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How settling my debt has worked for me and what I learned

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  • How settling my debt has worked for me and what I learned

    I read a lot about people wondering if they should file for bankruptcy or try and settle their debt for less than what is owed. I have been dealing with my debt problems for over 2 years resulting from medical issues with my wife that caused her to be out of work for a time and then once she went back to work, the company she worked for closed. As a final insult my pay fell by about 30%.

    For several months I depleted every dime of my savings trying to keep up with payments.

    This was my first mistake. When the writing was on the wall, I should have stopped making payments immediately and kept my money. I should have waited until the CA's were ready to settle and done it then. By making payments I did nothing to reduce the debt I owed, I was just padding the credit card company's pockets with high interest rate payments. I spent thousands of dollars keeping it current, when I should have been focused on getting rid of it.

    Not filing for bankruptcy may have also been another problem, but I am not sure about that. Essentially, when things went sideways on me I had about $70,000 in credit card debt. With my income, I would have likely been very close to a 100% repayment, which would have put me into a debtors prison for 60 months (in my mind).

    I decided finally that I would start calling my creditors (most of which were with collection agencies by this time) and telling them there was no way I could possibly pay them anymore. They tried to get me to take lower payments, but none would do much.

    So, I decided to stop paying anything and just wait. After about 60 days some sent me settlement offers, other just made more threats. After about 120 days they went to CA's and that is when I started letting them know the ugly truth about my situation. I did my best to make them think I was circling the drain financially (which I was), and that not settling with me was a real bad idea.

    I noticed that B of A and Citi were willing to settle, others like HSBC and Capital One would not budge much and both have sued me and my wife on different occassions. I settled my first account with Citi for about 50% in 2008, but I settled my B of A account last month for about 25% of what I owed. I have settled four Capital One accounts for about 75% each, but they were all pretty small.

    One thing I made sure I did, and I think it was the right things to do, is that I got my stuff settled before I worried about my wife's. She had little income and suits against me would have hurt us more if they went to a judgement. Getting credit back on solid footing at some point will be important for my family. None of our unsecured credit was joint.

    Another thing I have learned by mistake...put nothing in both your names if it can be avoided. Our cars loans are only in my name and our credits cards are individual, not joint. The only joint debt we have is our mortgage. This has helped when I call on behalf of my wife and let them know that I know I have no obligation to pay, but I am will to "help."

    The one thing that I know for sure, if you don't have the money to pay on a settlement within 2 or 3 months, don't even bother. You are better off filing for bankruptcy if you don't have the cash. Trying a debt settlement company or any other arrangement is just puting off the inevitable.

    I am still dealing with about $10,000 in debt that is down to the wire. Capital One tried to serve my wife today, but she is out of town for a couple of days visiting her sister, I will see what I can do about this tomorrow, but they are on another planet a CapitalOne.

    The final thing I have learned I mentioned a few moments ago: certain creditors will sue your a$$ in a hurry and you might want a plan for them before you start with others. Also, if you owe $1,000 you are more likely to see a lawsuit fast than if you owe $10,000.

    Well, that's my $0.02...
    Take $10 billion from the government and then sue me...nice

  • #2
    How did you calculate your % payback at 100%?
    As legal advice must be tailored to the specific circumstances of each case, and laws are constantly changing, nothing provided herein should be used as a substitute for the advice of competent legal counsel.

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    • #3
      The one thing that I know for sure, if you don't have the money to pay on a settlement within 2 or 3 months, don't even bother. You are better off filing for bankruptcy if you don't have the cash. Trying a debt settlement company or any other arrangement is just puting off the inevitable.
      That is the key. I think too many people head down the DS road or get sucked into DS companies that put them 36 month payment plans to try to raise funds without really thinking it through; they put tactic (DS, BK, etc) ahead of the strategy (get out of debt). For many people, going down the DS is road is like planning to "drive" to Hawaii. As I have said in previous posts, if you can't raise the cash to settle within 12 months or less from the when you stop making payments, settlement is not for you. Also, you need to do a comparative analysis of your options, the ONLY time I recommend settlement is if for some reason a BK would end up costing more.
      Last edited by HHM; 03-28-2010, 06:23 PM.

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      • #4
        Originally posted by optimistic1 View Post
        How did you calculate your % payback at 100%?
        I met with four different attorneys, they all came up with 100% payback.
        Take $10 billion from the government and then sue me...nice

        Comment


        • #5
          Originally posted by HHM View Post
          That is the key. I think too many people head down the DS road or get sucked into DS companies that put them 36 month payment plans to try to raise funds. As I have said in previous posts, if you can't raise the cash to settle within 12 months or less from the when you stop making payments, settlement is not for you. Also, you need to do a comparative analysis of your option, the ONLY time I recommend settlement is if for some reason a BK would end up costing more.
          BK would cost me more...
          Take $10 billion from the government and then sue me...nice

          Comment


          • #6
            One other thing that is critical...get everything sent to you in writing before you send a dime.
            Take $10 billion from the government and then sue me...nice

            Comment


            • #7
              Agree...I missed my second payment with Citi and they offered a 48 percent settlement. I don't have it up front but have two weeks to call and make arrangements. If they are willing to take monthly payments I would be happy with that. I will call and find out. They have been the only one to send anything in writing, and the only ones to offer up a settlement offer.

