Settling each of your credit card debts successfully, and for the best possible savings results, follows a simple formula. The formula is 2 parts math and 1 part timing. The best debt settlement deal available to you with each of your debts can be a moving target when the math (the money you have available to settle) moves your timing. You will sometimes have to adjust your expectations for the deals you can get based on how long it’s been since the credit card was paid; whether your bank has charged off your account, sold your account, or placed it with a collection agency.
NOTE: This post is part of our Debt Settlement Guide. If you’ve missed any of the previous content, or would like to start at the beginning, please see the links at the bottom of this page.
I covered this in more detail in the previous article about winning the debt settlement race. The math involves the lowest amount each creditor or debt collector will settle for, combined with your ability to come up with that amount of money all at one time, or spread out over several months.
In order to get the math to work in your favor, you want to have good timing.
You Must Have an Inability to Pay Your Bills
A basic fact about settling debt is that no settlement will occur with any creditor until there is a proven inability to pay. There is no proof you cannot pay until you actually haven’t paid. Which brings me to some housekeeping:
I cannot instruct you to stop paying your debts. Your decision to do so is your own. Most of you reading often had, or have, no choice in the matter. Running out of money before you run out of month is good like that. I am here to inform you of the consequences and opportunities that will occur along the way.
The decision to stop paying bills is not one that should be treated lightly. If you have concerns about falling behind with a creditor, post about that in the comments below. Lets talk about how you can navigate your concerns with details specific to you. There are often customizations you can build into your debt settlement strategy that will better suit your situation, or the outcome you want to reach.
Because debt settlement typically only begins to be an option after you have missed making the minimum payments due for 3 months in a row, the debt settlement process, once started, can have irreversible implications.
If you have fallen behind with your credit card payments temporarily, and are able to get back on track with some form of normal monthly payments – look into a credit counseling service, or talk to your credit card banks about any internal hardship repayment plan they may make available to you.
Understanding the Basics of Debt Collection
Any bank will be able to tell you that not everyone they loan money to will pay it back. It’s a certainty that is known before any lender opens their doors. Now, add to that the fact that the US economy is credit-fueled and debt-based. Debt and credit is how we roll. This means our entire spend and borrow system must have a debt collection function built into it.
The fact that not everyone will be able to repay their debt gives rise to the multi-billion dollar yearly revenues that the collection industry feeds on.
The debt collection process starts with the attempts your creditors make to collect from you when you miss payments. Your banks collection efforts are centered on how to “lose the least”, while third-party debt collection efforts are centered on how to make the most.
Banks have the option of accepting less than what you owe before they fully mark down your account as a loss. When banks charge off a debt (account for the loss), they will typically do one of three things with your account:
- Assign your debt to a debt collection agency.
- Place your debt with a collection attorney.
- Sell your debt to a junk debt buyer.
Most Banks Offer the Best Deal Based on Timing
Credit card banks will, on average, lose less by collecting what they can from you before they drop your account into one of the three collection buckets mentioned above. That’s why banks settle credit card debt. Not because they’re nice. It’s just math to them.
Take a break from reading and watch this video, where I quickly hit on all the reasons why timing your settlements is important to you and to your bank.
Your credit card debt may be a source of enormous stress for you, but it is an accepted and planned-for statistic for your bank. Just like I am focused on helping you figure out the math that works for you, banks will focus on math that works for them.
Throughout the debt settlement guide, I make references to collection stages. Here is what I mean when I refer to the different stages of collection:
- 1st stage debt collection is when you are dealing with your original creditor. This is generally within the first 6 to 7 months of having not paid your credit card bill.
- 2nd stage debt collection is when you are dealing with a contingency, or an assignee debt collection agency, collecting on behalf of the bank. This means the creditor still holds the debt. Your account was not sold.
- 3rd stage debt collection is when you are dealing with a debt buyer. A debt buyer is a company who has purchased the legal right to your debt.
- 4th stage debt collection, aka “late stage collection”, means your account has been placed with an attorney licensed to practice law in your state, or when collections have reached the courts.
When you commit to negotiating debts for less than the full balance owed, there are often good reasons for settling credit card debt directly with your bank during the first stage of debt collection. It does not matter if you are settling your own debt, or if you hire someone to help you. I want you to understand why, depending on the banks you are dealing with, it is better for you to settle credit card debt with your lenders instead of waiting for your accounts to get sent out to a collection agency, or sold off to a debt collector.
