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.
Michael, Appreciate your web site. My wife and I are both on Social Security and are in trouble with our two Chase credit cards. We owe 24,159 on one and 49,750 on the other. We quit paying on them about seven months ago. The 24K card has been turned over to Nationwide Credit and after talking to them they have offered a 7500 complete pay off (31%) or to extend the original with no more interest or penalties for 50.00 a month at this time. and we can re-negotiate later for a pay-off. I told them I may be able to do this as long as they would hold the pay-off to 31% of the balance owing. They said it would be a new negotiation at that time. I told them I may consider it if I could get the 49,000 collector (Client Services whom have not contacted me) to go along with the same program. There is a decent chance that I may come into a couple of 5-15,000 pay days this year. Your thoughts?
Are there other collection debts out there besides these two Chase accounts? If so, how much and with whom?
How soon would you be able to raise the first $7,500.00?
All other bills are paid on time. The 7500 probably I wouldn’t have for 6 months and I am only about 80% sure of that. It is not a certainty.
It would be good to know the other debts in order to establish a baseline for settling vs filing bankruptcy.
Nationwide will likely not have your Chase account in 6 months. And the same thing applies to client Services.
You can make really small monthly payments and see if that allows Nationwide to hold onto your account long enough to later settle with them. I do not see that succeeding with your larger balance Chase account.
Have you looked into bankruptcy at all?
I was with a debt settlement company for several years and settled 6 out of 7 credit cards. The 1 that is left is with chase bank. I had 2 Chase cards and 1 got settled and 1 didn’t. I believe Chase still owns that account and it hasn’t been paid since 2009. I have never received anything from them. No phone calls or letters. It has been 6 years now. I would like to settle with them, but right now I don’t have a lump sum. Do credit card companies ever forgive the full amount after 6 years? I live in NY. Do you think they w0uld accept half in monthly affordable payments? I think it is up to $14,000 by now. What should I do?
I am not a huge fan of monthly payments, especially if the SOL to sue is now passed. What is your motivation for trying to resolve this account?
Is Chase reporting a balance still owed to them on your credit reports, or does it say zero?
Yes, lenders can and do completely forgive defaulted debts, and you can be taxed on that. Chase may do that with your file, and should if all collection efforts have been abandoned for 3 years, though there is pending guidance changes from the IRS on the issue of abandoned debt.
Hi! I’m sorry it took me so long to get back to you. I got 2 of the 3 credit reports and the amount is $10,485.00 that is still owed to Chase and it does say it was charged off. When I was with the debt settlement company they contacted eachother once and chase said they would take $4,200.00, but we were paying off other bills at the time and that was the end of it. I never heard from them again, which I think is wierd. It says my last payment to them was 2/2009. Now you said the SOL to sue has passed, so I don’t have to worry about them garnishing our wages, right? I did not receive a 1099 this year. I am hoping they will forget and forgive me, so I would only pay the tax on that amount. It says it will stay on my credit report until 3/2016. Will it really go off if it still has a $10.485.00 balance? What do think will happen to this account. I just keep thinking about it.
Now that the account is passed the SOL to file a legitimate suit, you are not at risk for garnishment, lien, or bank account levy. If for some reason someone were to file a suit, your defense is simply that the debt is time barred.
This Chase account will still fall off your credit reports regardless of whether the 10k plus balance is unpaid or not.
Nothing will really happen with this last remaining account. You may hear from one or more a third party debt collectors over the course of time, as the debt did not really just disappear that we know of. If that happens, post an update and lets go from there.
Ok Thanks!
I owe Wells Fargo over $20,000.00 on a debit platinum checking account card. It mostly built up over time due to the overdraft protection option. I am going to sell some land and would like to settle with Wells. It would be nice if they would take $10,000 to settle the debt. I am only one month beind in my payments. I have got to the point where I cannot make the monthly payment of $600 +. I do not want any type of hardship payment plan. I only want a one time settlement. What is my best course of action to reach a settlement? I am worried that this is tied into my checking account. I have two aut0matic draws for mortgages. The two mortgages total $28,000. I have other draws for loans. I also have three automatic deposits for my retirement check, disability check, and a Navy Reserve retirement check. If they settle, are they going to close my checking account? This could be a disaster. Also, might they just close the overdraft protection? I need to keep this going. I also owe about $5000 total on other credit cards.
