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 owe 10k on a chase amazon cc and can’t afford to pay right now…how long can I go without paying before they sue me or offer a settlement
The answer to that will vary from one person to the next. You may want to schedule a phone consult with me to talk through what your situation will likely look like. You can do that here: https://calendly.com/debtbytes/15min
Hi Michael B,
Are you still repying to comments in here? I have multiple cards that are late on payments after falling behind due to having to leave my employment due to family health issues that made it necessary due to care needs that I couldn’t afford to hire someone to do. The family member recently passed, and I’ve been applying for jobs again.
I got a very low interest 7 year payback program on my Discover card that had about $11K owed, so I make about $177/mo on that. I have about $22K owed on my Chase card and am at 60 days late as of today. I am hoping to get a similar payment plan but have heard it may not be that easy with Chase (the Discover program was automated).
The expenses are legitimate and I’m not looking to get out of paying what I owe. But I’ve not yet found a new job but have started applying and don’t know how long it will take to get a job.
I know that if I continue missing payments, it likely goes to a collection agency and that a lower settlement may be possible.
For some reason, even though I have nothing past 65-90 days late yet, but a relative got a suspicious call where the person didn’t self-identify who they’re with, just gave a first name, said they’re trying to reach me (with a bogus backstory about why it was urgent, having nothing to do with finances). I just want to avoid impacting others linked to me, as they have nothing to do with my debt. That along with the charges being legitimate, I feel I should pay it back, but I need to be able to do it over a lot of time and without crazy interest that would make it impossible to claw out of.
I’m wondering what I should do with Chase? I’ve heard to steer clear of for-profit consumer programs, and this website seems to be non-profit. Wondering what I should do: get help from a non-profit, try to contact Chase myself and see what is the best hardship program they can offer, or let payments go late because I cannot afford them right now, and hope for a settlement down the road? I’m leery of the latter because of the aggressive (possibly illegal) tactics used that can border on harrassment of innocent relatives.
Thanks for your reply.
Can you consistently afford 366 monthly for your Chase account starting now, and without a job yet?
I had American Express Platinum card that charged off 7500.00 I received an offer 2 years later to make payments and my card would be reinstated. I accepted and made 3 equal payments of 2500.00.
My credit line was reduced but the did give me my old card back.
I owe Chase Sapphire 19k. Does such a program exist with Chase. My situation has changed and would like to do the same deal.
Amex removed two years of 90 days past due and closed on all three credit profiles.
I would call Chase and see what they say about this. I am skeptical they will reopen the same account.
Please let me know how they respond.
On Thursday of last week I agreed with Chase over the phone to a lump sum settlement for 30% of the total amount owed on each of 2 credit card accounts, and upon receipt of payment, the accounts would be settled in full. The agents repeatedly claim that they only allow 10 days for payment. Of course, a mailed settlement letter could take longer than that to arrive. They promised to fax the letter within 48 hours. (I have all of this fully documented).
No such fax arrived, and on Tuesday I followed up via phone. I have received faxes from others, so the issue is on their end. On Tuesday, they “resubmitted” the fax request and said it would be sent by Thursday. The fax did come in late Thursday night three minutes before midnight PT.
The fax includes just one of the two settlement letters they had previously promised to send. This letter is for the larger of 2 credit card accounts.
The letter is missing:
1. Any reference to the account, as you describe, “being satisfied in full i.e. “settled”, “settlement of this account”, “accepted as settlement in full”, “paid in full.”
2. The outstanding balance owed on the account. Only the amount I must pay is listed.
I guess I should call them to address these things and reiterate that they failed to follow through on their promise to fax the letter late last week, and that they cannot expect me to make payment by the deadline of June 12 (which essentially means submitting an ACH payment today, or going to a Chase branch with a cashier’s or certified check tomorrow).
Perhaps submitting these issues/complaints to them in writing on my chase.com dashboard via secure message is better.
The letter you sent me uses the term settlement in the header and in the opening sentence, and I would be okay with that given the rest of the verbiage.
I would prefer the total amount owed be in the letter, but this one is not a deal breaker if it were me.
They sure did not follow through on the second letter!
