Never, Never, Never,Never, Never, Never,Never, Never, Never,Never, Never, Never,Never, Never, Never, EVER give them electronic access to your checking account. Ever. A money order tomorrow is as good as a check today. If they are willing to settle for 20% then trust me you aren’t their highest priority. It’s the collectors JOB to make you think everything hinges on TODAY…but it’s not true.
Tell them exactly this or you’ll regret it: “I’ll accept your offer of a FULL SETTLEMENT for $xxxx . BEFORE (Before, yes before….BEFORE!) I send you any money I will need a written settlement agreement from your company showing that after I make these payments for 6 months (NOT via electronic funds transfer..NEVER, EVER) the account will be settled in full and closed.”
Then don’t accept anything else. This is is ONLY way to successfully handle this situation. I’m trying to be so clear and persistent that you’ll not make the mistake of doing this on their terms so they can clean out your bank account electronically the next time you deposit a paycheck. They will….they will…they will. Then what will you tell the police “Someone I owe $1000 to took $1000 from my checking account!”??
Be firm, be fair, be safe. And watch this video about debt settlement:
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.
Someone asked what was wrong with giving the account verbally since they can pull the same info off the written check. Here is the difference.
When you write a paper check, you have put in writing that the payee can only get the amount written on the check and this draft can only be made once.
When you give verbal approval, there is nothing in writing, you did not record the conversation and it becomes, as Chad said, someone I owe $1k to took $1k and your word against theirs.
Here is another catch, I know Dave Ramsey is dead set against all credit cards. If you a member of any kind of club, whether it is a gym or an internet Movie rental club and give them permission to automatically draft your account, you are the one at risk. When you go to cancel and they keep taking the money, the bank’s attitude will not make you happy.
One more thing, the settlement’s asterisk comments said something about “provided no additional charges appear on this account after the date of this letter”.
Clarify with them whether any further interest, finance, penalties etc will show up if they will then nullify the agreement.
I can testify to that being true. A company told me I could get a discount if I let them automatically draft my account each month so I said ‘yes’. I agreed to one year, and 1 year only. They took it out every month but the end of the 12 months, when I had cancelled, they still took it out of my account for a total of $100 over & above the agreed amount. I called & left messages & they never returned my calls. I even sent the owner a couple of certified letters thinking he would do the right thing and credit my account especially seeing that I was a loyal customer but I was very wrong! He never responded nor did I get anything back.
I am so happy that I read these threads regarding this subject. A creditor called me this morning and asked for my debit card number so that the amount that I owed could automatically be deducted from my checking account or either given them my checking account number. If it hadn’t been for the group, I probably would have given it to them, which I did not and they were forced to accept a check after my payday. Thank you, thank you, thank you!
I just received a fax letter from BoA for $.20 on the dollar. To be paid over 6 months. They are demanding a check over the phone for the first payment. Should I pay this? Is this settlement a binding agreement? I dont want them to come back and say I owe the full amount.
well .20 cents on the dollar isn’t bad and paid over six months that is good too most people want it paid in 30 days. I think i would do it. tell them to send the agreement in writing.
NEVER, NEVER, NEVER, NEVER, NEVER (get the point?), give a creditor on a cc, mortgage, etc. a check over the telephone. Then you have given them all you checking info and they can and sometimes will tap into your account for more money, whether there is money there or not.
Here is the catch, they take another payment, what do/can you do? Take them to court? You owe them anyway.
Send money order, cashier’s check or regular, but do not give someone that kind of access. It is paramount to danger.
Just my advice.
I agree about your bank account; but also consider this … if you can find a local bank that offers free checking, open an account there and use it for times like this. It works well, that way you only have to put the exact amount needed in at the time it is needed. They can’t get money via wire if the money isn’t in the account; so don’t keep extra there (just enough to keep it open)
They can’t get money via wire if the money isn’t in the account; so don’t keep extra there (just enough to keep it open)
Actually they can. Certain banks offer “courtesy” overdraft on your account. The “courtesy” overdraft amount varies from bank to bank and does not necessarily have to be applied for.
Your account can be overdrafted even if you don’t have the money. Similar to making a purchase at a merchant, some banks will allow you to overdraw your account.
Anytime you give out your checking account info you put yourself at risk. I have done check by phone but before but as Deb suggested, I keep a very minimum amount in there. If a creditor tries to access my account it’s very easy to close that and open a new one. I use one account just for my pro rata plan and all other funds have been moved to an account that is not affiliated with any of my creditors.
Anyway, I never thought of the “free” checking account idea but I really don’t think it’s a necessity. There aren’t any “deals” that are honestly only good for “today”. They will always accept a money order unless their intent WAS to clean out your account electronically and the good deal was just a ruse.
Be wise and remember that all they want is their money…anyway they can get it.
I am about 5-6 months behind and was recently offered .15 on the dollar to settle with BoA and that account exceeded $25,000.00. Does anyone know the settlement percentages of other cards. Their balances are less than $10,000.00, but greater than $5,000.00
Bank of America
Also, BoA tracked me down for a resolution and one of their options was the settlement offer, will these other cards do the same? Is it before or after charge off that they make a settlement offer? Should I send a settlement offer to them in writing to get the ball rolling?
My total debt is overwhelming and I am in a relentless pursuit to extinguish it the cheapest way possible. Thanks for any input, this forum has been a great help!
WOW! .15 cents on the dollar! I’m impressed! I too have an account with BoA that is like $20,000…and would love to settle!
I heard BoA is hard to deal with…but some of the posts on here give me encouragement.
I too am way in over my head, with business debt, that I’m personally liable for, and personal debt, that I think the only way out is to file bankruptcy. I’d love to settle, if I didn’t have the biz debt, I think I could do it.
I’m seriously contemplating bankruptcy, ch. 13. Our service van got repo’d tonight. My husband was recently diagnosed with ADD, and he can’t handle the business anymore…he is like a non-functional person right now. He needs a job where he is expected to be there…not to get the self-motivation to get out the door. STRESS!