fedupwithdebt Posted December 20, 2004 Report Share Posted December 20, 2004 I need some advice on wher to start. I am currently about 35000 in credit card debt. Was with ameridebt but barely able to pay bills and thought i could do better on my own and not pay fee to them. In a setllement situation is it better to pay larger cards off first (as more likely to sue) or just pay the first card willing to settle for an agrreable amount. Amounts range form 12,500 to2,500. I believe i could pay them all off in 1year at about 50-60%. Also is it better to make a deal before charge-offs(for credit report) or after for better settlement deal. Could come up with 50-60% on largest card in about 5 months. Link to comment Share on other sites More sharing options...
willingtocope Posted December 22, 2004 Report Share Posted December 22, 2004 Sorry it took so long for someone to respond. Not a lot of folks visit here.Anyway...most CC companies do have a "hardship" program that will lower interest rates and allow reduced payments for some period of time...usually, a year. (You need to be very careful with this, because they might have terms that get nasty afterwards). None will settle for less than 100% of what you owe, but they might give you some breathing room. If you truly think you stand a chance of paying off your CC debt, then call each company and ask for their hardship department. See what they say. If you can get a couple of the higher amount cards to back off for awhile, you might be able to concentrate on paying the others. You really need to run a budget to see if this all makes sense.If you're hoping to settle for less than 100%, then the only way I know of to do that is to stop paying ALL of them. I say ALL because once you miss a couple of payments, they will check your credit reports...if they see you're paying someone else, they'll get nastier in a hurry. After 3-4 months, some (not ALL) will offer you settlements. If you can afford those, take them...but again, be very careful to get the settlement in writing and be sure it includes words to the effect that the "debt is settled in full and the balance will not be sold or placed for collections".If there are some that don't offer settlements, then they'll go to collections and maybe you can deal with those (see the Collections forum).All in all, expect your credit reports to take a big hit. And, if you can't put together a payment schedule that you can afford...then your next choice is Bankruptcy....remember, food, housing, clothing, transportation all take priority over CC debt. Morality aside, if you can't pay...you can't, and you shouldn't beat yourself up over it. Link to comment Share on other sites More sharing options...
fedupwithdebt Posted December 23, 2004 Author Report Share Posted December 23, 2004 I would really like to get out of credit card debt and get on with my life. I am not just trying to get out of paying but cannot afford to pay these cards and interest and still get by. I could probably afford half of what all payments are now but i have a feeling these companies wont give me 0% interest at all. Am I wrong about this. I don't know if i should call them and try to get this or just quit payiong them and try to settle later. I am not ALL that worried about my credit report because as it stands I couldn't get a loan anyway because of too much debt. Link to comment Share on other sites More sharing options...
willingtocope Posted December 23, 2004 Report Share Posted December 23, 2004 In today's business climate, its really hard to tell how CC companies will react. Seventeen years ago...at the height of Reagan's "trickle down economic plan"...I got laid off with a huge pile of CCs. I sat down, worked out a budget...with food, housing, etc coming first...then figured how much I had left over to pay CCs. I divided it up according to the balance on each, and then called each CC and said...hey, I lost my job, here's what I can pay. All but one local department store agreed. They all put me on their hardship programs, closed the accounts to new charges, and accepted what I offered. I was able to find work in about 3 months so I was able to keep the agreements. I kept in touch with them each month when I mailed the payments. It worked! Took me 3 yrs, but I paid them all off.I don't know if this would work today, but its worth a try. On the other hand, if, you find yourself without a job at all..like I now am thanks to the "tax cuts for the rich economic plan"...maybe just say screw it...take the flack for 6-12 months, and then do a BK. Link to comment Share on other sites More sharing options...
Conspiracist1169 Posted December 29, 2004 Report Share Posted December 29, 2004 How badly does a "hardship" program affect your credit? I'm still deciding between a hardship program or a consolidation loan with a co-signer. Link to comment Share on other sites More sharing options...
willingtocope Posted December 29, 2004 Report Share Posted December 29, 2004 Hardship programs are usually...note, ususally...listed on your credit report as "paying as agree" which isn't too bad. The bad news with current CCs is that the hardship program only last for a fixed period of time...like a year...and then they want full payments and may even jack up the interest rate. Its almost like they'd rather have you do BK so they get the tax right off.If you're seriously considering this, call each and ask. Don't commit to anything until you talk with all of them. It will onlly take one to blow your plan away... Link to comment Share on other sites More sharing options...
Conspiracist1169 Posted December 29, 2004 Report Share Posted December 29, 2004 I spoke with Chase about a hardship program. The girl informed me they have two programs.1) If I can't make the minimum payment each month, they will put me into a 1 year hardship program with interest around 9%.2) The other would last upwards of 5 years, again with interest being somewhere between 9 to 13%.Why they'd have two programs like this makes no sense to me.She then stated that I would have to provide an itemized breakdown of my expenses... Rent, Utilities, etc. to determine if I qualify for the program, and that I don't make too much money each month.We'll see what they have to say, according to the rep I spoke with it takes a few days for them to process the information and determine if I qualify.I simply don't understand their logic! I could quickly settle the debt for less than owed, and they'd be happy. Yet they'd make more money off me in the long run if I continued making payments. Link to comment Share on other sites More sharing options...
