creditsettle Posted October 30, 2008 Report Share Posted October 30, 2008 Hi first timer here, wonderful site!Like it says, I have 45k debt and wondering when best time to be delinquent is. I was thinking of saving up while paying just minumums in order to have cash to negotiate with. I have 16 accounts to settle. Few thousand here and there.Also, like those credit settlement companies put your account into a "trust" so the creditors can't "see" your money as you save, can I set up a trust myself? Is this even important?I talked to two settlement co's and now want to settle myself and both settlement co's referred me to Rocky Mountain bank to set up a trust so anyone know about this bank or are there others or is this "trust" thing unnecessary, and maybe just save it in your regular bank......Thanks for your answers! Link to comment Share on other sites More sharing options...
willingtocope Posted October 30, 2008 Report Share Posted October 30, 2008 You're wise to avoid the debt fixers...one way or another they'll screw you. In fact, you really can't beleive anything they tell you...they do not have your best interest at heart.And, welcome, by the way.There is not reason to set up a "trust"...although if you're going to try the "save up" route, you might want to keep it in cash under your mattress. The reason that debt fixers even suggest this is either they control the account (and collect the interest) or they know that there's a good chance that you'll wind up being sued by one of your creditors who will try to seize any bank account.In general, "settling for less than the full amount" is only slightly better than declaring bankruptcy. It sticks on your credit report for a long time. In fact, the BK route at least stops all the collection hassles you're going to have deal with.Have you looked into the "hardship" programs your creditors offer? Link to comment Share on other sites More sharing options...
creditsettle Posted October 30, 2008 Author Report Share Posted October 30, 2008 Thanks for the reply!no I havent looked into the hardship route yet as I am still current on everything but would like to settle. but I will look into it.I was thinking of keeping current as I save up. Is that a decent route?As to my credit, it's about to be destroyed anyway because I am now newly delinquent on two "subprime" mortgages after tropical storm fay flooded one of them and i am completely upside down on the other one.so i thought settling out following the advice here might relieve a heck of a lot of debt, since my credit will be bad anyway.do you think that's a decent strategy?thank you so much! Link to comment Share on other sites More sharing options...
creditsettle Posted October 30, 2008 Author Report Share Posted October 30, 2008 so basically the strategy proposed is.... paying just the minumum, then go delinquent only after have "settling" cash saved up then settle before court happens.also I was thinking of letting it go to collections first so as to possibly settle for even less. I don't care about phone calls or credit dings at this point i will be cash based totally after this for buying and i dont need a mortgage for the long forseeable future at all.!!!what would you think moderator? Link to comment Share on other sites More sharing options...
willingtocope Posted October 30, 2008 Report Share Posted October 30, 2008 Although I am a moderator, think of me as just another member of the board offering advice from experience. (Us moderators are really more policemen, than "resident experts").If you've got the extra cash to save and still make minimum payments, I'd suggest that rather than looking for a way to settle, you look for a way to pay these guys off as quickly as possible. Use your extra cash to pay off the ones with the highest interest rate first...then whittle away at the rest.If you do try a route that winds up "settled for less than the full amount" not only to you wreck your credit, you wind up paying taxes on the difference. That's just not a good way to go if you can help it.(And, collectors have no more influence on the settlement process than the OC. Plus, that another whole gang of shisters and theives that you really would rather not deal with). Link to comment Share on other sites More sharing options...
creditsettle Posted October 30, 2008 Author Report Share Posted October 30, 2008 Oh man thanks for the answer.Well I was thinking... wouldn't it be better to pay tax (let's say 25% tax) on the forgiven debt instead of 100% which is simply paying the whole debt? I mean wouldn't that result in paying far less actual money?Would that be better or am I missing something?Also, again would it be better to let it go to collections to negotiate a better deal?Thanks so much to all of you this is a real help to a lot o people! Link to comment Share on other sites More sharing options...
willingtocope Posted October 30, 2008 Report Share Posted October 30, 2008 No, collections does not get you a better deal. Depending on the creditor, their first collector may be a lawyer with a law suit.And, yes, if you can settle for 50%, then pay 25% tax on the other 50%, you do wind up paying less...but...if you're not very careful in getting the settlement in writing before you send money and the settlement doesn't stipulate that they won't resell the balance, you might wind up paying more than 100% in the long run.Its possible...in fact they're a "stickie" around here somewhere on settling. All I'm saying is...in my opinion...if you've got money to work with, your much better off paying in full. Put your extra cash into paying them off quickly. Link to comment Share on other sites More sharing options...
Denita Posted October 30, 2008 Report Share Posted October 30, 2008 deleted Link to comment Share on other sites More sharing options...
creditsettle Posted October 30, 2008 Author Report Share Posted October 30, 2008 Ok I see very good point.I see the importance of getting them to write clearly after they deal with you (before collections, of course now that i see why) that they will not sell the remainder of the balance to some collections agency after that .I see how dealing with the original creditor is very valuable.One last question....for now..... is .... If this goes to collections somehow, let's just say...then can you still go back and deal with the original creditor somehow? or is it just too late and now you have to deal with the collections agency from here on out?thanks again willingtocope! Link to comment Share on other sites More sharing options...
willingtocope Posted October 30, 2008 Report Share Posted October 30, 2008 Collection agencies don't buy debt. They only work on commission for the owner of the debt to hassle you. Eventually...like maybe years later...the original creditor may sell the debt to a junk debt buyer...who will then hire another CA to hassle you.So...right up until the debt is sold, you can always take the attitude that "I don't deal with CAs...if you want my money, the OC will have to deal with me directly." Link to comment Share on other sites More sharing options...
creditsettle Posted October 30, 2008 Author Report Share Posted October 30, 2008 Ah very good info, it's so good to know more about how the situation works before starting to do something. thanks again willingtocope! Link to comment Share on other sites More sharing options...
Recovering Attorney Posted October 31, 2008 Report Share Posted October 31, 2008 I'd bone up on the thoughts of Mary Hunt and Dave Ramsey, as both offer strategies and philosophies about paying down debt and living debt free. You may find solace and some wise counsel in both. Link to comment Share on other sites More sharing options...
popart Posted November 8, 2008 Report Share Posted November 8, 2008 debt reduction sounds good, and this site has an article on it. want to make sure. salespeople say anything! any advice? please Link to comment Share on other sites More sharing options...
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