Thanks in advance,
Scott
Capital One is not going to report a settled debt as pays as agreed, or delete the negative in return for money. They are going to meet their minimum legal requirement for credit reporting and that’s it. But that is fine, as it is all you need them to do for the most part.
Capital One regularly sends out settlement agreements before you pay.
The other site you are reading is leading you down a path that only complicates things for you.
And yes, done right, you can settle with Capital One for much better than what is on the table now.
If you like, fill in the talk to Michael form in the right column. When I see that I will email you to set up a time to go over your situation on the phone.
Hello Michael, This is a great site and valuable tool to learn in process of getting out of debt. Hats off to you. I have a Citi bank account that I opened a year ago with 12K balance transfer. My sincere hope was that I will pay it off in a year but got salary cut and ended up not being able to make up to my hope. I have 14 K now on this Citi and in addition I have 20K on BOA that i have been using for years. I want to settle these debts. I missed my one month payment after paying for 13 months to Citi. My question is does my balance transfer make it hard to settle Citi ? What kind of justification I may have for that. I have talked to Citi when i was current that I am facing hardship, and also after i missed payment I informed them that I am trying to arrange funds but not able to. They have only said sorry and not talked about any hardship plan etc. Would appreciate your insight.
It is difficult to get the best outcome when negotiating settlements on accounts that have recent balance transfers and cash advances. That is made even more so when the percentage of balance owed is the bulk of those transactions.
You are also way too early to be talking settlement with Citibank.
Fill in the talk to Michael form in the right column. I will see that and email you to set up a time to go over your situation briefly on the phone. I will be able to give you more actionable feedback after asking some detailed questions.
Very helpful information! I’m helping my 28 yr old son who has been suffering depression and “checked out” on things he couldn’t deal with. He was served a summons two weeks ago through Portfolio Recovery Associates for a credit card acct from US Bank. I don’t even know original debt amount the Summons is for $6,300. He has 30 days to file a legal response and already half way through that. I just found this out. He had a job change a few years ago, with much less income and became a single income household. He hasn’t made a pmt in 2 years. Child support is about to be revised taking 25% of income so even a garnishment wouldn’t pay out to creditor. I’m willing to loan him whatever he can negotiate as settlement. He has one other credit card of around $2700 needing attention also, I don’t have the details yet. Can I speak with the creditor on his behalf, with him present? What % can we expect from Portfolio Recovery? We live in Oregon. With 14 days left to file legal response timing is a problem. Thanks for any input.
You can speak on his behalf if you have written or verbal authorization. But be careful, as a parent can be vulnerable to falling for debt collection verbiage designed to get you to pay the most.
If it were me, I would file a general denial as if I am going to fight collection with PRA first. That takes the sense of urgency out of this and often allows for better negotiations. I rarely see litigation files settle for less than 50%.
Check out this post about settling when sued for more.
I would like your opinion on what I can reasonable expect from Chase Bank. I talked to them yesterday and they offered 90% settlement — I called prematurely as I have not yet missed a payment. My corporation dissolved (-200K+ loss carryover) in 2010 and I was the guarantor on the business credit card balance of $22K. I have paid $12K in interest and $4K in principle and the balance is still $18K. I have since been disabled and am on a fixed income and have run through my savings. After basic bills (house,insur, utilities) I have about $300 mo left before payment on this card which is over $300. However, I have an 800 credit score and other cards all current on my credit report – only one of which has a balance ($10K) – and I have money in a 401K (I am 58) working against me. It’s interesting that this card has never shown on my credit report (because it is a business card); Chase also holds my mortgage.
Your may be able to settle for roughly 6k, but your credit is going to take a hit temporarily. If this is the only account you are struggling with I would probably avoid chapter 7 if it were me, but if you add in the other 10k balance, it could be worth wiping out both balances.
Awesome video! I have 8 accounts in collections most of which are at least 5-6 years old. I am at a point in my life where I am ready to get rid of all of this old debt I acquired by during a dumb 20 year old.
The 2 biggest were both bought by midland and both credit cards, one in 2012 and one in 2014. I do not know the original dates, but I want to say both cards were closed some time in 2010. $3400 and $1200.
There is also another $1100 from EOS CCA for an old directv bill also from 2011.
Will I have better luck resolving bad debts simultaneously through midland? What kind of percentage can I expect? I am in the state of Maine so I think I am past all SOL.
My experiences settling with Midland Funding are often around 40%, even with the older stuff.
