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
Short answer
The Chase hardship plan is the right choice only if you are confident you can make a payment of roughly two percent of today’s balance, on time, every month, for up to five years. If your income is unpredictable, compare it against settling, because missing a single payment usually ends the plan.
Key points on this page
- Chase hardship repayment plans can be temporary, or run as long as 60 months, at a reduced interest rate the whole time. Chase mostly offers between zero and 10 percent.
- Miss one payment and you typically lose the benefits of the plan and go back to the old payment, even 18 months in.
- If Chase will not approve a long term plan, a nonprofit credit counseling agency can often get a better rate reduction and a lower payment across all of your cards at once. Talking with one is free.
- Many people fund a settlement by saving up the money they would have put into a lower monthly payment over 6, 12 or 18 months.
- Chase typically charges off an unsecured debt after 120 or 180 days of nonpayment, then places it with a collection agency or a collection law firm. Chase stopped selling unpaid accounts to debt buyers in 2013.
- You are far better off settling with Chase directly, or with a collection agency working for the bank. The worst settlements tend to come from attorneys collecting for Chase.
First thing to do is consider your current and projected income. Does your budget suggest you can afford a lower Chase credit card monthly payment if the amount was roughly two percent of today’s balance? Are you confident you could keep up that same payment to Chase for 5 years until the balance is paid off?
If you can swing the new lower payment to Chase with confidence, the reduced interest hardship repayment plan is a good program for you.
These hardship repayment plans can be temporary or last for as long as 60 months and carry a lower interest rate the whole time. How low of a hardship plan interest rate will Chase approve? It depends. I mostly see Chase offer between zero and 10 percent interest. This is in line with many major banks hardship repayment plans.
Up to 60 months to make a lower monthly payment is great! Or is it?
You have to be confident you can make the lower monthly payment on time all the time. If you miss one you typically lose the benefits of the plan, and your payments go back to where they were. This means if you were paying for 18 months and suddenly had a random set back or expense causing you to miss a hardship payment to Chase, they could kick you off the plan. If your income is unpredictable, this could be a major concern for you and you may want to compare the monthly repayment plan with a debt settlement approach to your Chase account.
What happens if Chase will not approve you for a lower interest rate?
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.
There could also just be something particular about your account where it will not qualify for long term hardship payments offered to you direct from Chase.
Here is a work around.
If you are looking to get your credit card monthly payment lower with not just Chase, 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. 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.
Chase and different debt collectors.
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 of late payments is not an option, there are different details to learn in order to be successful with your Chase credit card settlement.
Chase will typically charge off an unsecured debt, such as a credit card, personal, or business loan, after 120 or 180 days of nonpayment. Once charged off, Chase could send your account to a typical collection agency, or to a collection law firm.
While Chase has sold unpaid accounts to debt buyers historically speaking, they stopped doing that in 2013.
I consider it an imperative to watch this updated video of mine that covers how much has changed when settling with Chase bank.
You are far better off settling with Chase or a collection agency for the bank. The worst settlements tend to come from attorneys collecting for Chase. This is what I mainly want to help people avoid.
I would encourage you to schedule a consult with me directly, you can call me at 800-939-8357 and press option 2, or you can submit a consult request. I will review your projected cash flow and help you better identify how and when to settle with Chase successfully.
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. He is available to speak with you about your financial struggle and helps people resolve their debt problems daily.
I have 4 credit card companies that I’m trying to apply your advise to when attempting settlement for less than the balance. Chase has kept me on the phone more than an hour twice talking to me about “options” and then encouraged me to call a non-profit CCC. I did that. Stayed on the phone with him for an hour and he said it looked like I didn’t have the ability to pay my bills. So, I called Chase back and they wanted to walk me though the same hour long phone call template before they would discuss any options. How do I get to someone with the authority to simply give consideration to a settlement amount that I can pay?
I owe $7800 and a family member is willing to pay it for me but only have about 5,000 to give but would do that. But I cannot get to anyone that will let me talk about it and not go though the hand holding process. I appreciate their help concern but I know what I can do. I’m very frustrated.
Help? What am I doing wrong. I’m 2 1/2 months behind in payments.
You are too early to get a settlement, or anything like a decent one. You want your account to be in the lap of a Chase recovery department employee, and you often want to be between 150 and 180 days of delinquency before settling up your settlements. There are exceptions to this time line, but are either account specific, or broadly economic related (such as the recent recession and record high credit card defaults).