It may be a brief hassle to set up a new checking account at another bank, and to reset up your automatic deposits and withdrawals, but it will set your mind at more ease, and may improve your ability to settle the account too. Read more about bank account separation when settling debts, and other critical issues when negotiating bills.
Hello,
Please advise on my crazy debt problems that have come about due to business problems.
Chase CC (1) 105,000
Chase CC (2) 16,000
American Express (1) 22,000
American Express (2) 5,000
Kabbage 86,000
I am currently only behind on the 22,000 from Amex but will be behind on all within the next week. I have the ability to borrow 100k from a relative. How would you recommend I proceed to get a settlement with the institutions for less than 100k?
I see that you submitted a request for a consultation Joe. I sent that on to a CRN specialist who will reach out to you and get into the details and approach you can take.
Is this a business that you plan to keep open?
Yes, I have alot of business assets but business has took a terrible turn. I plan to exit the business but that could take some time to sale the assets.
Okay. That could add some complexity to the process of negotiating and settling some of your accounts. Look for a specialist to connect with you, if that has not happened already.
Hi Michael
With your help I was able to reach settlements with four different financial institutions in 2014. I expect to be hit with a very large 1099C. I am really counting on the insolvency provision to help me out of this mess but I had a few questions
Can my full mortgage be included in the insolvency calculation ?
Is Publication 4681 still the current one for tax year 2014 (file 2015) everything I found said 2013 and the IRS website is confusing ?
Is form 982 the correct form for tax year 2014 and is there a separate worksheet ?
Any websites or references you can provide would also be greatly appreciated. I do use a CPA for my return but I need to be an educated tax payer (especially given the situation)
Thanks
Nice work resolving your credit card debts John! Would you mind sharing what you owed to who, and the result you negotiated? It helps readers better identify realistic targets, and solutions for their own bills.
Not being a tax professional, I would defer all of those questions to the one you are working with, or perhaps an expert tax blogger like Jim Buttonow.
Generally speaking, your mortgage amount does not stand alone. You know what you owe on your mortgage, now you need comps for what your home is worth, so you can calculate your homes value. If you have equity, that amount of equity, and other net worth calculations (401k for example) needs to be offset by what you owe (credit cards and other debts).
If you owe more on your mortgage than the home can be sold for, which is still the case for many, the amount you are upside down is included in with the credit card balances as negative worth.
Form 982 is still the go to form to my knowledge, and the worksheet is something I link to in this post covering the topic of taxes on forgiven debt and insolvency.
Sure … let me type up my experience and submit . It was really interesting on who was willing to do what and how they went about it
I am struggling with whether to do bankruptcy or settlement. My income will not change much and I am struggling putting off home repairs etc to pay my minimum payments as is. I was able to get on a hardship program with the other credit cards but synchrony bank is horrendous to deal with. At this point I have decided to record my conversations with them. They told me I was 90 days late, then that I had not been but now I was. They told me no program was available to me. I called them repeatedly finally, after they had already closed my card and after I talked to the lady for a long and kept telling her I knew there had to be something she said o yeah you could make three payments for the next three months of X dollars and will be caught up. She could not tell me the interest rate, no one can. I called to make sure they got the payment about a week later and asked why they did not have a hardship program and the lady told me they did. It was at a lower interest than the rate of my original card, locked in for a year but I could not get it because I was already in the program. AND she said it was for a limited time only. There is more. It makes me want to do the bankruptcy and get it over with. I dont care if I can get a credit card anymore I am worried about getting jobs. I also like to sell on ebay and I think they don’t allow it if you have a bankruptcy. any help appreciate. Synchrony is a scary bank
Depending on the situation (how many creditors, which cards, etc.), it can be better to get set up on lower payments with your credit cards through a credit counseling agency. Your one off approach can hit the snags you refer to, and other ones too.
It may no longer be an option because your other accounts are on temporary or long term hardship repayment plans, but credit counseling organizations can help with Synchrony credit cards (formerly GEMB). Look up an agency, or call 888-326-8026 to speak to one now about whether they can help get your payments down to where they are more affordable.
As far as making the payments compared to bankruptcy, what are your total debts? What state do you live in?