DocDon Posted December 29, 2004 Report Share Posted December 29, 2004 Yet they'd make more money off me in the long run if I continued making payments.Why is that so hard to understand? That is the whole business model of a credit card company.Ask them about suspending the overlimit fees too. There's a extra $30 some dollars that can to toward the balance. Link to comment Share on other sites More sharing options...
willingtocope Posted December 30, 2004 Report Share Posted December 30, 2004 Whole thing sound fishy to me. Its almost like they're trying to decide how likely you are to file BK. The 3 - 5 yr program is similiar to BK13. I would be very...very...careful. Don't agree to anything unless its in writing and be sure to read the fine print. I'm not sure its possible, but they could be trying to ensure that they don't get discharged should you choose BK.If you haven't already given them the budget info, you might want to ask for a copy of their "terms and conditions" before you provide any more data.The thing to keep in mind is they want their money...they're not concerned with your welfare at all. Link to comment Share on other sites More sharing options...
Recovering Attorney Posted December 30, 2004 Report Share Posted December 30, 2004 If you don't care what your credit report will look like, try to deal with a hardship program. Citibank will give you 5% for a year, and a payment amount you can handle, but they report you 60 or 90 days late. MBNA will knock you down to 15% and they want a higher monthly payment. Sometimes they will reage an account. All will want to rip the funds from your checking account. None will take lates off your CR. It's admirable you want to pay them off, but depending on the other things you need, BK may be a better option. As willing says, you need to take care of shelter, food, medicals, etc. More important than a CC company Link to comment Share on other sites More sharing options...
DocDon Posted December 30, 2004 Report Share Posted December 30, 2004 O.k., well, I got MBNA waay down lower than 15%, no overlimit fees, locked for 5 years.... the generousity of their hardship program is directly proportional to your account history with them. Don't expect too much if you've been 90 days late 20 or so times....This isn't to get you out from under the debt. Hardship programs are to help get you through a temporary financial situation. Regarding Recovering's comment, entering into a hardship program should not affect your credit report. I've helped numerous people get into these temporary programs, and not one was having lates reported while in the program. Link to comment Share on other sites More sharing options...
Wilco Posted January 8, 2005 Report Share Posted January 8, 2005 This is a fasicnating thread to me because I have been pondering the same question for a while thanks to my own two citi cards that are up to $24k. I'd like to pay them off, but the cost of living keeps escalating here.I went to CCCS 4 months ago and they said Citi would go to 10% at best for 60 mo's- I'm surprised to read here that they will do 5% for a year on their own. It seems CC companies do themselves a disservice by forcing people able to pay something, into BK- I wonder if they're afraid to set any precedents since nothing would stop floods of people from applying for long-term hardship programs if it were anything less than an all or nothing proposition.I've been planning on calling the retention dept. at Citi soon to see if they'll lower my rate to 10% since I've cleaned up innacurate info that has raised my score. Does anyone know if I should be calling "retention" or "harship?" My payment history is clean on both citi accounts. Has anyone written a letter instead of calling first? Thanks. Link to comment Share on other sites More sharing options...
Recovering Attorney Posted January 8, 2005 Report Share Posted January 8, 2005 If your record with Citi is clean, I doubt they will want to lower your rate. What is it now, 12 or 14% or the like. You might be better off asking Citi to consolidate your two accounts and get a break that way Link to comment Share on other sites More sharing options...
Wilco Posted January 8, 2005 Report Share Posted January 8, 2005 I think my rate is high because I looked a lot more in debt than I am since ex's accounts still had my name. Now that they're off, my hope is that I could actually get them to lower it since I might be able open an account elsewhere and transfer..but w/a 679 Fico, I don't know. I wasn't sure if merging accounts was ever done, that sounds like it would be worth making a phone call to find out. Thanks!It's frustrating that you have to damage your own credit to encourage creditors to lower a rate....missing payments for leverage or whatever. Link to comment Share on other sites More sharing options...
Conspiracist1169 Posted January 13, 2005 Report Share Posted January 13, 2005 Chase told me "no". They had me send in a list off all my monthly expenses, and then decided that I'm not in hardship.Yet the last time I called them, a year ago, I had been out of work for nearly 2 years, but they turned me down for hardship because I couldn't guarantee them a monthly payment. Rather the woman I spoke with wanted to immediately settle the account.So rather than making 15% interest off me, I'm taking a personal loan and kissing Chase goodbye. As for Chase's 5 year hardship program, the Customer Service rep I spoke with told me that is only for people who are "terminally ill".The only reason I'm not settling this debt is I'm trying to clean up my credit report.Long story short, I HATE CHASE!! Link to comment Share on other sites More sharing options...
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