Thanks for video.
Im in a dire situation now with my financial future. I have a few credit cards that i owe. walmart..8k..discover 1k ..chevron mastercard 8k..paypal 7k.. Last week i got bad news from my doctor that will cause me to stop working and i can never work again. im filing for disability next week. Im current on all my payments as of now but i know whats coming. Can you lead me in the right direction with some advice.thanks.. I live in alabama
Read this review of debt relief options first. Knowing what your finances will be in the coming months, which makes the most sense to you given the circumstances?
My bills were based on my working income..no way disability will work.. I know snowballing method will not work in my situation. I have been reading here about settlement but i might not can afford the 50% the companies shoot for when you settle. Where can i start with this?
That suggest that you look at filing chapter 7 bankruptcy. You could be in and out in 90 days and for as little as $1500.
Barclays sold debt to MCM Midland credit. 3100 offered 800 now 1000 all i have. I called them and the debt is 4 yrs old. I pay 25_month rest of life. tryig be polire he is to. hopefully it will go away. video good thank you
What state do you live in? If the SOL to legitimately sue has passed you are in better shape to negotiate a payoff you can afford. If you are not, it is often not a good idea to sit back and hope it goes away. If you need help settling with Midland Funding let me know.
Hi there,
I own a house with an individual that apparently has a judgement against him for credit card debt. I am not married to this person and would like to sell the house and move on but there is lien on the property. When doing the math, after paying real estate commission, his half of the sells proceeds can only cover about 40% the lien amount. how does he negotiate with the lien holders? What are the options? just an innocent victim..
Who is owed the money and how much? When was the judgment entered into the court?
Hey Michael, credit card debt that was sold to a collection agency. As for the judgement date, it was earlier this year. Total a amount is about 32000.
Thank you!
It matters who the owner of the debt, or plaintiff in the lawsuit is. If you do not want to post it in the comments, fill out the talk to Michael form in the right column and we can exchange emails.
Hi Michael,
I currently have a judgement of $20,960. I went to pay a traffic ticket only to find out that I have a judgment against me from an accident that happened in 2008. This was rather shocking because I did not receive any notices to appear in court. But, nonetheless, what should I do. I would like to resolve this issue but a little worried that the settlement offer may not be affordable.
Judgment debts are a bit more nuanced to negotiate. Call in for a consult if you like, at 800-939-8357, I am at ext 2. You can also fill out the talke to Michael form in the right column. I will see that and email you to set up a time to talk.
explain settling debt that includes charge offs and delinquents that have been being paid for 12 months through a debt consolidation company that I make a payment to and they disburse agreed on amounts to all the charged off and delinquent accounts. Will they want to settle with me after this time especially since payments have been made to them for the past year? Will you give what percentage Citibank is at,Wells Fargo Credit card, Wells Fargo personal line of credit, and Capitol one are known to settle for?
You can still settle debts after you are in credit counseling. You typically have to stop the payments first though.
I have an article up about how your banks rank when settling with you.
I did successfully settle charged off debts that were currently being paid for the last year through credit counciling. Wells Fargo was strictly at 60% , Citibank at 30%, capital one at 35%.The worst part is finding who to talk to as that seems to be a maze.. This can definitely be done if you do your homework.
Nice job getting those settlements done. How long had you not been paying on your credit counseling debt management plan?
I was current with paying on my debt settlement plan, the key was the debts were charged off. After charge off, 1st I went into credit counciling debt payment plan, paid for one year and then I decided to settled.
hi michael, i was hospitalized for most of the last four months in and out. i am current on my mortgage, car payments, energy, etc but i did have to let some of the bigger cr cards with higher minimums go. now its a disaster. i have two BofAs totaling around 16K, one of which was only opened in Dec. Discover for 10K, citi card for about 2k, walmart aka synchrony for 2K and a medical bill for 2k that the insurance did not cover.
so, being that i am current and paying more than minimums on other cards with balances that vary from 2k to 6k, can I settle for less with the banks where the balances are super high that I’m behind on and still pay my others and will it look bad that I’m paying more than minimums on those to clear them up.
I’ve gotten lots of different answers from debt resolution companies. fresh start legals and the US enrollment group gave me varying offers of settlement and said I could leave certain cards out but just recently i contacted freedom debt relief and they want me to include everything but say one card with a low balance…bc if I don’t include the others, even though Im current and some at are a 0% and I think I will be fine. To pay them off….Freedom debt said that the other companies i include in a debt settlement will not work with me if they see I am still paying others.