Settling Credit Card Debt Fast – Benefits
Depending on the banks your credit cards are with, there can be benefits to settling with some as early as possible. Some of those benefits can include:
- The best savings (lowest settlement deals) can be had by negotiating with your original creditor.
- Settling early means the account does not get placed in one of the collection buckets that were described in the prior section.
- You can often limit the damage to your credit report by avoiding a charge-off (letting your account go passed 6 or 7 months of nonpayment).
Here are some examples of banks you could have an opportunity to settle with early:
- Bank of America
- Chase (Disney, Amazon, other Chase branded credit cards)
- Citibank (and cards serviced by Citi like Shell, Home Depot, Costco, etc.)
- Capital One
- Discover
- Wells Fargo
- GEMB and GE Capital now also known as Synchrony
- USbank
- First National Bank of Omaha
It’s important for you to understand some of the system that your credit card banks live in, and rules they are forced to live by. One part of the credit card lending system that has a large impact on how debt settlements get done in first stage collection is a not-so-little thing called “charge off”.
CHARGE OFF: The term “charge-off” describes an accounting function followed by your lenders. The meaning of charge-off does not change from one type of account to the next. But the timing of a charge off can change depending on the type of loan you have, and also due to decisions that can only be made by your lender. You do not have much influence on when your credit card gets charged off, other than making a payment to stall a charge-off from occurring (which is only something I would do for a specific strategic purpose, like needing another month to raise the money you are missing to negotiate the final pay off amount).
When it comes to unpaid credit card accounts, a charge-off occurs when the credit issuer either chooses to, or must, recognize an unpaid loan balance as a loss. And for lenders, losses are bad news, so most credit card issuers wait out the full amount of time they are allowed to charge-off your unpaid debt.
The time frame for the bank to recognize the loss on your unpaid credit card balance is outlined in GAAP (Generally Accepted Accounting Principles), and is typically 180 days of consecutive nonpayment, or what the Office of the Comptroller of the Currency (OCC is the primary regulator of national banks) calls “seven zero billings”.
How does charge off affect settling?
Understanding the timing and impact of your credit card accounts charging-off will give you an advantage in your planning and debt negotiations timing. Identifying which creditors to settle credit card debt with using your available cash flow in the first stage of collection is part of the prioritization that I cover in consults, and with clients.
You may be in a position to settle more than one account prior to charge-off. There will often be a specific design to which accounts I identify as the first, second, and third priority. Posting a basic outline of your credit card balances and who you owe in the comments below will help you get specific feedback about prioritizing your accounts. If you do not want to post to the site, you can call and consult with me, Michael Bovee, at 800-939-8357 and hit option 2, or fill out the consult request.
Settling debt in first stage collection with a lump sum, or getting payment terms with your settlement, can be the difference maker. Why wouldn’t you want to:
- prevent more than one account from charging off and going to a debt collector that may be more aggressive?
- negotiate lower pay off settlements with your original creditors if it meant you could save more money in the process?
Many major credit card issuers allow pre-charge-off settlements combined with 90 day payment terms. Depending on your situation, this means you may be able to settle more accounts prior to charge-off than if you were only settling with one time lump-sum payments.
Settling with those 3 month payment terms may also mean you can knock out a high balance credit card before your bank sends your account off to a collection agency. Settlement agreements that are allowed to be paid using installments prior to charge-off can typically only be extended to roughly 90 days. Some banks want to offer better terms, but they can’t due to regulations.
Example: You have a $9,000.00 credit card balance outstanding and the account can be negotiated down to $3,300.00 in your fifth month of missed payments (between 150 and 180 days late). You could set it up so that you make 3 payments of 1,100.00 in a 3 month period to pay off the settlement.
If you use this strategy, make certain you are confident you will have additional money to follow through on payments in months 6 and 7.
Collection Calls or Letters When You Settle Later
You WILL get collection calls! Your patience with the debt settlement process will be tested more by debt collection calls than perhaps anything else that may occur along the way. You need to know how to manage the calls and prepare yourself in advance for them. If you are behind with payments at this time, you already know all about the frequency of collection phone calls. Be sure to read through my article about handling collection calls and how to use technology to limit your exposure to them.
Why do you get so many collection calls?