Michael,
My situation with Chase is about the same as the others here. Tried to get them to lower my interest rate to no avail. Stopped paying and it instantly was lowered. It was kinda to late and it was to the point I couldn’t pay at all, so I didn’t. Of course they called….I didn’t answer. Charged off and the very next day GC Services started calling. Got the dunning letter and did not answer. They called daily from one number and after the 30 days……started calling from a different number. Today I got a settlement letter from GC Services. It’s strange though because the letter was in a regular everyday envelope and was handwritten?? Not in a business envelope. The return address has a name with manager after it?? Strange!! Inside the letter shows GCS logo on top.
My Balance is $4,414.28
Settlement offer is $3,134.14 by Nov. 28th and that they will report as ‘settled’
I don’t have that much due to job loss. In your opinion should I just reply and offer a lower amount?
Can you swing a 30%-ish settlement on the Chase debt with GC Services?
I would be comfortable with that. I have been saving to take care of it but wasn’t sure how to reply to the GCS offer. Also not being comfortable with the fact the envelope as hand written……just thought that was strange.
One more thing….the letter said they would report to Chase as ‘Settled’. Is that the wording i’m looking for?? Thanks so much for the help!
GC Services can agree to settle as an agent for Chase. When they mark your account as settled, Chase reflects that on your credit reports within a couple weeks to months. You want that wording in the letter, or some other variation. Here is an article dedicated to the topic: https://consumerrecoverynetwork.com/credit-card-debt-to-include-in-settlement-plan/
You can call GC Services in response to their settlement letter and make a counter offer. If it were me, I would probably start at something like 20%, and telling them there is no way you can come up with the money they offered.
GC Services is not likely going to take 20% of the balance you owe to Chase, and they may not even come down close to 30% right then (or ever). But you are not trying to get everything negotiated in the first call. Hang up politely, letting them know you will see what you can do and get back to them. I would call a few days later and offer a rounded figure that is close to 30% and stick to it from there, unless GC counters with something close that you are willing to accept.
Get the deal in writing from them before you pay.
Hand written envelopes from a collection agency like GC Services, or any collector for that matter, is strange. I think it is smart though, as I believe more people would open those letters than the printed ones.
You can call Chase directly to verify with them that they sent your credit card to GC Services for collection.
I just wanted to let you know that I finally settled my Chase credit card for 26% of the total amount owed. Thank you so much for this website and all your help. I was over 180 days past due and basically ignored the calls but checked in every so often to see what they were willing to do. If I couldn’t pay it I’d basically tell them that and check back in a month or so later. I think doing that may have helped me keep them from selling my debt because I was willing to pay something and was offering 15-20% of my balance which is more than a debt collector would have paid. You and your website helped ease the stress of this process by educating us on what to expect. Thank you!
Brooke, how much did you owe Chase?
Thanks for the update and great feedback Brooke. And congratulations on that great settlement!
Hi Michael,
I gave 3 cards with Chase 2 for $6000 and 1 for $4500. I am currently up to date on payments but am not making any head way. My student loans are coming due in a few months and I know I will not be able to afford both. A few questions. My goal is to pay around 40% and be done with them. How long is the statute of limitations to sue in Texas? Shoud I just stop paying and wait for a deal with collections? Should I cancel them?
A million thanks!!!
Are all the Chase cards you want to settle more than a year or two new (when you opened the accounts)?
Assuming you need 40% to settle, how long will it take for you to pull together the money?
Texas has a 4 year SOL to legitimately sue for these debts.
You cannot settle while current. Stopping paying now, or when your student loans become the higher priority, and force the issue, is up to you. But depending on when you have funds available to start negotiating settlements (the earlier the better), you will either be dealing with Chase directly, or collection agencies. Chase is doing more and more pre charge off placement with collection agencies than before. This means debt collectors could have the accounts before you have missed 6 months of payments, which is a bit of a departure from Chase recovery and collection trends of the last decade or so.
With debt settlement, whether you call in to cancel accounts, or Chase cancels your credit cards after your first missed billing cycles, the end result is the same. If you were going for credit counseling with Chase cards, or their internal balance liquidation hardship plans that go 6o months, it is possible that “closed by customer” as opposed to “closed by credit grantor” on your credit reports could be meaningful to some.