Said another way… you have to be patient.
Read through the section of our online guide dealing with pre-charge off settlements and you will be better prepared for the what to’s and when to’s. Jump ahead to this page: https://consumerrecoverynetwork.com/settling-credit-card-debt-is-a-race/
Hi Michael,
I have 9 cards I want to try and settle with. 2 are with Chase, 2 with Citi, 2 with Capital One. The rest are Discover, Walmart, and Elan. All these total about 20,000. My cards are currently all up to date, I have not stopped payments yet. I plan to take a loan out of a Federal Credit Union for $10,000 (if it is granted) to pay off my cards in lump sum, provided I can get them all to settle low enough. I would like to keep one card for emergencies however, and if there were one card to keep open and pay on which would you recommend?
It is best to keep an account open that you want to continue to use later, and that also has a zero balance owed on it currently, or that has a low enough balance for you to pay down to zero balance a few months before any of your settlements would occur. If that does not narrow your choices to just one credit card to keep, it is better to keep an account that has been open the longest.
Be sure to review these two critical reports about the topic:
https://consumerrecoverynetwork.com/credit-card-debt-to-include-in-settlement-plan/
https://consumerrecoverynetwork.com/keep-credit-card-open-when-settling-debt/
Which is a better end result on your credit report, a short sale or a deed in lieu of foreclosure? Is it true that within two years after deed in lieu you can apply and possibly secure a mortgage loan? We were told that it only stays on report for two years as opposed to a short sale that supposedly stays on the credit report from seven to ten years.
Currently, short sales could prevent you from passing some underwriting standards for a new home loan for 3 years. This was a 2 year timeline, then a 3 year timeline, and I would not be surprised if it was reduced again. But I would not expect it to go more than three years.
A short sale may stay on your credit report for 7 years, but that does not mean it prevents you from having access to certain types of financing for that full amount of time. Read this basic outline about credit reporting and unpaid debt: https://consumerrecoverynetwork.com/credit-report-score-rating-debt-relief-programs/
Have been trying to settle two accounts thru meyer and njus. One is target, (TD bank), the other is jcp,(GE Capital Retail Bank, now Synchrony). Literally cannot afford more than 30%. They started off at 50% then went up to 75%. Now at 60%. They have had the accounts since 4/28/14. Charged off with OC in April/2014. Have been categorized by many other accounts that we have settled with as a permanent hardship because of our situation. Also settled two other accounts with GE Capital Retail Bank at 20%. Anyone have any info on percentages of settlements thru this firm representing these creditors? Trying desperately to avoid bankruptcy. Your thoughts?
I am skeptical that you will get Target to 30%. Target/TD Bank rarely approves that amount of reduction. You were fortunate to have gotten 20% settlement deals negotiated on those other two GE Capital accounts. The targets tend to be closer to 40% on those, so lower than where you are at now, but not where you need to be. And when you add the fact that you are dealing with collection attorneys at Meyer and Njus, you may not get the deals you need.
What are your current hardships in brief?
What are the amounts owed on these accounts?
What is the total of all of your debts?
Thanks Michael !! I am so glad I found this website. I marginally increased my offer to 22% . They declined but did come back with a settlement offer of 35% split into 4 payments not to exceed 90 days. Even at 35% it is a lot of money but I am not sure that it will get any better. I had them put the offer in the notes so I can call back and accept it if necessary. The other options are to pay the minimum amount (roughly 2%) and “buy” another 30 days to negotiate or let it charge off and deal with the credit collection agency they appoint. Another consideration is how annoying a collection company likely will be to deal with. What do you think ? Should I accept the 35% offer or maybe hold out another day and counter at 28 or 30%. I would think Chase would prefer to settle rather than let it charge off . So strange that BofA gladly took 20% right before Charge Off but not Chase. Like you said probably because of success through collection
Each bank can be a bit different. 35% is a much more common settlement than the 20%-ers,even with BofA. If you can afford to take the 35% now, it may be worth the time and frustration savings if the account is sold. And you may actually be saving an extra 5% compared to a collector who gets the account (though some settle for less than 35 percent as you suggest).
There is little benefit to making one payment to stave off the charge off and collection placement unless you are doing it to buy the extra time to settle in full.