I owe Chase credit card $23,000, $3000 of which is interest charges. Due to income changes, I can no longer pay. I am 60 days late. I offered to settle with $10,000 cash which my kids can help me with. Chase will only go to $14,125. I said I can only do $10,000. I also let them know that due to health problems I may not be around more than a couple more years. I said I would have to go to collection in that case, and they said to check back in a month to see if they can do a lower amount. What is your take on the situation?
We can often help settle Chase accounts for much lower than that. You can schedule a call with me using the Get Help tab at the top of the page. I can cover how you can deal with Chase directly, or how we can help you, on that call.
Michael, I have 2 CC’ds that I need help with. I’ve been putting money aside with Americor, but frankly, I’m not happy with their negotiation skills. It seems you can do better than 50% I have a Chase card with an original balance of $15,811 and a Pen Air Federal Credit Union CC of $2,293. I have $7,000 cash and I feel this would be enough to make a deal with both of these accounts. I haven’t been paying on these accounts for about 18 months. Please let me know if you feel you can help get me down to the 25-30% level.
-Mark
Given the age of the debts I feel pretty good about hitting your target. You can click on the get debt help tab in the upper right, or anywhere on the site, and fill in your user profile and schedule a call with me to get started.
Divorced in April 2016
Divorce was amicable, and ex agreed to pay Chase credit card which is in my name.
I just received a phone call stating my ex has not paid a dime in almost 155 days.
The account is now closed, and Chase wants to settle at 50%
Since my credit has already been damaged, should I wait and allow the debt to be charged off in order to seek a cheaper settlement with the new debt buyer?
Chase stopped selling debt in 2013, and has not kicked back up again. You will be settling with a third party collection agency Chase will send your account to after charge off. And yes, if it were me, I would wait to settle with the collection agency where a better deal can be reached.
What is the balance owed on the account?
Current balance is $14,200.
Is a charge off “worse” on my credit report, as opposed to being late?
Once you settle the account, it won’t really matter whether it was charged off or not, the end result is the same.
Done well I would settle this between 20 and 30 percent. If you need help you can start a chat with the bot on the screen. That will ask you some questions that will then come to me so I can set up a phone call with you.
I got on a plan with Chase. 0% interest and payments each month. It was at 9300.00 it is now at 3800.00 I lost my business and my husband at the time it was call after call. I did not negociate I just wanted it done. I should have negotiated the late fees and interest charges if I had done so I would owe like 2000.00 now which I can pay off is there a WAY i CAN DO THIS??? I have called the solutions line a couple times and no luck
.
I would be surprised if Chase backed out fees and interest after all this time has gone by.
And if I stop paying now what will happen? I have paid back more than 40%
If you stop making payments to Chase now they will put your account through the normal debt collection paces. You can settle your Chase account for less later on if you like.
Hi Michael
I just got a call from chase cards. I have to cards. One 112 days past due for $900 and one at 76 days past due for $4030. They said I can make them an offer for settlement for both cards but only my smaller card will be charging off the 22nd of this month. They said if you gave us 75% we could probably work with you. I know I can get this after charge off around 35-40%,so I was going to come back at them with a 30% offer but should I include both cards in the negotiations or wait until my larger balance is closer to charge off. I find it odd they are charging off so soon and not waiting closer to 180 days.
I heard a rumor a couple years ago that Chase was going to start charging off credit card debts 60 to 90 days earlier than usual. I saw them do it a few times, but not across the board. It would not surprise me if they charged off your credit cards early.
I would not settle right now. The settlements you can negotiate with Chase today are not optimal. You can get to as low as 20% with some of the debt collection agencies they send accounts to. I would wait.
Thank you I will wait. Can I expect to get that low even on my small balance of $900? Most everything I have read has leaned towards lower balances not accepting less than 40% settlements.
They keep trying me to make a small payment to prevent charge off for a month and also to make multiple payments against a 65% settlement over a few months. I continue to tell them I only have a lump sum and can’t make payments .
I generally see small balance accounts settle for more on a percentage basis. I also see exceptions.