Hi Michael
I have a delinquent credit card with a credit union which they refused to settle for less than 80%. At that time I was in the process of negotiating three other settlements so I could not agree. The card was subsequently sent to collections and they have had the debt for about 8 weeks. The collections company actually hasn’t been too pushy “yet” but the last time we spoke they said I was running out of time and that I would need to get on a payment plan of 300 or 400 per month. They also started to insinuate a lawsuit could be coming if I didn’t start to address the debt. The balance on the card was at 15,600 before it transferred but is more likely around 16K now. I am not sure what to do. I don’t think they will settle. I can try again but they appear stuck on the 70% or 80% mark. I can start to make monthly payments or wait to see if they sue me.
If they do file a lawsuit would the collections company still be involved or would it go to yet another third party? If I make payments should I settle back on the original amount of 15,600 and demand they waive/stop any additional interest and penalties?
I have successfully negotiated three other cards (Chase, Bank of America and Discover) so only have limited funds left. I have a 401K that I could dip into to address the debt but that brings its own set of issues
Can you let me know what you think? I am worried about getting sued and not knowing what could happen. If I get sued will the judge likely just make me pay the amount owed and put me on a plan similar to what the collections company is suggesting
Thanks for your help
What is the name of the collection agency contacting you now?
Smaller local and regional banks are not nearly as forgiving when it comes to settling. But you can sometimes get interest and penalties stopped/lowered, and get a monthly payment plan close to what you could have gotten through a credit counseling agency.
Unless you are borrowing from your 401k, I would not touch it to settle this debt. I probably wouldn’t even if I was loaning myself the money. But I would look at the performance aggregate, and maybe I could make it make sense.
When it comes to what the payment or settlement would look like post judgment, they can levy, lien and garnish in most states, and it will be the collection attorneys job to see that happen unless you do work something out.
Hi Michael
The name of the collection agency is https://www.grantweber.com/ . So if I can’t reach a settlement then it sounds like I should try to come up with some type of payment plan. What provisions should be spelled out in the payment plan ? I assume we need a written agreement before even going down this path.
• The total amount of the debt
• The monthly payment amount
• The term
• Something defining how this debt will be reported the credit agencies. Can I ask that it gets updated to report the payment plan during the process or will it simply show delinquent until the debt is paid as agreed
Anything else ?
Thanks
That about covers it, and no, you do not typically see charge off accounts with collectors get updated monthly on your credit reports. It is one of the reasons settlement will often make more sense once in collections. But that requires resources, and yours are depleted.
You do want the correct account identified.
Hello Michael,
I’ve been trying to find info about falling behind on Chase business card payments and haven’t been successful yet. I have one Chase biz card with about $5,000 balance and a Chase United explore card with about $9,000. Plus 2 business and 1 personal checking accounts with Chase. A few months ago, I went into a limbo with my finances and couldn’t pay my Citibank cards. They’re now in collection as of Sep 25th. This is only the beginning. I have other cards with WF, Cap1, Firstbank and they will have the same end as with the Citibank cards. My main concern is my Chase cards, esp the business card. Does chase treat business credit cards any different than the personal cards? Should I do my utmost and try to pay these cards on time as I have checking accounts? If I do give up and not be able to pay either card, what happens to my checking accounts? Will Chase close them as well? In the even of default on a business card, does it get reported to the firms like D&B? Or does Chase offer any hardship programs on business cards? And if I do give up on the personal Chase card, yet try my best on keeping up with the business, does it still affect the business card and the business checking accounts? I hope I didn’t go overboard with so many questions. Any advice at this hard times will be greatly appreciated.
Thank you
Do you know for certain that you are not a personal guarantor on the Chase business credit cards?
You can often manage your personal and business accounts separate of each other. But I would hate for you to let all of your Chase personal credit cards and accounts go south, trying to hold on to your Chase business credit cards (I assume for operational purposes), wasting resources trying to hang on, only to let all that fold later on too.
Can you be specific with what happened to lower your income, or demand more of your resources, and also a realistic perspective of your earnings with the business moving forward (you are not bringing enough in to pay bills now, how is that going to change i.e. seasonal business and these are the best months for you coming up)?
Thank you Michael for the reply.
First of all I am not 100% sure if I’m a personal guarantor but most likely I am. At this point,
my personal finances and credit profile had a major downfall, my credit score went down to
500 from 740 (which was in early 2013),
so I thought at least I could try and save the company credit status and name, in case I can manage to
make a come-back financially in a few years somehow.