              BoA has done nothing since I sent a limited C&D letter, which is odd. I did say no telephoning, and spoke with an associate who asked about email which is fine. Snail mail and email are okay but they have done nothing. No settlement offers and am apporaching month 5 of nonpayment.

              GE sent one to a CA for strongarming purposes after 4 months though they remain control of the debt and Sams Club (also GE) sent me a certified letter threatening to send me to a CA if they don't receive a minimum payment on the due date after missing 2. I am awaiting the results of their DV, because they racked up about 30K in fines through the TCPA when I said to C&D phoning....and maybe it is time to collect though they have stopped calling finally.
              First consult: You go now, no CH 7 for you. You spent entire buffet. 13 has a 95 percent payback. (Owwwch) On to next consult....

              Comment


              • #8
                I think it would be very helpful if you shared who sued quickly and who did not. For us in various states of collections it can be challenging to figure out if they're going to sue and just trying to intimidate.
                12/2009 Stopped paying CCs; 3/10 1st suit;
                8/2010 finally served; No Asset 7 filed. 11 mos since last bal xfer
                9/22/10 60 day club; 9/24/10 report of no distr; 11/23/10 DISCHARGED

                Comment


                • #9
                  First, thanks for coming out on a public forum and sharing your experiences, it does help others who are/or will go thru the same.

                  Second, my question, regarding your GE accounts were they secured(car loan,etc) or unsecured(dept store card,etc)? can you detail how they handled the account? I'm dealing with those jerks on an ATV loan in which the ATV was just repo'd and I'm expecting a lawsuit on the deficiency.

                  Thanks again.

                  Comment


                  • #10
                    Originally posted by keptdigging View Post
                    I think it would be very helpful if you shared who sued quickly and who did not. For us in various states of collections it can be challenging to figure out if they're going to sue and just trying to intimidate.
                    Well, I can only tell you my experience. Capital One sued us on both of our accounts that were about $1,200 each. We had a $6,000 Capital One account that I settled for $3,500, so I don't know what would have happened there. From what I have seen at my court, Capital One sues, also HSBC / Beneficial.

                    I am sure eventually the others would have sued at some point, but I am not seeing that as much. If you can't settle and can't pay you should just file for BK. Get it over with.
                    Take $10 billion from the government and then sue me...nice

                    Comment


                    • #11
                      Originally posted by scsurfer View Post
                      First, thanks for coming out on a public forum and sharing your experiences, it does help others who are/or will go thru the same.

                      Second, my question, regarding your GE accounts were they secured(car loan,etc) or unsecured(dept store card,etc)? can you detail how they handled the account? I'm dealing with those jerks on an ATV loan in which the ATV was just repo'd and I'm expecting a lawsuit on the deficiency.

                      Thanks again.
                      No GE account here...thank God!!!
                      Take $10 billion from the government and then sue me...nice

                      Comment


                      • #12
                        Originally posted by jwmc1 View Post
                        No GE account here...thank God!!!
                        Lol, yep just realized that, saw FLYINBROKE's response and my question needs to be directed to him...

                        Comment


                        • #13
                          Thank you for sharing your story...I am going to request other stories. I'm trying to learn as much as I can about this process.

                          Comment


                          • #14
                            GE is hanging. I am going into the fifth month with one, they sent it to a local CA to strong-arm me. The payment was to be made to the GE address and they were still sending me bills. I think they figured a local CA would be scarier. I am in Texas so I am not scared of much since I have nothing they can take. I sent a DV and a limited C&D closing in on 30 days; they persisted in calling constantly for about a week and a half then stopped. I am thinking of making some easy money off them (and maybe getting rid of their debt.) Since the OC hired the CA to play enforcer I have to find out if the OC can be held liable too.

                            The second GE is a Sam's Club, and just went past a missed second payment. They sent a certified letter threatening to send me to collections. Have not taken their calls, but when I took calls from GE #1, they refused to put any payment plan in writing. I told them I could not pay a plan without a plan in writing. Said they could email me a plan.

                            From my court systems, Chase is sue happy as is Crap 1. Discover is another. Bank of America and FIA seem to look for assets. GE has not sued anyone since early 2009, and it seems a lot are dismissed (they like small claims court a lot.)
                            First consult: You go now, no CH 7 for you. You spent entire buffet. 13 has a 95 percent payback. (Owwwch) On to next consult....

                            Comment


                            • #15
                              So if they sue you, can't you just then declare bankruptcy?

                              Or does the lawsuit stand?

                              Comment

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