Hello. Thanks for all of your information. I currently have 3 chase CC’s totaling about 23K. I have always made my payments on time. I have paid off the CC a few different times over the past 5 years and have run into a wall now. All three are maxed out and just making the minimum payments with interest rates around 16%. I would like to get this paid off through settlement. The best approach is to I assume just stop paying. Is it possible to call Chase and say I have run into a hardship and cannot make my payments any longer. I would like to settle at 40% of my current balance. Telling them I have talked with a credit counselor and BK lawyer. What are the odds that would work vs. just stop paying and ignore them for a few months?
The odds are zero. You cannot get a good settlement from Chase with out becoming the statistic they treat a certain way. That means many months of payment default.
I closed my business last month, I have a Chase line of credit with a current balance of 80k with a personal grantee.  What can I do to settle this at a lower amount? The business is closed but I don’t want my assets garnished or my credit score tarnished.
You typically have to stop paying in order to settle for less. With Chase, you will often get the best bank for your settlement dollar by being late 6 or more months. That can impact your credit score in a very meaningful way. If your credit score is more important than resolving the debt you will not want to settle.
Chase is not suing currently, and they would have to sue and get a judgment before your assets were at risk.
Hi I have a 14.500 credit card bill with chase I have never been late but I can not get this bill down I have very good credit I do not won’t to file bankruptcy is there a way to negotiate this bill down and close the account
You can settle the balance for less with Chase, but that is typically going to mean falling several months late with payments. That means your credit scores will be hit for a while. Is that something you are okay with?
Sorry i need to add that in 3 months i willhave 6,000 should that be offered as a settlement. They said they will be reporting every month to the credi bureau the status.
How long until you have 3k?
I have a charge off with chase freedom cc after 125 days of being late. They sent me to their recovery department. Total is 12,000. I was on their repayment plan to catch up got sick and was not working for 2 months. They offered me a settlement of 9888 and wanted 549 a month. Could i negotiation a smaller pay out. They did say it was still early charge off just happen on Jan 4, 2017.
Fill out the talk to Michael form in the right column Roxana. I will email you to set up a time to connect on the phone. Done correctly you can see as low as $3,000 (ish) on that settlement.
Hi Michael….
I have an account with Chase for approximately $25000. Most of this debt was incurred by my ex-fiance who refuses to pay me back what he owes me. Because of him I am in financial ruin and my credit score has gone from 820 to 495. I have not made a payment to Chase in over a year. I joined a debt relief firm that promised me they could negotiate the debt down on my behalf but they have made no progress on this in the past year. I am considering canceling my program with them and trying to settle with Chase on my own. I recently lost my job and was diagnosed with cancer. I have no savings with which I can pay them now. I am wondering if settlement agreements are ever allowed to be paid out in monthly installments or if they always require a lump sum all at once? I desperately need to find a way to resolve this so I can get out of debt.
I also owe $7000 to Discover but I have a hardship agreement with them to repay the amount over 5 years at 0.99% with a monthly payment of $143.
Any advice you can provide would be much appreciated.
How much have you got saved up with that debt relief firm right now?
Have you received any collection notices from anyone other than Chase, and if so, what is the collection agency name?
Assume for a moment you were able to settle with Chase for 8k. How long does that take to come up with?
Add the 8k to settle Chase, and the 7k-ish total you will be paying over time to Discover. Would you consider filing chapter 7 bankruptcy if you could knock that 15k down to 2k?
I would like to settle my chase debt that is several years old. it went to two different credit card collection agencies and when I tried to settle with the last just a few days ago, they no longer had it. Its about $7,000 and hasnt been paid since about May of 2013. I called the phone number they provided and it was not an active #. Next steps?
Contact Chase and find out if they have it warehoused or out with another debt collection agency. You can negotiate the settlement directly with Chase if they have it internally, or settle with the collection agency once you learn who it is.
How much are you prepared to pay to resolve the 7k balance?
they were offering 1200 in 3 payments. I should have taken it then.
I am not confident you will be able to settle it for that low anymore if Chase warehoused it. I see them hold steady at 40% in some of these cases.