I am now wondering if I default on the Chase business card, or even go to a settlement with Chase,
will this impact my business name, as far as D&B, inter-banks CHECK system and similar institutions go?
Can Chase put a lien on any money in my personal or business checking accounts while I’m within the 180
days limit? What is the worst case scenario with a Chase business card going default and end up in
settlement, if not at the hands of a CA?
This all started when I lost a major customer in the beginning of 2014 who’d be paying certain amount
every month which would cover most of my operational costs. Other than that, handful of customers
that I had reduced their spendings and I couldn’t manage to find new ones and come up with
other sources of income.
Thank you again…
Yes, defaulting on Chase business credit cards, and other loans and accounts in the business name, can sully the name with Dunn and Bradstreet, and prevent future credit opportunities for the business.
The question about liens and/or cross collateral from one Chase account or loan product to another, would have to be outlined in the loan and account terms. This is something you do not see as much with the major banks like Chase, BofA, etc., unless we are talking about larger commercial accounts. You see that type of thing happen with credit unions, and smaller dollars.
Worst case scenario is the business is sued for collection, or you are sued as a guarantor. But Chase is not suing much on consumer debts these days, so it is more likely that court collections would come from a debt buyer who may end up purchasing some of your Chase accounts.
There are options to consider when dealing with collections in the court, or with collection agencies and debt buyers in general. And you can settle with Chase, a debt collection company working for Chase, or anyone collecting on these debts during their life cycle, including if sued.
I would encourage you to run through all of your personal and business finances now. Be realistic about your options and ability to turn this around. If you have a shot at righting the ship in a 48 month time frame, that is great. You just have to navigate the mine field well. If turning this all around, or the majority of it, cannot realistically be achieved in a few years time (financial hole is just to deep), look at your options with chapter 7 bankruptcy, as the fresh start you can get from that process would allow you to focus on rebuilding the current business, or starting a new one, much sooner and for less cost.
Hi Michael, I have a chase card balance of $22,000. The money was used in 2013 to fix an emergency water issue at a building I own. I have made payments consistently for over a year now @ zero %. That has run out and the interest is now at 19+%. My business is having a very disappointing year and it’s all I can do to pay the mortgage. I cannot pay chase any longer. My credit score is very high (excellent), I own my home and have no other debts. I do not ever intend on buying a mortgage again and I pay cash for everything else. To keep my business running at the rate it’s going today, I need every dollar. What can I expect in the upcoming year from chase? Thank you.
When will/were payments to Chase stopped?
Is this a scenario where if your interest rates were again close to zero, you would still be able to pay Chase?
What is your goal for this account, and why the interest in a years time (why be so specific to one year)?
I can help you get a firm understanding of what is going to happen between now and 12 months away, but answers to those questions will help me offer more than just generalizations.
Payments just stopped with last month. Even if I had a low interest rate, business is so grim that I cannot pay anything. My goal is to let it go —
Chase will make some efforts to get you to pay through recovery department phone calls, and with collection notices in the mail. You will continue to receive normal billing statements for several months.
Chase will charge off the account in compliance with generally accepted accounting principles and office of the comptroller of the currency (OCC) guidance. That means after no later than 180 days of nonpayment your account will get dropped into the Chase collection pipeline. Chase can subject your account to outside collections efforts sooner than 180 days, but few major credit card issuers currently do that.
Chase will decide, generally at charge off, whether to assign, sue, or sell. All of these options will involve outside collectors.
Chase may send your account out to a contingency debt collector who will call and write to you in an effort to get you to pay. The collection agency in this scenario is paid only when they get you to pay. If they are unable to do that (get you to pay), after a set period of time, Chase gets the account back and will again decide to assign, sue, sell.
Chase stopped suing their account holders for unpaid credit card debts a couple years ago. They had some issues to clean up, and I believe those are mostly passed them as of right now. But I do not expect them to restart the collection litigation any time soon, as they shuttered their entire department that was built for the purpose.
When Chase sells accounts off to debt buyers, those debt buyers may make collection calls and send you collection notices, and perhaps even offers to settle. These debt buyers will be where your risk of being sued exist (based on current trends).
All along the way, and at every stage of collection, with whomever is doing the collecting, you have options to settle for less than the balance owed.