Unsecured credit cards are… unsecured. Missing credit card payments is not like skipping payments on cars and homes, which can lead to repossession and foreclosure.
In the early stages of credit card collection, there aren’t many teeth behind the debt collector bark. Repeated collection calls and letters from your bank are about the only tool available to the collector (other than suing you in court), in order to get you to make a payment. Until a bank or collector gets a payment, or a plan for payments, the barking continues.
Phone calls are your friend. Certainly not all of the ones leading up to negotiating the deal, but you can literally make thousands of dollars in one, or several well planned and timed calls to your bank. But let’s get prepared with what to say, and not say, before you pick up the phone.
Continue following along in the debt settlement guide with How to Talk to Bill Collectors.
Anyone with questions or concerns about timing your settlements with your banks, and your particular situation, can post in the comments for dedicated feedback.
This Debt Settlement Guide includes:
An Expert Guide to Credit Card Debt Settlement
How and Why Banks Settle Credit Card Debt with You
Types of Accounts to Include in Your Debt Settlement Plan
Why Settling Credit Card Debt is Like a Race
How to Settle Credit Card Debt Quickly (you are here)
How to Talk to a Debt Collector
How to Negotiate Credit Card Debt Successfully Yourself
7 Largest Credit Card Banks and How They Settle Debt
Get Debt Settlement Letters and Agreements from Collectors
Paying Debt Collectors After You Negotiated a Settlement
This website has provided me an incredible amount of information and resources for me to settle my debt. Michael in-between all my not-sure-what-to-do and anxious-to-talk-to-debt-collector state had answered my questions promptly to allow me to make the best decision financially. I want to come on here to share my experiences for those who are seeking his help.
I am a high income earner who was drowned in cc debt. I paid enough to the banks to keep myself afloat until it was difficult to pay the minimal. I was around $50k in debt with Chase, Citi, Discover, and Navy Federal. I was pretty much paycheck to paycheck, so I decided to utilize Michael’s strategies to get a restart on my financials with the goal of spending the least amount of effort and time possible. Debt was a real stressor in life! So I stopped paying Chase(largest amt) and Citi the minimal. I paid off Discover due to the small amount I owed (this was against Michael’s suggestions). I borrowed money from my 401k preparing to settle before 180 days and to pay off my Navy Federal card simply b/c this was my bank with my checking account. I used the money I would normally pay the cards to pay off my 401k with 5% interest only. I settled on 40% with all my debt even though Michael thought I could do better with Chase after 180 days. There wasn’t much negotiation with Citi, I went with the letter they sent me. A few conversations didn’t land me a better deal. I had multiple phone calls with Chase and they wouldn’t budge beyond 40%. I settled the day before it turned to 180 days. I had to say that Chase repeatedly called me from a special department. Those people were nice and were not pushy. They do ask questions about your life and try to get you to cough up details of your income and your bill amounts. I made up an income amount and fake bill amount to keep my story straight. The “silence Unknown Callers” feature on the iPhone is very handy btw. When I called the number on the back of the card to settle, it was a completely different department.
Anyways, it was a sigh of relief when all that was done. Credit Score dropped 100+ points after delinquency. Took me another 6 month to pay off my 401k loan without sacrificing too much on lifestyle. Credit Score bounced back to pre-debt-settling around that time as well. Fast forward 6 month, my credit score is 50+ higher pre-delinquency. One thing to note is, you will receive a 1099 for the cancelled debt amount. So plan to pay for the income tax on that portion in the year you settle if you have large debt. It could bump you to a different tax bracket, so calculate the amount and be prepared. I stayed in the same bracket and still had to pay a couple grand extra which I had no issue paying anymore at the time.
I had a phone call and a few email exchanges with Michael and got most of the answers I needed. I consulted a local bankruptcy lawyer to inquire job security related questions due to the specific industry I’m in, none whatsoever. The lawyer also suggested to stop paying the cards to even have a conversation with the banks. Michael, thank you so much for helping me get out of debt!
Congratulations! And thank you for posting the update of your success too!
This website is a wonderful resource. It is nice to see a business that is viable and profitable, while still providing an honorable service to so many clients, and also encouraging people to handle settlements on their own when possible.
Bank of America offered a settlement with me at 30% very early on (perhaps just under 2 months late) without any negotiation.