I have been trying to settle a credit card with Chase. It will charge off in 4 days. The last 3 times I have spoken to them in consecutive weeks they give me this big song and dance about settling and then after being on the phone for about 30 minutes they tell me its not eligible or the settlement offer was declined. I am running out of time and I can’t believe they won’t settle for 20 cents on the dollar. Do you think they will ultimately settle or let it charge off ??
At four days before charge off, and being told that your account is not eligible for settlement, I am not confident you will get this deal done with Chase. That is okay, as Chase credit cards are currently seeing better settlements with debt collection companies, than when dealing directly with Chase.
Why is it you are thinking they will settle at 20 percent?
Thanks , I appreciate the feedback. I didn’t necessarily think they would accept 20% but I would have expected them to come back with something that would be more palatable to them. My understanding is that if the account charges off then Chase will sell this debt for less than 10 cents on the dollar to a third party. Should I go back and offer them a higher amount albeit one that I can afford. So far all of the creditors seem willing to allow settlement in 4 equal payments not to exceed 90 days. This is the second card I am settling. B of A settled easily for around 20% but Chase has been quite a challenge. I guess that I can deal with the debt collector if necessary but I had heard that they are more difficult to deal with and it will end up costing me more
Chase does not sell all of their defaulted credit card accounts right at charge off. Far from it. In fact, you would have a tougher time settling with the debt buyer than you would a contingency debt collector. You could up the amount you are offering Chase. I would not go higher than 40% if it were me. If you cannot get there, your account may just be flagged for some reason (there are some reasons why creditors opt to not settle accounts), and you then play your hand with the debt collector that gets the account.
Michael, thanks for all the info!
– What number at Chase I should call to try to workout a hardship repayment plan? I am current with my minimum payments, but probably won’t be the next month unless something changes.
– Is there a magic ratio of monthly income/monthly expenses (including settlement monthly payment) to qualify for zero interest for 60 months? I am afraid that they might say that my income is not enough to justify this option, or that is too high to qualify me the best option/zero interest.
Thanks!
Call the number you normally do for customer service that you find on the back of your Chase credit card, or on your monthly billing statements or emails.
Every bank does have there own metrics for deciding which hardship plan you qualify for (interest rate reductions), if any. And there are banks that start ans stop offering the 60month repayment plans. The magic number from Chase is probably somewhere in the vicinity of 200 dollars of discretionary income left over each month after all essentials and other bills are met. If you fall short in their monthly budget analysis you can sometimes over come suitability objections if you have a family member that has agreed to help you with some supplemental income/loan/gift.
…I DID IT! 60 months no interest! very, very pleasant and helpful Chase rep …I couldn’t believe. Now I have to do the same thing with BofA; any advice on dealing with BofA? is there a separate blog?
Thanks Michael and thanks Chase!!!
Nice job accomplishing your goal Alan!
The process for trying to qualify for the 60 month repayment plan with BOA is virtually identical to what you did with Chase. Call and go over your hardship and financials. You may or may not qualify for zero interest with BOA, but having gotten Chase to 0% suggests you would have a good shot at zero, or at least a much lower interest on your other card.
Last I knew, BofA did not allow as much discretionary income as Chase (money left over after all monthly bills and expenses are accounted for). Post an update about your results on the hardship plan page: https://consumerrecoverynetwork.com/hardship-payment-plans/ – or in reply on this page.
Good luck!
I did not click on the notify me of comments via email, so I am posting again. Thanks!
I also got your reader question submission earlier, and sent you an email to the hardship payment plan resource pages on the site.
Michael,
I currently have about $25K debt on a Chase Disney card. Recently divorced, etc. I am struggling to make my payments, but can’t let it interfere with my mortgage. I am current on payments, but only making the minimum required. I do not have a lump sum to try to make a settlement. The interest every month is killing me, making minimum monthly payments will keep me in this debt forever. What do you suggest?
Can you afford to pay roughly 525 a month to your Chase Disney card?
Do you have other unsecured debts you are paying? If so, what are the totals on those cards?
I’m asking a question on behalf of my mother. She currently has about 18000.00 in credit card debt. She She is current on her payments and other bills too. But no savings. At this time she still works a full time job and receives social security benefits. Mom is 78 and we don’t expect her to keep working too much longer. She’ll be running about 700 short at that time. We calculated she pay around 1800.00 in payments to credit cards each month. The balances range from lowest 160.00 to the highest at 3200.00 My question is this should she try to negotiate a settlement to pay off one card each month while making the minimum payment on the others ? If so should she do the negotiating or hire a service to do it?, Well thanks in advance for your insight and advice,
sincerely,Terry
It sounds like the interest rates she is paying on some, or all of her credit cards, are way too high. Paying 1800 dollars a month on 18k of total balances suggests something isn’t right to me.
