Settlement offer: 15% of 75,000 with B of A?

[tyfoon]

TyFoon: Just wondering about Sears? Was that a visa card or a Sears store credit card. If it was a store card did Sears want to pick up their stuff?

The Sears gold MasterCard was really a Citi credit card (if not Citi was some other credit card company). The GM Card was HSBC. No one wants their stuff back as far as I know.

[flyinbroke]

My cell for this purpose is a prepaid. Too bad, it is still a cell phone and still under TCPA rules since I told them to quit calling any number they had on file for me.

As for offers, don't have cash in hand and no one made decent repay offers that they were willing to put in writing. I won't do banking over the phone, and I won't do anything that is not in writing. The CC companies taught me that much...

[DYLAN150]

TyFoon: Just wondering about Sears? Was that a visa card or a Sears store credit card. If it was a store card did Sears want to pick up their stuff?

[tyfoon]

I am going into month 4 with FIA/BOA and thus far I have received no offers to settle. BOA sent a letter "pay in full by 3/17." Spoke to them on the 13th, told them to quit calling (mail and email are fine) per Texas law. I have received nothing at all from them since. I am diligently checking the county courts just in case.

Ditto for GEMB; they contracted a CA to strongarm me into paying them and thus far they have only managed to rack up about 40K in FDCPA, Texas' debt collections act and TCPA violations by calling my cell constantly after I DV/C&D'ed them (not counting the "private" calls that come in within a minute of them calling their listed number). I am sitting back and letting them gather enough rope....and then will fire off a letter to both them and GEMB's general counsel. Bet I can make them go bye-bye.

Citi has called a lot (I am going on 60 with them) but when I return calls I can't get anyone thru their extensions. May have to send a no phone letter, and ask what options they have for me.

Sounds like a real pain. I never gave out my cell phone number or office number. Turned off ringer on home phone too. But I would call back if they left a message. Also, I made the offers. Offered everyone 15%. BOA was the only one that accepted that but told me towards the end that they were told to stop accepting low settlement amounts (just what they told me, I have no proof of a change in policy). Sears and GM card would not settle (they wanted 75%-80%), wrote off my account and I had to wait to settle with the third party for about 35%.

[tyfoon]

Typhoon,

Thanks for sharing your experience. Very useful to see that there are alternatives to getting back on track besides BK. My big concerns with filing are that I am due to make about $70K over the next 3 months for a consulting project. Plus we have about $40K in checking and stock.

If I try filing Ch 7, I'm afraid I would have to give this up to the TT. This "high" monthly income might push me to a 100% Ch 13. The problem is that I have zero guarantee I can maintain that level of income let alone any income after this project is done, although there are some possibilities for other projects.

We owe $120K in CC debt, are way underwater on our first mortgage by about $100K and owe $120K on a HELOC. We're thinking about trying to do a debt settlement withh CC's in the June/July timeframe. If we can settle for 30% to 40% and be out of CC debt, we'd be happy. Also looking into a loan modification but will only consider this if we can get principal reduced.

We stopped paying our mortgage and CC about 2 months ago. I hear that 4 to 6 months is the best time to negotiate with CCs. How long did you go without paying your cards before you settled?

Thanks and congratulations about being out of debt and not having to file BK. I bet it feels great.

Stopped paying credit cards in January 2009. Finally settled with BOA and a couple of other cards in July 2009 but payments were spread over three months. Ended up settling with third parties for Sears and GM card in September I believe. They all let you spread the settlement payments out.

I am far from being out of debt.. Still owe about $130,000 in first and second mortgages on a home that is now worth maybe half that, $9K on a car that is worth maybe $6k and a total of $9k on discover and kohl's cards that I never settled for since they reduced monthly payments substantially.

Have to work on Green Tree, my second mortgage company. Interest rate way to high (10.25%) I owe more on second mortgage then first and there are more years left to pay on my second then my first (six years left to pay on first, nine years on second). I am looking to reduce my mortgage debt to so had a talk with a rep from a free financial service company named Auriton, phone 888.697.7980. They are very helpful.

[flyinbroke]

I am going into month 4 with FIA/BOA and thus far I have received no offers to settle. BOA sent a letter "pay in full by 3/17." Spoke to them on the 13th, told them to quit calling (mail and email are fine) per Texas law. I have received nothing at all from them since. I am diligently checking the county courts just in case.

Ditto for GEMB; they contracted a CA to strongarm me into paying them and thus far they have only managed to rack up about 40K in FDCPA, Texas' debt collections act and TCPA violations by calling my cell constantly after I DV/C&D'ed them (not counting the "private" calls that come in within a minute of them calling their listed number). I am sitting back and letting them gather enough rope....and then will fire off a letter to both them and GEMB's general counsel. Bet I can make them go bye-bye.

Citi has called a lot (I am going on 60 with them) but when I return calls I can't get anyone thru their extensions. May have to send a no phone letter, and ask what options they have for me.