Once your states SOL to legitimately sue has expired, the collection teeth are removed. You then wait out credit reporting time limits.
Hello Michael first of all thank you so much for this space.
I have a credit card debt with Chase and I want to low my interest … my debt is now $7300 I want to pay it as soon as possible but i called over there to try to settle a payment, I offered $5000 to set off the balance but they said to me NO. They said id I want to pay off and cancel the credit card, I need to pay the whole amount $7300. Any ideas? Thank you
hayat – Are your payments with Chase up to date? Chase is typically only going to consider settling with their account holders when payments are missed. If you have already missed payments, by how many months?
Michael we are up to date ! Then … nothing that we can do ?
There is nothing you can do about settling with Chase for less than what you owe when you are up to date with payments. Chase settlement policies do not kick in until you miss your payment, and often at least 3 payments. After you miss your first payment, Chase will first try to reestablish monthly payments with you, and they will often make good lower payment offers in order to work with your budget.
What is it that you are trying to accomplish with your pay off strategy? What is prompting your offer to Chase?
Hello,
I have a credit card with Chase with a balance now of 3538.00. I have tried to settle with them for $800. They would not agree. They offered $1400 as their lowest offer. I just can not do more than $800. So now I just got a letter from GC Services. It just says what I owe and says to make a payment. Will this company settle with me for what I can afford? Should I try to call them and make an offer?
Any info or advice will be greatly appreciated.
Melissa
1400.00 may be as good as it gets when settling credit card debts with Chase. That is roughly 40% of your balance, and a fairly consistent target with them. Having said that, there are debt collection companies that Chase sends accounts out to who have settled for as low as 25-ish percent, which is more in line with what you say you can get your hands on. Those settlements were in the last few months, but were not with GC Services, and I am skeptical you will get that with them, but you should try.
Please post an update with how you progress.
Thanks for the fast response. It is very much appreciated.
When should I try to settle with GC? I know Chase was still trying to collect as of a week or 10 days ago. Should I wait any particular amount of time? Also, should I be overly concerned of a lawsuit? I’m not really in a position to be collected from. What I mean is I don’t own anything and I’m not employed. Still, I would want to avoid being sued if at all possible.
If it makes any difference I had 3 other credit cards that I have settled with in the past 3 – 4 months. BofA settled 5000 for $1400, Citi settled $1900 for $800, and Discover settled $1600 for $800.
Thanks again,
Melissa
Getting sued for a debt does not always have rhyme or reason. You and I would think some one not very target-able would get passed over, but that is unfortunately not the case. Yes, you should be concerned about being sued. No, not overly concerned yet, as GC Services has the account. Hold onto overly concerned for when you get a collection notice from an attorney licensed in your state.
When negotiating debt with contingency collectors, there are timing elements you can look to capitalize on. Watch this video, and read through the article and the comments, for more on strategy and timing tips: https://consumerrecoverynetwork.com/my-credit-card-account-just-charged-off-and-a-debt-collector-keeps-calling-me/.
It does make a difference that you settled with those other creditors, and prevented them from going out to debt collectors. You can take that confidence into resolving your Chase account with GC Services. Are there any other unpaid bills on your credit reports? You can sometimes leverage the fact that any money you have available can just as easily go to a different bill, and because debt collectors can see your credit reports, other unpaid bills can even be targeted by name when on the telephone.
Great Video !! Thanks.
Hello Michael!
I am glad that I came across your website. I desperately need help and I have been doing research about my credit problem and I am hoping you could help me out. This is my situation: I have an outstanding balance of $41,000 from Chase at the moment. I have always paid my monthly on time and never missed a payment. However, about over a year ago, I lost my job and I have had financial difficulties till now. I got into the Chase hardship program that same year. I am basically paying $694 every month for 60months. I still don’t have a stable job till now and I really don’t know what to do anymore. I have a friend who is also an American who lives in Korea now. She offered me to go there and start a new life. I am considering of doing this since I am still single anyway. I don’t think I’d still be able to pay $694 every month since I am sure I won’t be earning as much. What would happen if I cant afford to pay anymore? I am already on the hardship program and I am still paying $694. If ever I decide to go and live in Korea, I dont plan on going back here in the US unless only to visit my family. I don’t have any assets here as well. What would you suggest I do? What are my options? I am really confused and do not know what to do. Thank you so much for any help or advice you have for me, Michael!