TD Bank has been slower (started at 75% and then hinted at 65% with “manager approval”), but acknowledged that the rate will decrease each month, and they are pleasant to deal with. I suspect that at the 90 day mark they will offer 50%… which I am inclined to accept… unless there is a good chance it will go down significantly with time (I could wait nearly three more months before charge off). What is the current status of TD Bank? Is 40% generally the lowest one can expect with them? Is 50% more typical? If so a quick deal may be desirable.
US Bank has been the most annoying to work with. They had an initial early offer of 65%. After 90 days, their offer was 50%. It was a nice conversation and I did consider it, but politely declined (as it was early). I somehow answered a call from them recently and despite saying that I have the direct number of someone that I have been working with, he said “due to the age of the account you now have to go through me”. He wanted to get me on a hardship plan and said “you can still do a settlement later”.
He said they “won’t even think about” my offer and that “settlements are not negotiated”. Basically the computer tells him what it is and that is it. No negotiation. He said they absolutely never go below 45% (which seems to be not true based on reports on this website). If this guy was cool, I would have really considered taking 45% in order to get it done quickly. When he said he wasn’t even sure if I would qualify for a settlement at all, I disconnected the call with this joker.
It shows your advice is really correct about initiating a call versus accepting an incoming call. It is a totally different mindset. I also wonder if they they have different (more aggressive and manipulative) personalities working on the outgoing calls.
What is the current status of US Bank settlements for 90 to 180 days out (so before charge off)? I want to get this done, but if I simply have to hold out for a better rate, then I can.
Thank you so much on behalf of all of us that you have helped!
Thanks for post Chris.
The deal with BofA is good, but too early depending on how many accounts you have to negotiate later. BofA will update your credit reports to show you settled, which you ultimately want, but too early means your other creditors will see you have settled debt recently. Many will take this to mean you are not in as bad a hardship, and may hold out for more money when negotiating.
TD bank settlements tend to be between 40 and 50 percent just before, or after charge off, at the time of this reply.
US bank settlements are often around 45 percent right now. There are some that go a little lower, and some a little higher. You may see numbers that jump around online, but banks and collectors settle at varying rates over time, and how they see you as a collection target matters too.
Posting in the comments is a good way to get real time feedback.
I declined the offer of 50% from US Bank at the time because B of A had done 30%.
US Bank is not budging and each missed payment is adding about 2% of the balance in interest and fees. Three pay dates have been missed since.
In retrospect it seems that the 50% offer might not have been terrible because it happened so early and I now need to get to 45% to break even with their previous offer. It is difficult to know if I should cut my losses… or hold out. I assume there will be some movement just before charge off… but it is always a gamble.
US Bank has closed the account. Does this affect negotiations positively or negatively?
Thanks again!
Your bank closing an account is expected and normal. It does not change later settlement outcomes.
It is good that you brought up the reality of late fees and unpaid interest adding up over the first 6 months. It is why I try to encourage staying away from settling smaller balances if people can keep then current, while negotiating larger ones.
I also just realized that while the balance goes up approximately 2% per month on this particular account, if one ultimately settles the account for 50% it is only an effective increase of 1% per month. And it could end up as half of that with a really good settlement. So while it is a real factor, its effect is not as large as I initially thought in my last message.
In keeping with the theme of this article, there are advantages of settling early, as you describe. I was originally trying to make the case for settling VERY early… however I see that in most cases, it is certainly worth accepting the increased balance (resulting from interest and fees over 6 months of missed payments) to get the debt settlement at a lower percentage.
Most people seem to experience poor settlement offers early on in the process and receive MUCH better offers just before charge off. You have detailed this in other posts, and have some good information about optimizing the timing of the deal. I think this is very good advice and encourage your readers to check that out.
In my individual situation, one account is acting ‘normally’ in their offers over time and is progressing as expected; another account made a good offer very early with no negotiation (and made the agreement immediately); and one account in particular (US Bank) has been very strange. I was offered a half way decent settlement (50%) very early in the process (when it was barely delinquent… as soon as I missed a second payment), however they have not moved on that number at all and I have now missed 4 payments.
I suppose the advice I am looking for is whether I should wait it out with US Bank.
Thank you very much!
I typically hold off on US bank, and most credit cards for that matter, until between 150 and 180 days late.
There are some where a better deal will be had after the 6 month mark, and when external collection companies are involved.