If your mom can afford to pay about 370.00 a month on these bills, call 888-317-8770 for a free consult with a credit counselor and get an exact monthly payment quote.
Post an update with the result of that consult if necessary, and if the lower monthly payment plan is not feasible, I can offer more feedback on the settlement option .
Hi Michael,
Finding you has given me some hope. My situation: I am in DEEP debt – approx 62k. I lost my well-paying job in 2010 due to disability and am currently collecting SSDI ($1900/mo).
I met with an attorney for a bankruptcy consultation this past Friday and while I am considering this option, I’m also considering the strategies you have posted on.
I rec’d a settlement offer from Chase yesterday for THREE cards as follows:
$8792 > $5980; $6281 > $4272; and, $12822 > $8720 (68%).
I cannot afford $18,972, so I wanted your opinion on whether they will settle for less? I have a lump sum of $9,700 (roughly 35% of what I owe) BUT, I have add’l CC debt w/Capital One (2 mos. behind), Discover (1 mo.) and BofA (2 cards on which I cannot make pmt this month). Any advice would be appreciated. Thank you.
Denise – How far behind on payments to your Chase credit cards are you? If you use all available funds you have now to settle the Chase debts, how much will you be saving up each month to settle the other debts over time? What are the balances owed on your other accounts?
The 3 Chase Cards were last paid in Oct 2013.
I’ll be able to save $1,700/mo by not paying my mortgage (attorney advised it would take approx 2 yrs to foreclose here in NJ) – the “kicker” is that my fiance & I own a house in FL, which is rented — we want to keep it… we are moving there in 3 yrs (son graduates HS)
The other balances are:
Capital One – $7,355 (2 mos. behind),
Discover – $6,694 (1 mo.behind)
BofA – $7,896 and $13,577 (due end of May)
The attorney advised that since there is approx 140k equity in FL, the court will force a sale. The FL mortgage is in my fiance’s name, but the deed is in both names. The house in NJ is only in my name, approx 20k equity…
I forgot to add that my tentative plan is to save the $1,700/mo from not paying the NJ mortgage plus an add’l $300/mo; and use it to pay-off the other cards at reduced rates. I’m figuring that in 6 mos I’ll have 10k saved – does this make sense?
My estimate is needing roughly 10k to settle the 3 Chase credit card debts. That figure is based on the accounts being and the early part of second stage collections, or about to enter stage 2 (where debt collection agencies working for Chase call and write to you).
I estimate needing about 7500 to settle with Capital One and Discover in the next 4 months.
I estimate settling the two Bank of America credit cards for between 8 and 9 k in about 6 months.
So far, given the information you have shared, I like your odds of settling all the debts and avoiding more complicated solutions.
Michael,
I’ve now read the entire “debt settling course” offered here plus many other posts re specific CC Co.’s & I have some ques (I’m repeating details to make it easier for you) My situation/plan has changed. First, my BF (fiance) made the mo. pmts on Disc & the 2 BofA accts in May (to buy me more time?) after I explained the “settling options”.
Right now I have 3 Chase cards last pmt 12/2013 ($27,897); Cap One last pmt 3/2014 ($7,355); & Wells Fargo last pmt 4/2014 ($1,200).
My BF does not want to foreclose our home as he’s been paying mtg for 4 yrs – Equity appx. 45k (My plan was to use the mtg $) Plus we SHARE ownership of house in FL which we want to keep (Equity appx. 148k).
I have $9,700 saved plus mo. DI of $1,900 (ex. for next 4 mos. its $1,450 due to payback of an over-payment) and net Rental Income $575. In 6 mos I’ll have $15,133 saved, assuming Chase will settle for $9,700. The other issue is the TAXES on the settled debt – considering the Equity I have (I just removed my name from the Deed & the mtg is in HIS name only) I’m kinda desperate for help as I’m so afraid my fiance is going to walk-out and I can’t say I blame him. I would truly appreciate your help as I think I’m stretched way too tight to afford prof. help.