Have you looked in to chapter 7 bankruptcy? Are there other debts than the Chase credit card in hardship?
Chapter 7 would cost you less than 2k more than likely (maybe less than 1500). You could be done with the debt for 2 to 3 months of the payments you make to Chase right now.
If you stop paying, the normal collection cycles will start. And if you were out of country for a long stretch, or permanently, there is not much that will occur. I doubt you would even get collection calls.
yes, I already called for a free consultation regarding chapter 7 and they said that it would take at least 6 months for the whole process and that I would have to be here in the states. The thing is I have to leave by December of this year if ever I decide to go. There is a time limit to the contract I would have for work in Korea. Although I am thinking that maybe I could wait till another contract next year so I could file for chapter 7? but there will be no guarantee that I could be given another contract if I wait for another year.
You mentioned that there is not much that will occur if I were out of country for a long stretch or permanently. My main concern about it if ever is that do you think Chase or the debt collection agencies will have the right or power to garnish my wages outside the US? Will they take away any assets I could possibly have in the country I would be living in? I’m aware that if someone goes on default for a period of time, they could be sued. and since I might not be here anymore when that happens and I wont be able to go to court for it, I believe a judgement against me can be given. and with that, I am just afraid that they could follow me wherever I go and would have the power to take my money or any assets I would have. Is that possible? I have asked this to many people and no one has given me a straight answer. I am afraid and uncertain of what could happen.
Thank you so much Michael! I really appreciate your response, so much.
I have worked with many people to resolve debts originated in the United States, but where they were abroad long term (employment, missions, thought would be permanent, etc). Some of those files had judgments where garnishment, bank levy, and property liens are real risks. But those typically apply in the state the judgment is issued. You do not have a judgment, and would not be worried about property anywhere in one of the states.
There has been a big problem with people being sued for debts without proper legal notice being given. This type of scenario is a concern, but not as high of one as it has been in the past. Not that my saying this means much. If it were to happen to you, you could give a rip about whether it happens to less people today than in 2005.
You could change your address to a mail drop that will scan all of your mail and email it to you. This would prevent some of this concern. You could go on notice with Chase that you are moving to Korea, and ask that your address change to your friends place in Korea, or another address. This would make it hard for Chase, or a later debt buyer that may end up with your Chase account, to say they legitimately served you (they couldn’t have).
I hope that helps. At the end of the day, while your concerns are valid ones, the debt is affordable to maintain, or it isn’t. You have the lowest payment possible with Chase now, and that is not doing it. Chase does not have a strong 60/60 plan like Discover Card. You are limited to the solutions available.
You can always look at settling this debt down the road, and likely less than half of what is owed to Chase today.
So is it safe to assume then that neither Chase nor a collection agency will have the power to take any of my possible assets or money in the new country I would live in?
And yes, I do feel bad that I am still having difficulty even with the lowest possible payment I have with Chase and the thought of not being able to pay anymore. But I guess I have to do what I have to do to survive. And like what you mentioned, I could always settle the debt down the road anyway and most likely half of what is owed to Chase.
I suppose I could have finished my prior thought on this better. In all files working with people overseas, and when judgments were involved, never has there been a file where risks to money or property in other countries were part of the motivation for resolving the debts. It just does not happen with debts like we are discussing.
Is it possible theoretically? I suppose, but possible in the realm of reality today, not so much. And there would be many early warning signs that would allow you to plan and prevent.
I got your reply on my email but it doesn’t seem to show here when I clicked on the link. Anyway, I just wanted to take the time to thank you for responding to all my questions. I will take everything you said into considerations, at least now I have an idea of what I am or will be dealing with if ever. Again, THANK YOU SO MUCH, Michael! 🙂
My Credit is in shambles right now with a score of 534 . I am in the process of settling 3 credit cards (only one of which is completed). Its probably still too early to have the creditors report back to the agencies that the debt was “settled for less than the amount owed” . I do have accounts on time but those are a mortgage payment and student loans ..basically those debts that you would expect to take priority. I find it curious that they have not contacted me yet. Do you think this is the research phase where they try to dig into my personal financial situation ?
Who were the other two accounts with? Do you know who is collecting on them now? Who did you settle the one account with, and how long ago?