Update: I accepted a settlement of 45% with US Bank. I could have waited one more month, to get past the next billing cycle and into the final 150-180 day stretch. However, with your reports of 45% (plus or minus) being typical, I was gambling that US Bank might only go as low as 40% before charge off, and I was about to incur 2% in interest and late fees by waiting another month (for an effective additional savings of 3%). If they were going to go down to something like 30 or even 35%, my early move was foolish. Perhaps I should have waited, but US Bank is especially annoying to deal with and I think this created some pressure for me to get it done.
Incredibly, since my BofA and US Bank accounts have been closed, my credit rating has gone UP 16 points (likely due to decreased debt utilization). I know that credit rating is the least of our concerns when we have a debt problem… but I wonder if the early settlements with fewer missed payments and no charge offs is of benefit in that regard.
TD Bank is the only one left and they are still holding at 65% at what they consider 110 days past due (although I count it as more days late than that). I plan to check again after the next billing cycle (which will then be more than 120 days out) and see if there is a reasonable offer.
In my case, all factors considered, I will settle this last account some time before charge off. The big current question: is there an offer from TD that you would jump on after 120 days? Or would you always wait until more than 150 days no matter what number they threw out after 120?
Thanks so much!
If I was not in a hurry for some reason, I would hold out until I am at 50 percent or lower when dealing directly with TD bank.
You will be surprised how quickly credit bounces back in the first 6 to 12 months after all your settlements are updated to your credit!
Once I have the third (and last) account settled… I was thinking of just paying the settlements off right then (because the funds I have to work with are in a lump). Is there any reason not to do this? Any reason I should drag the settlement payments out for 90 days on all three accounts? Once the negotiations are all complete, my thinking is that the sooner I pay off the settlements, the sooner things can start to rebuild.
That is what I would do.
Settlement payments being stretched out further is for when you need the extra time to pay settlements with each paycheck you get, or to disguise the fact you are doing other settlements, and for some of us if we need to stretch out tax implications an extra year.
Well with time I see that Michael is pretty much right about everything.
I was in a strange position of getting a VERY early (barely delinquent) low offer on my biggest balance card of 30% by one of three creditors, so I jumped on it. I was inexperienced and eager.
Card 2 was settled at 45%, although I probably should have waited an extra month and gotten it lower. It did relieve mental stress, however, and I am satisfied that I made both those deals.
The third account is TD, who is so very pleasant to deal with (compared to annoying US Bank), however they have been the hardest (smartest?) in their negotiation. Their printed and spoken offers are high, but after staying on the phone they offer 50% with “approval” from a higher up. I was holding at just over 45% and the rep even said to call back in the last month.
Well, now in the 150-180 day stretch, and some interest and fees have accrued again, and my offer is going down. I shall tell them that they should have settled earlier because I have now allocated funds to the other 2 creditors that offered better terms. I only have so much to work with and we need to make a deal. I would like to get 40% and this late in the process am not going any higher than 45%. Should I offer a round number close to 40% or 35% at the next (and hopefully final) call?
If it were me, I would stick to thirty five percent to see if I was able to get them to agree to forty.
There are more people that get stuck at fifty percent with TD bank than not, at least as of late, but I do still see some better outcomes.
Should I contact the credit card companies at all after stopping payments? Or should I wait 90 days to make any sort of contact?
Which banks are you dealing with?
BoFA, Discover, Citibank, and Chase
And also, if I manage to save enough money to pay all my debt, what’s the earliest I could pay them? I would guess 90 days, but I’m not sure.
Out of the banks you listed, Citibank is the only one I would contact to settle just after 90 days late, that would be optimized for the settlement savings.
Settling with Bank of America, Chase, and Discover, is something I would not attempts until about 151 days late.
Okay mom has some money to play with now and is focused on settling as opposed to being sued.
She has last paid on 11/3/20 the following.
5,200 Synchrony
5,300 Discover
4,600 Target
2,900 Citi
2,500 Capital One
What kind of percentages can we settle for and is there anything unique with the waiting game on these? My parents would like to try and refinance eventually with their current lender some day but I understand that would require a 2 year waiting period from the last settlement closure, correct? (I watched your video. Did I comprehend correctly?) So I’m assuming it’s better to try and settle with the creditors as opposed to debt buyers, right?
Feel free to link me to videos that I may or may not have watched already.