Ugh. i could really use your advice on whether to contact the banks directly or not. i have received one certified letter from one bank saying it’s going to collections soon
look forward to your help. my credit has already taken quite a hit and I’ve gotten those letters of reduction of credit limit from citi, etc. but the other cards I’m paying have not sent me nasty notes yet. I’m about 4 months behind on disc, bank of am, citi and walmart. my biggest concern is not getting sued.
Good to talk with you today Susan. I look forward to your call later this week or next with updates on the rest of your research.
Good Afternoon Michael,
I have four negative marks on my credit from your experties i want your advice.
what should i do with these accounts:
Credit One Bank: Charged Off Sent to Collection amount Owed $827
Wells Fargo: About to get sent to Collections amount owed $233
Portfolio Recovery Associates: Amount owed $827- this is from CREDIT ONE
Midland Funding Corp.: Amount owed $802
I would encourage you to settle them systematically if you have the resources. How much money do you have to work with today?
Can I make a lump sum settlement with chase credit card and an upstart loan if I have never had late payments? I will be coming into some money the end of July and I am really hoping there is away to not pay all that is owed currently. Do I contact Chase for each card individually or do I lump them together?
You really can’t expect to settle when you are current with payments. Most people that try what you are suggesting with Chase will hear that settlement is not an option, or sometimes that the debt can be reduced by 10 percent only.
Call me to go over any circumstances that flat out require you to not fall behind and I can give you better feedback. You can reach me at 800-939-8357 ext 2, or fill out the “Talk to Michael” form in the right rail.
my son filled out a credit card application under my name with wellsfargo and ran 12000 bunch of charges–he had a gambling problem—they now call me and want the money–i explained the situation that he got the card and used my name—they want me to fill a police report and file fraudulent activity–i dont want my son arrested–what should i do–can i make a deal ?
How prepared are you to offer Wells Fargo the settlement amount you negotiate? Can you pay a lump sum of half the amount owed?
Hi Michael,
Just wanted to update you and get some thoughts on my progress:
Current balances:
Chase 1 $27k (Current offer from them is 65%)
Chase 2 $9.5k (Current offer from them is 65%)
BoA $31k (Current offer from them is 33%)
Synchrony $6k (Sent to collection agency after 60 days: current offer from them is 60%)
US Bank $12k (No offer yet)
All are around 110-115 days late. Do you think I could get them lower? I think BoA is pretty good. The rest I’m still hoping there’s a possibility they’ll all come down to around 30-35%.
The BofA settlement is in the area where I often advise accepting it. It is sometimes better to wait a bit before doing that, given your situation with the other banks. BofA will update your credit reports to show you settled. That is not necessarily an obstacle to your negotiating with Chase, Synchrony, or US bank, but an ideal situation would be to settle with all of them within the same 30 day window if you can pull the money together to do that.
Chase I would settle for 40% if working with the bank pre charge off. You can settle for lower than that with an outside collection agency after charge off. That would be something I purposefully target if I was stretched too thin with funds.
Synchrony often will go to 40 percent settlements as you get closer to 6 months late with them.
US bank is also likelier to get to the 40% settlement mark in a couple months. But I do see USbank getting more and more difficult to settle with prior to account charge off (6 months).
How do I negotiate a settlement before a lawsuit goes to trial?
I have been served with a lawsuit, filed an answer, and now and faced with interrogatories.
My end goal (I think) is to settle it for a percentage rather than trying to fight it and rack up legal costs in the meanwhile. The debt is mine – not disputing that – totaling around $9,000 (suit is with AMEX – law firm in FL has the case).
I might be able to afford – absolute maximum – something in the realm of $1k down and payments. I hope my financial situation changes going forward, but I really can’t count on it. Right now it’s a new job based on commission, so I can’t count on things ramping up quickly.
Question is: am I best off trying to negotiate a settlement quickly to save legal fees and how do I do this (without a lawyer – broke)?
Thank you for your help,
I have a page up dedicated to negotiating once sued for collection.
It is highly unrealistic that you will be able to settle an American Express account for that low (whether in the courts or not). You are realistically looking at half the balance owed in a situation like this,and that is not a gimme.
How long will it take you to raise the additional money you need? If you can raise it quickly enough you could continue to try and defend the collection action.