Hi Michael
I was able to successfully settle a few different credit cards but unfortunately one that I had through a credit union was charged off. They sold the debt to Grant and Webber. Everything I have found regarding this collection agency seems to be negative. I understand that they have to follow certain guidelines but it doesn’t give me the warmest feeling. The strange part was that the collection agency has yet to contact me and it has been 30 days. I even contacted the original creditor and they have twice directed me to the collection agency. I am concerned that this collection agency is gearing up to file a law suit. Wouldn’t they at least try to negotiate a settlement first or work out a payment plan ? Do you think they would take a lump sum payment for 50% +/- of the debt… Anything is better than going to court. I am not experienced in dealing with collections agencies and wonder what they would be willing to accept on a 16K debt
Thanks
My experience is that the majority of debts that are sold off, or placed immediately with attorneys, will still result in at least one collection notice being mailed out, and at least one phone call attempt. I have seen first contact be service of a lawsuit.
If your collection profile meets the criteria, you can settle for 50% or less of the balance. What kind of shape is your credit report in? Do you have other accounts in collection on their? How many? Do you have accounts showing as being paid on time? If so, what types of accounts?
I spoke with I think it was Allied One who is working for Chase. They offered me the 60 month payment plan which only changes the payment by $10/mo what I’m supposed to pay now. I basically said if I could afford to pay that I would be. They didn’t seem easy at all to work with. After some time on the phone they offered to submit to Citibank an offer for about 45% which is more than I have at the moment. What kinds of settlements do you typically see with Chase. I was thinking of offering 20% to start but they didn’t seem interested. I think I’m close to 180 days past due which I’m concerned they would sell my account. If that is the case wouldn’t 20% be a good deal for them?
Try not to think of this process so much from what we think would make sense for banks like Chase to agree to. Unless, of course, you want to constantly be frustrated.
Selling freshly charge off debt to a debt buyer for, say, 11 cents on the dollar, when you are able to pull together 22 cents on the dollar as a settlement – does make sense mathematically. But not for Chase as a policy, and not at a level they want to scale, or at least not since peak credit card defaults during the recent recession.
I have seen better settlements with the first agency to get Chase debt right after charge off, than when negotiating with Chase recovery directly just before 180 days late. That is a change this year. But does not apply to all accounts, and Chase appears to be actively selling debts now, where they had put all that on hold during some recent regulatory scrutiny of their practices.
30 to 35 percent has a shot pre charge off, but if you don’t have it, is just is what it is.
What is the 45% Citi settlement reference about? Is that Allied, Alliance One?
I also have a Chase rewards that I got 3 months ago with 0 percent interest. I charged 289.00 & quickly paid it off. My husband said cancel the card he only wants one. I called and cancelled & it and 20 minutes later I called back to reinstate it because of the debt to availability for you credit. They said no. It was because I was 180 days late on a card. I said no way we don’t have any more cards except for one. They said we claimed bankruptcy 14 years ago and it was their card from back then. I asked why they issued me this most recent one and they couldn’t tell me. They said they would have to pull a detailed credit report and see if I could get it reinstated. I told them never mind and told them what they could do with the card. My husband wants to pull everything from them. We only have a small savings and checking and a car loan, but they don’t seem to care. Is it legal to go back that far with our bankruptcy. It killed us to claim bankruptcy, because we always paid our bills.
We owe 6,700 to a chase credit card. The interest is 26%. We have had this card for approximately 10 years and the interest has always stayed the same. We have paid on time every month except for a couple of months but then it was only by one or two days. We have called and begged for a lower interest rate and they said they review their accounts every 6 months and then they would let us know. We do owe this debt, but I could no longer work because of back surgery. We called and asked if we could pay them a lump sum to settle and they said our file was not eligible at this time. We offered them $5000, from a life ins. policy from my father and they said they would only accept 6356.74. My husband says screw them. We are older and we are so sick of being judged by our credit score, we just don’t care anymore. What do you suggest we do? Thanks for your help
You can settle with Chase for a much better savings by making the effort to resolve the account at a much more predictable time frame. I would recommend you read through the first stage debt negotiation section of the debt relief guide. You will find that you are about 5 months too early to settle if you are still current with payments to Chase. Start reading here: https://consumerrecoverynetwork.com/best-debt-settlement-timing/ – click to the next section at the bottom of each article, and post questions or concerns in the comments of each page as they come up.