Bonus question if you don’t mind, she was in a 60 month 0 interest program with all of the above creditors and cancelled due to being financially crippled and needing every penny to keep the house and deciding to stop paying the credit cards… Any chance ANY of them will let her have that contract back or a similar 0 interest contract if she can’t knock out all these creditors with her money this year? Doubtful I’m sure.
Other readers may be interested in our comment exchanges that started off on the page about settling with Synchrony.
You are looking at settlements of between 35 and 50 percent on all of these.
Synchrony and Citibank settlements potentially to the lower side, with the others more commonly in the middle to the high side of that.
Settling with these banks right before charge off, which I cover in this 10 part article series you are in, and in the videos, is ideal.
If there are limited funds to work with at the 5 month late mark, I would focus on settling with Discover, Target (TD Bank), and Capital One.
Synchrony and Citibank sell to debt buyers, which you can often settle with and get a year or two to pay, making that more workable from monthly cash flow.
I would stay on top of mail in order to identify the debt buyers as soon as possible. They sue a lot, but you can prevent that by being proactive in the early days of the debt sale, and get workable monthly settlement terms of around half the balance owed.
You do not need to wait 2 years to try to refi after your settlements are complete. Where you picked that up from is likely when I talk about waiting two years to qualify for a home loan after having filed chapter 7 bankruptcy (for FHA underwriting, and three years for conventional).
I see people get home loans approved days, weeks, and months after completing a debt settlement. Many are told to go deal with a debt in order to close the loan they have in the pipeline, so it is fairly common.
Banks, in normal times, do not typically enroll people in and out of hardship plans. Many only allow one in a year period, and some only once in the account lifetime. With COVID it can be worth speaking to each bank individually about what options are available.
Thanks for all that help!!! I’ll start crunching numbers this weekend to see what’s feasible. One question. When my parents were looking to refinance before my mom had 90 day lates like 18 months in the past and the current lender used that as a reason as to why she wouldn’t qualify for a refi (I’m sure her debt was another reason but I’m almost positive they cited the 90/60/30 day lates as well) How is that any different than if she were to refinance after debt settlement? Won’t she still have those 90 day lates in her recent history on her credit report? Can some lenders deny based on “poor credit history?” Or were they wrong/ am I misremembering and maybe I should reach out and ask again? THANKS!
I suspect the late pays were not brought current at the time.
The difference with settlements being complete, and in the rear view mirror, is that the negative is showing a zero balance owed. It is a paid collection.
Here is more about getting a home loan after settling collection accounts.
Quick question as I didn’t see it on here or the linked article but I’m sure it’s somewhere in this series but I don’t have the time to search now so I apologize. If she pays Synchrony and/or Citi through debt buyers over time, how will that look in regards to refinancing after the date of the last payment? Will the charge off have extra implications?
Charge off is not going to have any additional implication in her scenario.
All three debt buyers that Synchrony sells their debt will delete their collection trade lines when you resolve a debt with them, so that will be even better.
Thanks. With Synchrony she stopped paying 2 cards but continues to pay 3 cards. (You did advise to use the same strategy for all Synchrony cards months ago but we didn’t listen because we were paranoid of the $15,000 and the property lien so we wanted to keep paying some and not get sued for everything) Now that it looks like she can settle everything (especially if we get another stimulus) I think she should stop paying the additional 3. Are there any repercussions of a 2 month lag between the non-payments for synchrony cards? If we pay them off before it gets to the debt buying phase can we contact them about multiple cards that we had stopped paying at once like TJX and JCP or do we stick to one card? I’m assuming one card unless they contact us first and we have their secret synchrony debt collection number? Thanks!
Actually I just ran the numbers and I think she’d definitely need to do extended plans with Synchrony and or Citi to make that work. Definitely couldn’t pay everything off all this year. I’ll go do some research.
Debt buyers do decent payment plans, so my prior comment about staggered settlements still applies to any recently delinquent accounts.
You can wait months in between settlements with the same bank. That will not create an issue with negotiations.
Some banks have pulled the less delinquent accounts forward in order to settle those with the ones they have that are more late.
Others prefer to only settle the later ones, and encourage you to call back in a few months to settle more (or make offers on the more recent ones that are not as good as they could be later).