Based on your comments and circumstances I would encourage you to talk with one of the specialists I refer to on the site. You can get through this and negotiate settlements on your own, but with the one on one guidance of a professional. Fill in the little form to the right in the side bar. I will receive that and forward it to Steve or Paul for them to schedule a consultation with you.
Additionally, won’t that result in paying taxes on the amounts forgiven?
Even if through Sherman?
Yes and no. Settling your old Chase account with LVNV, if you save more than 600 dollars, can result in a 1099c being sent to you and the IRS. Whether you owe income taxes on the amount you saved will depend on whether you are technically insolvent. Many people I work with over the years do not end up owing taxes. You can learn more about this issue here: https://consumerrecoverynetwork.com/debt-forgiveness-taxes-settled-credit-card/
Thank you.
I checked and the last payment was no later than Dec., 2009.
Today I received a voicemail with the same phone # — this time they identified themselves as Vetnrue (?). It was hard to understand. Not a real person.
The last dollar amount owed was $7,200. Yet on my credit report it says $11,000.
My concern is, if I settle for let’s say $5,000, I will still have to pay taxes on the forgiven amount which would be $6,000.
That would be Van Rue, and established debt collection agency.
You could actually end up with a 1099c filed for the whole balance, even when not settling. The number they report will be the one that you work with via tax computations. Talk with a tax pro about the implications here for you.
The thing about this credit card debt having gone unpaid since 2009… it is typically considered to be beyond the SOL of 4 years to legitimately sue you for collections. This will put you in a better bargaining position, if you proceed to settle this account.
I appreciate your input.
… So, how does LVNV – Sherman turn into Van Rue?
And, I have never received a “letter” they said they sent me
Already they don’t seem trustworthy.
LVNV Funding is a large debt buyer, but does not necessarily do their own internal collections. They consistently place accounts they buy out for collections from other companies. That is why Van Rue is involved. You can negotiate the deal with them, get it documented, and then pay, if that is the route you want to take. If you have any concerns about who is legitimately collecting, you can contact the debt owner and confirm that over the phone too.
I received a voicemail today from a debt collector.
I looked at my credit report and found that my Chase account is in collections with LNV Funding.
I am just beginning to get my head above water from financial woos that happened 4 years ago.
The voicemail did not say “who” they were nor the debt they were trying to recover, only that they sent me a letter (which I have not received) and I needed to call them back.
Everything I have read about LNV is not positive… even a possibility that paying them will not clear the debt nor make them go away.
How should I handle this?
LVNV is not hard to deal with.
What state do you live in?
Do you recall the precise month and year you last made a payment on this Chase credit card?
What is your goal with this account?
Do you have other debts out that that have gone unpaid for as long, or less time? If so, how many, and what are the balances?
I live in Nebraska.
Originally debt was $9,000 now it is $11,000.
I will have to check but I believe I last made payment in 2010, however my credit report says
Jan., 2011.
I would like to pay it, but it would have to be over a period of time – I do not have $11,000 to pay at once.
Discover – $4,000
Walmart – $1,500
Capitol One – $5,000
I have not heard a word from anyone for about 4 years.
At which time, I paid 4 accounts via settlements.
I don’t even know how to contact these accounts … don’t know if the debts have been sold
or not. How do I know?
When you last paid is going to be important at this point. If for example, you last paid your Chase credit card that LVNV Funding is now trying to collect from you, in February of 2010, the SOL for them to legitimately sue you in court to collect has passed. You can still negotiate a settlement with LVNV, but you would be in a better position to do that with that leverage removed.
That same thing would apply to negotiating a reduced payoff amount with all of your creditors. If those debts are all passed the SOL, I would target 40% or less in your negotiations to settle all of them. And if you are not concerned about your credit score, or how your credit reports are viewed, you could manage your way through collection calls and notices for the next 3 to 4 years, and not settle with debt collectors (if the SOL is passed for all of them).
If you confirm through bank records that your last payments were in fact in 2011, you could be at high risk of being sued from now until the 4 year SOL expires.
Verify when you last paid and post an update.
Chase did sell your account to LVNV Funding, or Sherman Acquisitions (same family of companies). As for whether the others have been sold, what are the names of any debt collection companies appearing on your credit reports, including ones who have made inquiries?
No other names appear on my credit report for those accounts.
First, I will check to see ‘when’ a last payment was made to them.
