Avant provides credit cards and personal loans at varying credit limits. They also provide varying methods for keeping your payments on track if you are in a financial bind. If you cannot get a hardship payment plan that fits your monthly cash flow, we can often settle with Avant for fifty percent or less of what you owe.
The ideal time for you to call Avant yourself, and talk to them about payment flexibility, is when you are barely late. I cover why being late, even just a little bit (a day or three), is so important in my hardship payment plan article. It boils down to your account fitting Avant’s internal criteria to approve the best interest rate reduction, and for the longest period of time.
Avant is typically going to be their most generous with lower payments, and for longer, on their credit cards and not their loans. They sometimes offer the reduced payments for up to five years on the credit cards, which is about as long as any bank offers those plans.
Lower repayment options on Avant loans, when you are in a hardship, can be hit or miss. And the fact that Avant loan balances can be many multiples of their credit card limits (as high as 35k), the loans are harder to keep up with compared to the credit card limits they offer. If Avant will only reduce your monthly loan payment by a little bit, or for only a few months (which can often be the case), you may want to think about an alternative.
What to expect when settling with Avant.
Most lenders have policies for settling your unsecured debt for less than what you owe. Avant settlements follow some familiar patterns in this regard, but with some notable differences. One thing making settlements different with Avant is their willingness to lock in a settlement earlier than other lenders.
When settling with major banks in the US you tend to only get a few months to pay the settlement if you reach your settlement in the first 6 months of late payments. When settling after 5 to 7 months late you can often target the ability to pay your settlement over as many as a few years.
Avant, at least of late, is allowing the longer payments on settlements earlier than the typical American bank. The earlier settlement option is not terribly important with a lender that is not known to be overly aggressive with suing its customers, which Avant is not at the time of publishing. But it can come in handy in certain situations, such as when you have many different lenders to settle with, all of whom may have different policies and procedures for doing so. And my experience is that most people have more than just Avant to deal with. Let’s get serious about this MAJOR topic.
What is so critical when negotiating many accounts?
It is no longer safe to simply settle one account at a time as you save up money to fund each deal. Many creditors are being extremely aggressive with suing people to collect. While Avant is not one of them, you may have multiple creditors that are. This means you will need to be super strategic when setting up who to settle with, when, and for how long, if you want to maximize your savings and stay out of court.
The goal we have with everyone we work with is to map out a settlement plan that will get you the best savings, and the longest time to pay, if you need it. Most of us do need the longer time to pay our settlements, as we are not flush with cash and running short each month. Avant makes it easier to coordinate multiple settlements at a time with many different accounts.
I highly recommend scheduling a call with me to talk about what your settlement strategy will look like based on all of your unsecured balances and your monthly cash flow. It is a free call and can be scheduled by clicking the call with Michael box at the end of this article, or the Get Help tab at the top of the page.
I do go into more detail about settling with Avant, and negotiating accounts simultaneously in this video:
Avant and filing bankruptcy.
Your unsecured Avant loan or credit card is typically eligible to be discharged in a chapter 7 bankruptcy, or to be placed in a chapter 13 repayment plan.
Chapter 7 is the version of personal bankruptcy you would want, but you have to be able to qualify based on your income being low enough for the number of people in your household and state that you live in. If you do qualify for chapter 7, check out my article comparing chapter 7 to other debt relief alternatives before you do anything else. It may shock you to learn how much total relief chapter 7 provides, and how quickly your credit can bounce back.
Chapter 13 bankruptcy is different. It can often be viewed as the worst debt relief option, and for the reasons I point out in the above linked review. Settling your Avant, and other unsecured debts, is often going to be a better, more flexible alternative to chapter 13.
Avant on your credit reports.
If you fall late with payments to your Avant loan or credit card, you will certainly see the 30, 60, 90 day etc., late pays on your TransUnion, Experian, and Equifax reports. Once a debt has reached a point where it is killing your credit scores, I would give more consideration to the debt relief alternatives that eliminate your debts the fastest. That means debt settlement or chapter 7.
If you enroll your Avant debts in a debt management plan with a nonprofit credit counseling agency, and before you were reported 30 days late, you can likely avoid any meaningful credit damage.
You may not get a new credit card when you are on a debt management plan, though that is not always the case these days. But you can get a car loan, mortgage, even personal loans from some outfits, while on your DMP.
If we settle Avant debt with the bank or the collection agency they use, your credit report will be updated to show a zero balance owed within a month or so after you complete your settlement payment(s). Your credit can bounce back fairly quickly after collection accounts are reported as zero balance and resolved. It is not necessary to get paid collections removed from your credit in order to get a mortgage, car loan, or new unsecured loans and cards. Too many people get hung up on deletions when they are unnecessary to being able to move on with your credit and goals.
If Avant sells your defaulted loan or credit card to a debt buyer, Avant will show a charged off debt with a zero balance after the sale, and you can expect the debt buyer to show up on your credit reports with the balance now owed to them (sometimes we can prevent the debt buyer credit reporting when acting to resolve the account quickly enough, and depending on the buyer). Yes, Avant staying on as a zero balance negative while the debt buyer then shows up with a balance owed, is normal and not considered double jeopardy credit reporting. I wish it were different, but that is the system we have in the US at this moment.
Once you settle with the debt buyer, any credit reporting the debt buyer is furnishing to the bureaus will be updated to show a zero balance, or completely deleted (by those debt buyers who have a removal policy – as the larger debt buyers in the US do).
Avant is not considered a high risk to send you directly to a collection law firm to sue you. That risk, at least at this time, will enter into your equation when debt buyers get a hold of your loan. And while pretty much all debt buyers sue to collect debt these days, there is no reason to allow that to happen if you are motivated to resolve the debt and have even marginal resources to work with.
You can schedule a call with me to review your options to deal with your Avant account using the tab directly below, or the help tab at the top. You can also post your Avant questions in the comments below for feedback.
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