Settling Credit Card Debt

Have they gone into default?Are they in good standing.If their in good standing i would pay them down to under 10%.Chase and BOA are bulldogs at times on settling their accounts.

 

Paying the balance down to 10% of your credit limit.Lenders like to see that And you can take it down to 5 or 2.5%.It shows you know how to handle credit.

 

I believe credit card companies generally won't do this unless the account is seriously delinquent or has been sent to a CA. I have never heard of a credit card company "settling" an active, current account -- but stranger things have happened.

I suppose in today's economic climate, you might be able to send them a letter explaining that your budget is about to break and asking if they can freeze interest if you pay everything off in 2-3 months. Not sure that'll work, though -- good luck.

 

I just read something recently that some companies are, in fact, settling on current debts. I think BoA was one of them.

It can't hurt to ask, I guess. At least maybe they'd lower the rate and minimum payments to help you out.

 

credit card companies are settling accounts at a record pace, but I have not heard anything about them settling while current. (I work for a debt settlement company) What I can tell you is that if you do settle for any portion other than the full balance it will be reported as, "debt settled for less than full balance" on your credit report. It will stay that way for 5 years. This is seen as a negative mark if there is more than one account that states this. In some instances you can have a clause inserted into your settlement letter that makes the credit card compay report to the credit reporting agencies that the account just has a zero balance and account is closed.
With that amount of debt you may be better off using a debt settlement company that is REGULATED by USOBA. (however I am bias since I work for one) But people always say, "Debt settlement has a negative impact on your credit score."
Wow. Big deal! Pretend it's two or three years from now. Would you rather still be in debt or be totally free of debt? Pick one please, because you can't have both. All debt reduction programs have a negative impact on credit scores. That's why only people who truly can't keep up with their bills should go into one of these programs. But it's pointless to worry about your credit while you're being crushed with debt. That's like worrying about how the yard looks after your house has burned down.
Good luck and feel free to contact me if you have any other questions.

 

My experience with these companies....

Take it for whatever it's worth. I had a Chase account that I had transferred about $7,000 to just before I went delinquent on all my payments. By the time we settled, they were calling that balance $7,700 with all the interest and fees. We settled it for $2,800 (36%). I don't know why this would be but I think it's easier to settle a balance if you're transferred it to a company than if you ran up the balance on them with purchases/withdrawals. At least that's what somebody at Discover told me one time. Chase was pretty easy to deal with. They didn't bust my balls too hard at all. I called them up with an offer and they rejected it...then they started negotiating against themselves until we got down to $2800 paid over 4 months.

Bank of America has been a huge pain in my behind. The balance there was $13,500 and I had had the card in good standing for over ten years. Then, all in the sudden I stopped paying on it. I must have been one of their favorite customers up until then. I don't even want to think of how much interest they took from me over the years on that high balance. They were the first creditor to hire a lawyer on me. We haven't been able to settle that one yet, but they offered to settle it for 1/2 almost immediately.

In any event, you're probably going to have to go delinquent or they'll just prefer to keep charging you 24% interest for the rest of your life.