Settling your Chase Credit Card Compared to a Hardship Repayment Plan
I am behind with payments to Chase now for 3 months. I was thinking to later settle the debt, but they are only offering to reduce payments and interest for the life of the balance if payments are made from my checking account in the same amount every month for 60 months.
Is this Chase hardship plan the right way to go, or should I hold out to settle this account?
—RB
First thing to do is consider your current and projected income. Does your budget suggest you can afford the lower Chase credit card monthly payment? Does your cash flow and monthly budget show you will be able to continue paying your Chase credit card for 5 years until the balance is paid off?
Balance liquidation plans and debt settlement are both available on a Chase credit card.
If you can swing the payment the reduced interest hardship monthly repayment plan is a good program for you. If you do enroll in the plan, be sure to inquire whether the 30-60-90 day late payment notations will be brought current on your credit report. Chase and other credit card issuers (like BofA, Citi, Discover, Capital One, HSBC) will offer what is called re-aging to account holders that participate in long term repayment plans. This is when your credit card is enrolled in an internal repayment plan, or as part of a consumer credit counseling services plan.
Re-aging is generally only done once during the lifetime of the account, and hardship plans are generally not offered again later, if you fall off of one.
These hardship repayment plans can be for 60 months and carry a lower interest rate. I have even seen zero interest rates on some credit card plans. 60 months to pay a lower monthly payment is great! Or is it?
You have to be confident you can make the now lower monthly payment on time all the time. If you miss one you typically lose the benefits of the plan, your payments go back to where they were etc. This means if you were paying for 18 months and suddenly had a random set back or expense, you are off the plan and have not resolved the Chase credit card. If this is a major concern you should compare the monthly repayment plan with a debt settlement approach.
Banks like Chase will change system wide policies for offering hardship repayment plans from time to time. One of those changes may be to stop offering long term hardship repayment plans (the 60 month lifetime of the credit card balance version), and switch to offering only the 6 and twelve month temporary hardship payments. Here is an article series covering hardship plans.
If you are looking to get your credit card monthly payment lower with not just Chase bank, but other banks like Wells Fargo, Bank of America, Capital One etc., it would be a good idea to talk to a nonprofit consumer credit counseling agency about what they can do for you. The credit counseling industry has long standing relationships with virtually all of the credit card banks like Chase and the others. An agency can sometimes get you a better interest rate reduction and lower monthly payment across all of your credit cards, rather than you just “one-offing” each account, and perhaps only being able to settle on 6 and 12 month hardship plans which can backfire on your budget when the payment and interest rate reduction expires.
Talking with a nonprofit credit counselor is free, and worth the information you will get, even if you do not go that route. You can speak with one today at 888-317-8770.
Settling Credit Card Debt with Chase or a Debt Collector
You mention you were thinking of settling your Chase credit card. What was your plan for doing so? What is the balance of the account now? How much money have you saved and what amount can you add over the next few months? Do you have additional credit card accounts that you are late with?
How much money you need to be prepared with will change depending on different factors.
If you took the money you would have paid in the lower monthly payment hardship plan and saved it up for 6, 12, or 18 months, how much would you have?
This is how many people settle their credit cards. By saving up money over a period of months. If you miss the opportunity to settle with Chase directly, after 6 months of non payment you typically will be able to settle the account with a collection agency.
In order to maximize your percentage savings in settlement and mitigate the risk Chase places the account for aggressive collection action, there are some things you need to be doing and things to avoid doing. If raising the money to settle with Chase in the first 6 months is not an option, there are different details to learn in order to be successful with your Chase credit card settlement.
I would encourage you to start reviewing my debt settlement series to get a sense of what settling credit card debt with Chase is going to look like for you.
If you would like to consult with me directly, you can call me at 800-939-8357 and press option 2, or you can submit a consult request.
Anyone reading with questions or concerns about Chase credit card hardship payment plans, or about settling Chase credit card debt instead, is welcome to post questions in the comments below for feedback.
About Michael BoveeMichael started CRN in 2004 with a mission to provide people in need with detailed debt and credit help and education. Michael has participated as an expert panelist in federal consumer protection rule making, collaborated on state law changes governing debt consolidation, has worked as an expert witness in court matters related to the debt relief industry, and is a regular contributor to several personal finance websites.
