A little background-I went through the DR seminars and sent letters to my creditors telling them that I would be unable to make payments for sometime. Family issues set me behind financially and I couldn’t make any payments on the credit cards. I haven’t paid them since July. I received a small Christmas bonus and sent them all $10.00.
I am a single mom with two little girls. I am in a total screw up I know.
I will get a tax refund. I’d like to call and offer everyone a settlement in full. I have read to start at 30 percent and go from there. Do I take that figure from what I owe now (with all the late fees and over limit fees)or from what I owed in July when I stopped making payment?
Do I just call these companies and talk to them about this? Tell them to put it in writing and mail it to me. Can I give them a future paydate-say Feb 15th?
Any other advice?
Your creditors will be real eager to settle with right before they decide to charge of (usually at the 150 days late mark.)
If you can work a settlement then would be a great opportunity to do so. When you deal with the original creditor you can also negotiate them reporting to the CRAs the way you want them to.
If it does go to charge off then you will be dealing with a collection agency or an attorney’s firm. CAs are easier to deal with than the attorneys in general, but not all the time.
I would not speak to any CA or attorney’s except by letter sent certified letter. At first you may wish to get their call to start the negotiations but after always by letter. DO NOT USE THE PHONE.
Start as low as you can 30% is good, but I have seen creditors settle for 20 cents on the dollar. Right now BoA is settling for that much for most of their settlements. So start very low. Don’t worry if they don’t take it, that is why the are negotiation, right?
Do not settle for more than 50 cents on the dollar.
When you do get an agreement, make sure it is in writing BEFORE you pay them a dime. Then pay only with a cahiers check or money order. If you pay by check they then have your information and they have been known to take the remainder out of the bank account. Don’t take a chance.
After they have gotten your settlement, make sure you get a letter stating that you have settled.
I too am in dire help with creditors. I am divorced with over whelming debt as well as taking care of two little kids. My ex-wife has charged so much on my credit cards, 4 total, which I am a primary holder. I have cancelled all credit cards and am now responsible for all charges made against all 4 credit cards.
May I ask, how and what sort of statements did you write to the creditors? Would it be possible to get a copy of the letter you sent to your creditors? It would be helpful to me and my future debt settlement.
I hope that this helps.