3 cards with chase total 27,000. Reasons, Divorce, ex husband used my cards unbeknownst to me he was court ordered to give me 5,000 towards it which He did. I had back surgery can’t work. Home foreclosed on and living with family until I get on my feet. I offered chase 8,000. I explained all of this and they said no deal. I am currently charged off with them in collections. What can I do?
We can help you get this resolved. You can click the get debt help tab in the upper right corner of the page and create your user profile (secure and private), and when you get to the part where it says schedule to talk with an expert, bring up that calendar and pick the day and time you would like for me to call you to go over this.
So interesting reading. I have some debt that I am current with Boa Card, and Wells Fargo Card, O Interest card for 14 months I am managing this debt okay. I opened up a Chase Card for my son because he had bad credit and needed a card to travel for his Job. Because of his bad credit I had to get the card and have him on the card as an authorized user. Well he maxed it out on 3 months and I closed the account I never used the card at all. He is now working again, and will to help with this debt. Unfortunately they are charging me 25% plus interest on the card. The debt is $17,000 and I’m 45 days late on paying the full monthly amount . I though if we did a settled term debt and offered $300 or $400 per month for a year that they might bite at it. I have had good credit all my life pay all my bills auto deduct , however my credit slipped from 730 to 650 since i opened up this chase card. There’s lots of scammer’s out there that charge an arm and a leg. Any advise would be great I’m trying to protect my credit score and get it back to 750 but feel if i don’t do something soon it will be to late. Chase told me to pay $200 per month for 4 months and then they would look at a Hardship case, but i don’t think i want to go that route. Is there away to improve my credit ? and what are your fees
You would immediately want to catch this account up if your focus is all credit score. DO not let it fall another month behind.
If you are trying to settle the account, it will hurt your credit score more than it is already, and you will likely want to be several more months late if you are tryign to settle for the best savings.
We can help you with the settlement if you need it, and we charge nothing until we are done, and you pay the deal we get you. Your negotiation service fee is 15% of what you saved in the settlement.
Mr. Bovee;
I am a disabled veteran who can no longer afford to juggle all my debit from active duty. My income is VA Disability as well as social security, I believe in my state (Virginia) that means I am non garnishable. I was wondering if this is something I should bring up to the debt collectors to make them want to settle faster or cheaper.
It can be. I often want to outline the hardship scenario that caused the inability to pay then, and now. There are times when sharing with debt collectors that you are an informed consumer and know that they cannot collect from you, even if they got a judgment, is a good idea, and times where that is not going to result in anything different than if someone was not judgment proof.
Your ability to get the best settlement savings is often going to be more about who you are dealing with, that what you are dealing with.
Who are the creditors, balances, and length of delinquency on each account?
Mr. Bovee,
I have (3) “charge-off(s) as bad debt” showing on my credit reports. Ironically, enough they were all reported by Synchrony Bank (SB). The (3) accounts were originally (1) Lowes, (2) Amazon and (3) Home Depot, which I assume SB was the underlying original creditor. I have the money to pay them in FULL for all (3) accounts. My questions are:
1. How would I know if they have sold the debt yet?
2. Should I call SB and see if they will do a Pay-for-Delete (PFD)?
3. When calling in to SB do I ask to speak to a 1st line supervisor or would the 1st line even have the authority to make such an arrangement (PFD)?
4. If SB sold off the accounts already, is it too late at that point to have the original reported information removed or at least reduced to something less negative? (assuming I have paid the new debt holder either in-full or at a reduced amount).
You can call Synchrony and find out who they sold or placed your accounts with. They will tell you.
Synchrony will not do a pay for delete.
Talking to a supervisor about pay for delete is a wast of time.
Once the debt is sold you may have an additional credit report item to contend with, and there will be nothing you can do about Synchrony still.
Hi Michael,
1. My question is how will I know if my accounts are in the 2nd stage — meaning, I have received a letter from a Collection Agency that indicates that the account has been placed with them by the original creditor, in this case Bank of America. Does that mean that BOA still holds the debt and that this Agency (Gatestone) did not legally purchase the debt from BOA? I have some other accounts in which I have just received similar letters.
2. I had placed my account with a 3rd party debt settlement company. They did settle one account with Barclays. The original amount was $9,000. They settled it for $4,447; however, I paid them 22% on the $9,000 for a service fee. I have decided that this is too much money to pay them and that I would rather try to settle these accounts on my own. What is your advice regarding Debt Settlement Companies.