Michael, I have 2 CC’ds that I need help with. I’ve been putting money aside with Americor, but frankly, I’m not happy with their negotiation skills. It seems you can do better than 50% I have a Chase card with an original balance of $15,811 and a Pen Air Federal Credit Union CC of $2,293. I have $7,000 cash and I feel this would be enough to make a deal with both of these accounts. I haven’t been paying on these accounts for about 18 months. Please let me know if you feel you can help get me down to the 25-30% level.
-Mark
Given the age of the debts I feel pretty good about hitting your target. You can click on the get debt help tab in the upper right, or anywhere on the site, and fill in your user profile and schedule a call with me to get started.
Divorced in April 2016
Divorce was amicable, and ex agreed to pay Chase credit card which is in my name.
I just received a phone call stating my ex has not paid a dime in almost 155 days.
The account is now closed, and Chase wants to settle at 50%
Since my credit has already been damaged, should I wait and allow the debt to be charged off in order to seek a cheaper settlement with the new debt buyer?
Chase stopped selling debt in 2013, and has not kicked back up again. You will be settling with a third party collection agency Chase will send your account to after charge off. And yes, if it were me, I would wait to settle with the collection agency where a better deal can be reached.
What is the balance owed on the account?
Current balance is $14,200.
Is a charge off “worse” on my credit report, as opposed to being late?
Once you settle the account, it won’t really matter whether it was charged off or not, the end result is the same.
Done well I would settle this between 20 and 30 percent. If you need help you can start a chat with the bot on the screen. That will ask you some questions that will then come to me so I can set up a phone call with you.
I got on a plan with Chase. 0% interest and payments each month. It was at 9300.00 it is now at 3800.00 I lost my business and my husband at the time it was call after call. I did not negociate I just wanted it done. I should have negotiated the late fees and interest charges if I had done so I would owe like 2000.00 now which I can pay off is there a WAY i CAN DO THIS??? I have called the solutions line a couple times and no luck
.
I would be surprised if Chase backed out fees and interest after all this time has gone by.
And if I stop paying now what will happen? I have paid back more than 40%
If you stop making payments to Chase now they will put your account through the normal debt collection paces. You can settle your Chase account for less later on if you like.
Hi Michael
I just got a call from chase cards. I have to cards. One 112 days past due for $900 and one at 76 days past due for $4030. They said I can make them an offer for settlement for both cards but only my smaller card will be charging off the 22nd of this month. They said if you gave us 75% we could probably work with you. I know I can get this after charge off around 35-40%,so I was going to come back at them with a 30% offer but should I include both cards in the negotiations or wait until my larger balance is closer to charge off. I find it odd they are charging off so soon and not waiting closer to 180 days.
I heard a rumor a couple years ago that Chase was going to start charging off credit card debts 60 to 90 days earlier than usual. I saw them do it a few times, but not across the board. It would not surprise me if they charged off your credit cards early.
I would not settle right now. The settlements you can negotiate with Chase today are not optimal. You can get to as low as 20% with some of the debt collection agencies they send accounts to. I would wait.
Thank you I will wait. Can I expect to get that low even on my small balance of $900? Most everything I have read has leaned towards lower balances not accepting less than 40% settlements.
They keep trying me to make a small payment to prevent charge off for a month and also to make multiple payments against a 65% settlement over a few months. I continue to tell them I only have a lump sum and can’t make payments .
I generally see small balance accounts settle for more on a percentage basis. I also see exceptions.
Hello. Thanks for all of your information. I currently have 3 chase CC’s totaling about 23K. I have always made my payments on time. I have paid off the CC a few different times over the past 5 years and have run into a wall now. All three are maxed out and just making the minimum payments with interest rates around 16%. I would like to get this paid off through settlement. The best approach is to I assume just stop paying. Is it possible to call Chase and say I have run into a hardship and cannot make my payments any longer. I would like to settle at 40% of my current balance. Telling them I have talked with a credit counselor and BK lawyer. What are the odds that would work vs. just stop paying and ignore them for a few months?
The odds are zero. You cannot get a good settlement from Chase with out becoming the statistic they treat a certain way. That means many months of payment default.
I closed my business last month, I have a Chase line of credit with a current balance of 80k with a personal grantee.  What can I do to settle this at a lower amount? The business is closed but I don’t want my assets garnished or my credit score tarnished.
You typically have to stop paying in order to settle for less. With Chase, you will often get the best bank for your settlement dollar by being late 6 or more months. That can impact your credit score in a very meaningful way. If your credit score is more important than resolving the debt you will not want to settle.
Chase is not suing currently, and they would have to sue and get a judgment before your assets were at risk.