Good Afternoon. I’ve been reading all these comments and decided to post my questions/concerns and hopefully get some answers. We have some major credit card debt between me and my husband. We owe Old Navy 160, Best Buy 380, Walmart 550, Cabela’s 8000, American Express 7500, Discover 3000, PayPal Credit 3000 and Bank of America 7500. The payments are so high that sometimes I skip on paying the mortgage, utilities and skimping on groceries. Next month, we decided we can’t keep living like this and decided that we no longer will be skipping on those but unfortunately will be skipping on our credit card minimum payments. Keep in mind, on top of the credit card debt, we also have two car payments, a personal loan for 12000. This is our plan as of this Sunday: Since I don’t want to be a bad standard with BofA, I will continue making the regular payments to that credit card since that’s where I have my checking and savings account (We have no savings at all, and have two kids). I plan on skipping payments on the Cabelas, American Express, Discover and PayPal Credit. It is unfortunate but between those payments, it equals 482 every month. What I want to do for the first 3 months is pay down one credit card at a time from lowest to biggest. Meaning, Next month I will pay in full Old Navy. The following month, I will pay in full Best Buy. The third month we will pay in full the Walmart. This while giving regular minimum payments to my BofA. As of right now, we have more money going out than coming in, which is what is making us be in this position. I work full time already and my husband works full time as well and is currently going to school which is what made us be in this position also since he can’t do much overtime. What do you think of our plan? How does the settlement work and what options do you think we will have? If we settle? When do we start the process? I already skip one payment (Discover) and they’ve been calling me. Thank you very much for any help and input you provide.
What are your interest rates on all of the accounts you listed?
I would highly recommend you review my article series on negotiating in first stage collection. That links you to the intro page. Continue reading theough the series by following the links at the end of each piece.
You will also want to review the last several critical reports about settling debt.
Reading through all of that will not only answer your questions, it will answer questions you did not know to ask and prepare you for things to come.
I would also encourage you to call me for a consult. I wonder about your account selection; financing goals in the next 2 to 3 years; and the timing you will have when paying the deals you negotiate.
Man I wish I would’ve done this sooner. As of today, I believe my Amex, Paypal, and Discover are in collections since it’s been a few months. Today I receive a phone call at my work from a Lawfirm in Tucson called Guglielmo & associates. I called them back and asked them to please do not contact my work. He was polite so I stayed on the line. He then told about my options with one of my cards which is Discover. he says my total is $3330.00 and that I can settle for $2498. Is this a good settlement? Where do I go from here? How do I find out if my other accounts are in a settlement mode? I have read many sections in your website but I feel so drained! So much good information but I feel overwhelmed. I would like to put this behind me but unfortunately right now I don’t have settlement money, especially that much. I will go through my mail today and see what I have received from my other accounts. At this point, do the accounts ever to back to the creditor to discuss repayment options or will they stay in collections from now on?
You can probably negotiate a better outcome on the Discover account if you do it quickly enough (before they sue).
You can indeed work out payments or settlements with your creditors when they get the accounts back (if you time your efforts perfectly), but you may not want to. You can sometimes get better deals with the average collection agency than you can with the bank.
What are the balances on the other credit cards? Which agencies are trying to collect?
I want to negotiate a settlement with a US bank credit card what do they usually accept percentage wise? And how likely are they to sue? And I have to say thank you so much for your advice to me and everyone else on here, I’m so impressed by the wealth of information I’ve found on here!
How far behind with your US bank credit card payments are you?
I’m in the 2nd level of negotiations with Comentity Bank. I was charged off 02/18/15 with a balance of $6814. I’ve been paying some law firm that works for them $50/month for four months. I got my tax refund. It was for $1700. I offered to pay a $2000 lump sum. They countered with $3407. I said impossible. I asked if they could go any lower. They came back with $2725. I can’t pull the extra $725 together. Am I about to mess up a great deal in the end because of $725? I told them I would see if there was anything I could sell to a pawn shop since I have no family/friends available with that kind of money. I don’t think I have anything worth that much. Thoughts?
What is the name of the collection law firm that is working for Comenity Bank?
It is not that you are messing up a deal. You do not have a deal to mess up. Messing up is being able to afford to pay a negotiated settlement and not taking advantage of it. You need them to go lower in order to get this settled.
It may be possible to negotiate a lower settlement, but not always. Call me for a consult and I can learn what you have done and said so far, and likely give you some tips to progress this further. You can reach me at 800-939-8357, choose option 2.