3. FYI, I live in Texas
Thanks for your help!
Yes, BofA still owns the debt they sent to Gatestone. Check out this video about negotiating your settlements with Gatestone.
I typically suggest people inclined to settle debt on their own to try the DIY approach. Be sure to read that article link. It is one piece of a 10 part series about settling debt yourself. Some people should get help, but I have helped tens of thousands with DIY negotiations.
When it comes to settling with BofA, if you are concerned about your ability to negotiate a 20 to 30 percent deal, call in for a consult, or fill in the talk to Michael box in the right column, and I will email you to set up a call.
Thank for this series! Im am so thankful I found CRN.
I have a question about what state laws apply to me? We have moved several times due to my husbands career. My three accounts from US Bank that are going into charge off this month were opened on CO. I stopped paying in KS, and now we are living in IA with a chance we could move again way before this debt is resolved.
What state do the take the debt collection laws from? Also what if we live in IA but have asset in CO (house)? Or if the statute of limitations “expires” because of a move to a new state?
You have plenty of moving pieces Jessica. Typically the the state you live in at the time a creditor is looking to sue you will apply. But that can change based on certain things too.
Before you focus too much on the SOL and where you can be sued, think about what you will do to resolve the debts going forward. What are the balances on the 3 accounts with US Bank? What are your goals for resolving them?
Cancer treatments have left me in financial ruins but with my life! A list is the following of cc debt that I owe.
Synchrony $12,225 last payment made 10/14/19
Citi $2370 last payment made 11/11/2019
Barclay $12,275 last payment made 12/5/19
BOA $15,430 last payment made 11/25/19
Chase $18,011 last payment made 11/11/19
Sears citi $4530 last payment made 12/17/19
Discover $12,196 last payment made 12/6/19
TD $6457 last payment made 12/16/19
Discover $10,855 last payment made 11/22/19
Discover $3189 last payment made 12/16/19
TD $8000 last payment made 11/21/19
Synchronyhome $4500 last payment made 12/10/19
BOA $22,700 last payment made 11/16/19
I have saved up $5000 to start settling debt, I have not received any offers yet, I am assuming I should start with synchrony that was last paid 10/14/19 but not sure. I am able to put aside about $1000 a month towards debt and hoping to up that to $1500 once I am back to work. I haven’t answered any of the phone calls from the banks yet. Also would it be wise to make a small payment to other cc so that they don’t charge off my debt to give me more time to save? Thanks!
We can cover all of this strategically in our phone consult this week.
Hi Michael, I just had a simple question. If I settle on my credit card after is pay off whats happens to that Line of Credit that I had with the back. Do I still have it or they take it out of my hands becase I settle with them insted of paying it all off?
I do not understand what you are asking. Please post a reply and rephrase your question or concern.
What happen to the line of credit when you settle with the bank to pay of that credit card. Does the bank take that away, can you keep using it after is paid or what.?
I am not sure what you are asking here, but any account you stop paying in order to settle is typically closed before you are able to negotiate your settlement. In the instances where that was not the case, the settlement closes the account.
If you have an LOC with the same bank you have a credit card with, and you are settling the credit card, it is fairly common to have the other open and current account closed.
Hi Michael,
Sooo glad I found your site. Hoping you can advise me on best route to take….trying desperately to clean up my credit and ordered annual reports. Wells Fargo is one I would like to tackle ASAP. My credit limit is 2000 closing balance is 2559. My date of last payment is 10/2014 but it hasn’t showed up as a collection account yet. Would like to prevent this and get this account in a better standing than its current “charged off” status. Was going to write them a letter and try to settle but watched your video and it says not to write them, should I call them instead? What is my best course of action to remedy this credit card debt? Btw I live in Florida.
Thanks so much in advance
I would call to negotiate the settlement with Wells Fargo, but get the agreement from them in writing before you pay it. They can mail or fax a settlement letter to you.
Located in California and Losing my job, so will no longer be able to pay credit cards. Would like to settle. I can probably keep making payments on the 2 smaller accounts if that will be less harmful to my credit, Is it best to just stop making payments on the Discover, or on all 3? Also, do I bring up the topic of settlement after a few months, or will they reach out to me? I have family willing top lend me some money to get rid of the debt
Discover:$ 14,000
Citi: $4,900
B of A: $2,500