If it were in 2011, and I return their call, what can I expect?
Use some of the tips and timing when negotiating with debt collectors in this article: https://consumerrecoverynetwork.com/question/settling-charged-off-credit-card-debts-with-collection-company/ and in this video: https://www.youtube.com/watch?v=NpuAUvjtzKo
We had a $20,000 balance with Chase and got into a 60 month hardship payment plan at 0% interest. We paid each month faithfully – it was automatically taken from our checking account. Last summer we paid the remaining balance. (Keep in mind – we did not have them settle, as far as knocking off any of the balance, only lowering our interest rate and monthly payment). Now that they have the $20,000 we paid, I looked at our credit report and it says we missed 39 payments. I called Chase and they were no help. Seems that if my credit was going to be ruined anyway – why bother paying them all the money back. They are very difficult to deal with and this just doesn’t seem right. Paid it all back and got screwed in the end anyway. My husband says he can sleep better knowing that we paid it all off on our own – I do not share the same opinion!
Tina – Can you tell the impacts of how Chase is showing the late pays to your credit score? Was this the only account that got the hardship treatment? Was there an reference to Chase agreeing to reage your account way back when you set up the payment plan?
Hello Michael,
i have 2 chase credit cards :
1)Chase Slate – Current balance is $4,732.34 [i use it over a year]
2)Chase Disney – current balance is $5,287.07 [is a new card and is not eligible for a settlement ]
and i am about 3 months late. I closed both accounts 2 months ago. I spoke 4-5 times already with Chase representatives and explained them that i am going through hardship: t my husband is a bipolar and during the manic state he bought lots of things on my credit cards for almost 10,000 dollars. After that he was admitted to a mental ward. Later my financials situation even got worse: the place where we lived was on fire. So Chase offered me a hardship payment plan and we were discussing the amount of $100 for both cards. BUT i can’t enroll the plan until i have a steady income. I currently do not work. I am a full time student. Both cards are on my name. My husband gets SSDi = $744.
Michael, how low can i go with the monthly payment? Can i go lower than $100?
Can i use my husband’s money for monthly payments?
Do i have any other options?
Thank you, Natasha
Natasha – The lowest you can get on these repayment plans, at least that are long term, is about 1.7% of the balances as a monthly payment. Here that would mean 170 a month. Anything you talk about with Chase for 100 a month that is covering both cards would either:
Not be long term, so maybe lasting 3 to 6 months or so.
Part of a new pilot program they are testing (this kind of thing happens from creditor to creditor).
If the household income is 744.00 a month (is that correct), I would not spend any money on the Chase credit cards. You can navigate this debt with debt collectors down the road, and if the collections escalate to being sued in order to get paid before you can put a plan together (negotiate settlements), you have options to consider then too.
If it were me, I would stand pat (pay nothing) unless your income is more than what is suggested in your comment above. Pay nothing until you have more to work with, even if that means dealing with collectors etc.
Michael,
I have never missed a payment of any type, and am 33 years old. I got a job promotion and salary raise, which lead me to apply for new credit based on my salary and made some expenditures after doing so. I was fired shortly after and had no salary for 6 months before getting a new position at a much lower rate of pay. My balances are not “big” in the general sense, but they’re big to me in comparison with my salary.
Basically, I’m making headway on my other cards, but the Chase card with a $10,000 balance increases in debt even after my minimum payments.
My question is if I call Chase and try to workout a hardship plan such as the 0% interest for 60 months, and I pay it off (let’s say I pay it off in 18 months), will they let me keep the account usually or is the card gone the minute I accept a plan to pay it. It is my only good limit card, and I’d like to keep it moving forward.
Dan – The most realistic expectation is that accounts enrolled into long term hardship payment plans (more than the 6 to 12 month variety) will be closed. I do know of a couple of instances where banks did not close self enrolled accounts into 60 month plans – that were not already delinquent 30/60 days – but it has been a while.
You can call Chase and ask about that, but be aware that you are telegraphing to them that you are an increased credit risk when you do that. So, even if you decide not to try for any hardship or payment adjustments, you could still see your credit limit decreased. Make that call when you are confident of the path you are going to take.
Hi i have 2 chase cc i would like to settle and ,also ,i have two checking accounts with Chase. what do i do/ Is that going to affect my mortgage /i have that with Chase/ thank you
marina – I have never seen a situation (out of many thousands) where settling credit cards with Chase has any impact on your mortgage. Chase may only be the services of your mortgage. Just keep payments up.