Hi Michel hope you had a nice thanksgiving. I recently got a letter from chase on two cards stating: if you stop paying on the balance liquidation program the account will be written off as bad debt and reported to the credit reporting agencies as “charged off”. We may have other solutions available to you. If your financial situation extends beyond your account with us and you need a more comprehensive financial solution we can help connect you to a credit counseling agency . I have missed two payments and want it to be charged off so it goes to a collection agency at that time I will try to negotiate 30%. Is this a true statement? Or should I call Chase and try to negotiate now based on the letter?
If it were me, and my goal was to negotiate a settlement on my 2 Chase accounts, I would not respond to the letter. I would be waiting for my opportunity to settle for the best savings, which right now, is with a third party agency after charge off for most of us.
Michael, I am a single woman, 75 years old living on social security benefits of $1074 monthly. I have not been employed for several years and do not receive any other retirement benefits. Since being diagnosed with Non Hodgkin’s Lymphoma two years ago I have been living with my son and his family. I have an older RV that I hope to live in part time soon.
My assets are: 2006 Travel Trailer. Value around $6000.
2007 Honda CRV. 168,000 mileage. $5,000 to $6,000 Value
Savings acct – $15,000
Checking acct – $1,200
I owe Chase Credt Card $9,000. Original amount was about $23,000. I have been paying the minimum each month now for many years. I am never late with the payment and overall have very good credit but I can no longer continue to pay this monthly payment. I have been thinking I could just stop making the payment as I have no real assets or offer to settle with them for a one time payment of $1800 (20% of debt). What would you recommend I do? I might mention that this money was used to help a family member. They were going to pay it initially but have been unable to do so.
Your input would be greatly appreciated.
Settling with Chase requires you to be late with payments. To save the most money you will likely want to wait until your account is charged off and sent to a third party debt collector. This is at around 7 to 8 months since you last made a payment. And this is where you can target 30%, and sometimes a bit lower.
Settling at 20% of the balance on Chase accounts is just not that common anymore. You can get close to that when done right though.
Your credit will take a hit from this, but it will bounce back.
Hi Michael,
My sister has $9,300 in unpaid credit card debt with Chase from 2009 and I’m trying to help her settle it. When she called they said they no longer negotiate unpaid debt because of an agreement made in August 2015 with their debt collectors. Doesn’t sound right so I am going to call the recovery department’s direct line to discuss it. Will they allow me to negotiate on her behalf? Additionally any other questions I should be able to answer other then her personal information. I watched your helpful video about being prepared to discuss the hardships one had that led to the accumulation of the unpaid debt. Any guidance is greatly appreciated.
Thank you!
Is Chase still showing on her credit reports?
When was it that she last paid her regular minimum payment to Chase?
I might skip any effort to settle depending on your answers.
As for the credit report, It was showing up as of 2 years ago.
Last payment was made 11/2009.
Thank you!
A debt with Chase that has not been paid in 7 years is either off her credit reports now, or will be in 5 to 6 more months. For many, there is little reason to tackle old debts like this.
What is the goal she is trying to accomplish by settling her Chase account?
Thank you, Michael! The goal is to get the debt off her Credit report and repair her credit so she can begin building up her credit again.
I would first confirm she stopped her regular minimum payments in 2009, and then just let this fall off. Settling now means paying a good chunk of money. I might use that same amount of money to set up a secured credit card with Discover or a different bank.
Thanks Michael! Yes, I have confirmed payments were stopped in 2009. If that is the case, is it possible to get that removed from her credit report eventually? Want to be sure she can restore her credit and begin building it up again without this looming.
Thank you!
It should come off no later than 7 and one half years from when she stopped paying back in 2009. You do want to monitor the situation to make sure it does. You can dispute that with the credit bureaus if necessary.
I have 3 credit cards totaling $44,863.27
I am current on all 3 cards, paying the monthly minimum, but am living with little to no margin and the debt increases each time I over draw my bank account as my overdraft draws directly to my credit card.
What are my options? I have a small retirement account I could draw from but that would incur huge penalties.
Two of the cards are with Chase totaling $26,000 and $18,500 with Bank of America.
Fill in the talk to Michael form in the right column of this page Bruce. When I get that I will email you to set up a time to connect on the phone and go over alternative ways to pay settlements to Chase and BofA. You have more time than you may be thinking.