Hi I have a 14.500 credit card bill with chase I have never been late but I can not get this bill down I have very good credit I do not won’t to file bankruptcy is there a way to negotiate this bill down and close the account
You can settle the balance for less with Chase, but that is typically going to mean falling several months late with payments. That means your credit scores will be hit for a while. Is that something you are okay with?
Sorry i need to add that in 3 months i willhave 6,000 should that be offered as a settlement. They said they will be reporting every month to the credi bureau the status.
How long until you have 3k?
I have a charge off with chase freedom cc after 125 days of being late. They sent me to their recovery department. Total is 12,000. I was on their repayment plan to catch up got sick and was not working for 2 months. They offered me a settlement of 9888 and wanted 549 a month. Could i negotiation a smaller pay out. They did say it was still early charge off just happen on Jan 4, 2017.
Fill out the talk to Michael form in the right column Roxana. I will email you to set up a time to connect on the phone. Done correctly you can see as low as $3,000 (ish) on that settlement.
Hi Michael….
I have an account with Chase for approximately $25000. Most of this debt was incurred by my ex-fiance who refuses to pay me back what he owes me. Because of him I am in financial ruin and my credit score has gone from 820 to 495. I have not made a payment to Chase in over a year. I joined a debt relief firm that promised me they could negotiate the debt down on my behalf but they have made no progress on this in the past year. I am considering canceling my program with them and trying to settle with Chase on my own. I recently lost my job and was diagnosed with cancer. I have no savings with which I can pay them now. I am wondering if settlement agreements are ever allowed to be paid out in monthly installments or if they always require a lump sum all at once? I desperately need to find a way to resolve this so I can get out of debt.
I also owe $7000 to Discover but I have a hardship agreement with them to repay the amount over 5 years at 0.99% with a monthly payment of $143.
Any advice you can provide would be much appreciated.
How much have you got saved up with that debt relief firm right now?
Have you received any collection notices from anyone other than Chase, and if so, what is the collection agency name?
Assume for a moment you were able to settle with Chase for 8k. How long does that take to come up with?
Add the 8k to settle Chase, and the 7k-ish total you will be paying over time to Discover. Would you consider filing chapter 7 bankruptcy if you could knock that 15k down to 2k?
I would like to settle my chase debt that is several years old. it went to two different credit card collection agencies and when I tried to settle with the last just a few days ago, they no longer had it. Its about $7,000 and hasnt been paid since about May of 2013. I called the phone number they provided and it was not an active #. Next steps?
Contact Chase and find out if they have it warehoused or out with another debt collection agency. You can negotiate the settlement directly with Chase if they have it internally, or settle with the collection agency once you learn who it is.
How much are you prepared to pay to resolve the 7k balance?
they were offering 1200 in 3 payments. I should have taken it then.
I am not confident you will be able to settle it for that low anymore if Chase warehoused it. I see them hold steady at 40% in some of these cases.
Hi Michel hope you had a nice thanksgiving. I recently got a letter from chase on two cards stating: if you stop paying on the balance liquidation program the account will be written off as bad debt and reported to the credit reporting agencies as “charged off”. We may have other solutions available to you. If your financial situation extends beyond your account with us and you need a more comprehensive financial solution we can help connect you to a credit counseling agency . I have missed two payments and want it to be charged off so it goes to a collection agency at that time I will try to negotiate 30%. Is this a true statement? Or should I call Chase and try to negotiate now based on the letter?
If it were me, and my goal was to negotiate a settlement on my 2 Chase accounts, I would not respond to the letter. I would be waiting for my opportunity to settle for the best savings, which right now, is with a third party agency after charge off for most of us.
Michael, I am a single woman, 75 years old living on social security benefits of $1074 monthly. I have not been employed for several years and do not receive any other retirement benefits. Since being diagnosed with Non Hodgkin’s Lymphoma two years ago I have been living with my son and his family. I have an older RV that I hope to live in part time soon.
My assets are: 2006 Travel Trailer. Value around $6000.
2007 Honda CRV. 168,000 mileage. $5,000 to $6,000 Value
Savings acct – $15,000
Checking acct – $1,200
I owe Chase Credt Card $9,000. Original amount was about $23,000. I have been paying the minimum each month now for many years. I am never late with the payment and overall have very good credit but I can no longer continue to pay this monthly payment. I have been thinking I could just stop making the payment as I have no real assets or offer to settle with them for a one time payment of $1800 (20% of debt). What would you recommend I do? I might mention that this money was used to help a family member. They were going to pay it initially but have been unable to do so.
Your input would be greatly appreciated.