What you will have a problem with, in my experience, is the checking accounts with Chase. What are the rough balances on the Chase credit cards? How many months late are you with paying?
Hi,
I am about 4 months late on payments to Chase. I currently have a balance of approximately 22,000. Each time I have requested a settlement I am told that my account was not eligible at this time for a settlement, Earlier this week when I was again turned down for a settlement, I accepted a payment plan with a lower monthly payment and 0% interest. It was made clear that if I fulfill my side of the plan, I would not be able to enroll in any future plan, but it wasn’t clear whether that also precluded settlement in the future. My financial situation has changed dramatically in the few days since I accepted the plan. There is no way now that I will be able to pay the $337 a month I agreed to pay monthly. I should be able to borrow some money down the line or get a better paying jobs, get roommates etc., but I am concerned that between the interest rate and penalties, if I am not able to settle because I breached this agreement, I will be in a very bad situation. I don’t want to ask Chase because I’m sure they will tell me that settlement in the future was forfeited when I entered into the payment plan, leaving me no choice but to try to come up with money, but I very much doubt that I will be able to make more than a couple of payments. She did mention that after a while (12 months???) after I have payed down my principle, I may be able to settle, but it was an off hand remark. Any advice on my situation?
Thanks, Lucy
Lucy – Generally speaking, consistently calling into a bank like Chase and bringing up settlement, before the optimal time they trend with offering to settle (after the 5th month of missed payments usually), can result in what you described their responses to be.
It sounds like Chase offered you their best hardship repayment plan (zero interest for 60 months). Banks like Chase do have some latitude in offering other repayment options, but they have regulators that set policy too. Some of that policy includes limiting repayment plans like you were offered.
Settling with Chase is different than the payment plans and hardship programs. Once Chase charges off the credit card debt, all settlement options will likely be on the table, in my experience to date.
You can only do what you can do. If you cannot meet the payment commitment now, or lack confidence you would be able to in the near future, its not a good option to pursue. The opportunity to settle will come, or you may need to consider alternatives if your situation doe not improve. Are there other unsecured debts that this one?
I am trying to settle the debt I have with Chase Bank and the balance is 14.000.00. Chase has placed the debt with a collection company called Management Services Incorporated.
I am trying to contact them and see if i can reach a settlement. I have called them a couple of times and left a messege but I never got a call back. I can offer them a settlement of 30 % at this time and I am able to pay them in a lump sum payment. However, the other day I received form 1099C, Cancelation of Debt from Chase. I am confused because I thought that I can only get a 1099C on the debt that has been forgiven, but as I mentioned above I haven’t even been able to get in touch with them. I don’t know what to do because I am planning to file taxes pretty soon and I don’t know if I have to file 1099C for this debt. I am really confused right now. Does this happen or is this a mistake on their part?
Also, I managed to settle three of my credit cards late last year, but i have not received 1099C for neither one of them. Should I contact them and ask for it or should I just wait?
Thank you,
Adie
Hi Michael,
I lately settled with three of my credit cards. I managed to save for about a year and offered to pay them a lump sum of money. Two of them were settled at 50% (Bank of America) one at 30% (Dicover Card). I have another credit card that I want to settle but to tell you the truth I do not have the money to pay them now. The debt is from Chase Bank and the balance is 14.000.00. Chase has placed the debt with a collection company called Management Services Incorporated.
I was thinking about calling them and trying to offer them monthly payments. I know from past experience that they prefer lump sums of money rather than monthly payments but I just can’t do that right now.
To tell you the truth, I don’t want to wait too long before I settle with Chase because I am afraid they are going to sue me and it gets harder to settle for less at that stage.
Do you think I should call them and ask for a settlement and monthly payments or should I wait until I have a lump sum of money and make them an offer then?
If I can target a settlement of 30 % I can probably spread it over three payments. If it is 40% it has to be spread over 4 maybe 5 payments.
Thank you
Adie – Thanks for moving the discussion over to a Chase credit card settlement and payment page. I mentioned on the other page that Chase may not have sold the debt off to a buyer, but may have your account out with an assignment debt collector. I had asked if you could come up with a settlement of 30 to 40% if the settling and agreeing to pay that percentage were able to be spread out over a few months.
When your Chase credit card debt had not been charged off you would have been limited to 3 roughly 90 payment terms on the settlement with Chase due to guidance Chase must follow that from their primary regulator the OCC.
After the account has charged off, the 3 month payment term with the settlement are not a regulatory concern, but can still be a factor. The reason being is often due to this line of thinking – If you can pay xxx.xx amount for several months toward a settlement, why can’t you pay xxx.xx amount for many more months?
It is best if you are prepared for this line of reasoning from the collection side, whether settling your credit card debt with Chase after charge off, a debt collector Chase placed the account with, or when dealing with a debt buyer.
I do consistently see 30 to 40% settlements with Chase accounts as of the date I am commenting. I do like you chances of getting this stretched out to 4 or 5 payments with Management Services. Is the name of the debt collector Resource Management Services Inc?
In answer to your question about waiting for a lump sum:
It is optimal to settle with Chase and most major credit cards with a lump sum payment – no matter what stage of collection you are in. The reason is two fold:
1. If you only settle for a lump sum you can manage at the time, you remove the risk of having made one or two payments toward a settlement, but them having a bump in the road where you are not able to make the next scheduled payment. Missing payments on a settlement agreement often means losing the deal, the money you made in payments already being applied to the full balance, and negotiating all over again.
2. You have a set amount to settle using funds from whatever source and remove the line of thinking I mentioned above that collectors drift toward when longer term payments on a settlements are asked for.
When getting a settlement from a debt collection agency with more than a couple of payments involved, it is best not to leave an impression that the monthly payment is what you can afford from your monthly income.
Hi Michael,
I need advice. I went bankrupt 11 years ago and I though Chase Credit was one of the cards charged off. I don’t even remember having a credit card it’s been so long. I received a letter from Midland Financial that they were taking me to small claims court for the debt owed. I haven’t had any communication from any of my debtors since the bankruptcy until now. I live in Maine if that helps, but I am very confused why this is happening. Also, if I am liable for paying off a debt after bankruptcy, can I still do this and avoid going to small claims court? Thank you
Was the bankruptcy chapter 13 or 7?
Is the Chase account on your credit reports?
It was Chapter 7 and this account is on my credit report as a closed account, but it was not part of my bankrupsy
When was the last payment made on this account? What state are you in? I want to determine if the SOL for you to be sued has passed.
You can pay off, or negotiate and settle your Chase account with Midland Funding and avoid court. I would want to make sure the collection is valid first though.
Hi Michael, I went ahead an settled with them a couple weeks ago. I received a letter that this was paid off, now I just got home today and received a new letter from the Maine Small Claims Court that the Plaintiff (Chase) is requesting a continuance and that I need to appear on 2/25 – this can’t be correct seeing they accepted my payoff right?
Call Midland Funding directly, and also the attorney handling the account. Make sure the records all reflect this was settled and get them to withdraw from court. If you have not been able to do that to your satisfaction be sure to show up in court on your hearing day with your settlement agreement and proof that you paid. I have seen too many cases still get rubber stamped even though the settlement was completed. You avoid that by being there.
Thank you Michael, I called Midland but they would not speak with me, they referred me to the atty, I will call them today. Thank you so very much.
I have a balance of $6400 with chase. The last four months I have been sending them between $400 to $700 a month to get my balance down because I am needed to relocate to take care of my mom and will not be able to work. I asked them to do a one lump settlement and offered $4000. They would not settle. The best they could do was give me 92% and wanted a lump sum of $5900. I explained that I sold my car for $3300 and had only $700 in my savings. They did not care. I think my mistake was that I have been paying consistently and have no late payments.
You will not get Chase to settle with you for the most favorable rates until you are typically 5 months or more behind. That means your credit score takes a hit. That is the trade off.
Are thinking of waiting them out to settle down the road? Do you have any credit or finance goals for while you are moving,or in the next 6 to 12 months?
Hi I currently have $11,000 in credit card debit from chase bank. I recently lost my job and my income has dropped dramatically. I currently only make 1500 per month after taxes. I am also a sngle mother of 2 kids. I am current on my payments as of now. I wanted to if i could do a debit settlement or if there was something that you recommend that I do
What is the interest Chase is charging on your credit card?
Do you have other credit cards with balances on them, and if so, how much do those add up to?
I do recommend settling debt when necessary, but not as a first resort.
Post your answers in a comment reply and lets go from there.