[onthebrink]

Typhoon,

Thanks for sharing your experience. Very useful to see that there are alternatives to getting back on track besides BK. My big concerns with filing are that I am due to make about $70K over the next 3 months for a consulting project. Plus we have about $40K in checking and stock.

If I try filing Ch 7, I'm afraid I would have to give this up to the TT. This "high" monthly income might push me to a 100% Ch 13. The problem is that I have zero guarantee I can maintain that level of income let alone any income after this project is done, although there are some possibilities for other projects.

We owe $120K in CC debt, are way underwater on our first mortgage by about $100K and owe $120K on a HELOC. We're thinking about trying to do a debt settlement withh CC's in the June/July timeframe. If we can settle for 30% to 40% and be out of CC debt, we'd be happy. Also looking into a loan modification but will only consider this if we can get principal reduced.

We stopped paying our mortgage and CC about 2 months ago. I hear that 4 to 6 months is the best time to negotiate with CCs. How long did you go without paying your cards before you settled?

Thanks and congratulations about being out of debt and not having to file BK. I bet it feels great.

[tyfoon]

My Experian score as of today was 643. Not sure if i could get credit anywhere yet but appears to be an improvement.

[tyfoon]

tyfoon...how long did it take your credit score to get to 540? It would be really interesting to know what it would hav ebeen if you would have done a Ch 13 instead. Ours is weird because we have so many debts that we have never had a late pay on, then the three credit cards that are now charged off. The house had missed payments but not all at once. I am meeting with an attorney who does settlement as well as BK so owe will see.

6 months.Like HHM said above, chances are that my score would have come back quicker if CH13. I have not checked my score for a couple of months now since subscription ran out and, go figure, the credit card # on file with Equifax was no longer valid.

[HHM]

The score would be higher in BK 13

[MarieT]

tyfoon...how long did it take your credit score to get to 540? It would be really interesting to know what it would hav ebeen if you would have done a Ch 13 instead. Ours is weird because we have so many debts that we have never had a late pay on, then the three credit cards that are now charged off. The house had missed payments but not all at once. I am meeting with an attorney who does settlement as well as BK so owe will see.

[tyfoon]

As far as credit, it seems if you get the creditors to agree to report it as "paid" or whatever you can do to make it look better on your credit report (still researching that!)before you pay them, that settling could be better than Ch 13 for your credit.

I do understand totally not having protection by settling, I am just trying to weigh all the advantages and disadvantages.

Bank of America reported mine as settled. They told me exactly what they were going to do (1099c and how they reported my account). Sears and GM reported they they wrote off my account since they sold them to a third party. I disputed that since I settled with the third party but GM and Sears both said they would not change the status. One of the third parties listed the debt and indicated I settled. As a point of reference I was scoring about 720 or so before I stopped paying the credit cards. Score dropped to 450 before I settled. After I settled my score has been increasing but it is only 540 now.

[MarieT]

As far as credit, it seems if you get the creditors to agree to report it as "paid" or whatever you can do to make it look better on your credit report (still researching that!)before you pay them, that settling could be better than Ch 13 for your credit.

I do understand totally not having protection by settling, I am just trying to weigh all the advantages and disadvantages.

[flyinbroke]

Credit as we knew it is no more. People with high scores are seeing CLDs, ratejacks, closure of accounts and denials regardless of payment history. The advantage of BK to settling is legal...you do not have any law on your side if you settle (along with needing $$$ upfront, IRS liability and less than honest dealings with the CCCs.)

As for 13s, while all BKs can show for 10 years after filing, many times a 13 drops off after 7. You have paid something towards creditors. And most people who filed BK already can attest that offers for loans started rolling in as soon as they popped up in PACER.

[tyfoon]

So this is the first I have heard that the trustee will garnish your wages to pay the Ch13! Is that what happens in all Ch 13s? I sure missed that little detail. Not good!! That would so not bode well with my husband's employer! I am already really concerned because my husband must use a company credit card that he filled out a credit application for when he started there....of course he had perfect credit then. His company pays the cc bill (I think it's AmEx) but obviously they looked at his credit when issuing the card to him.

So you can be insolvent even if you have a job as long as your debts are more than your assets? We are underwater on the house by more than $100,000, owe about $110,000 in unsecured cc and loc debt, $27,000 to IRS, owe about $27,000 total on 1 motorbike and 2 cars and total worth is right at $29,000 so guess that is almost a wash. So you would be considered insolvent for the purpose of not having to pay income tax on the forgiven money as long as you owe more than you have in assets? We do not have anything is assets except regular household stuff, the house, and two cars and one motorbike.

Why are you thinking that your credit would rebound better with Ch13? Is that because you would have ultimately paid the creditors 100%? It seems your credit would still come back faster since you would not have a Ch13 on your report for 7 years. We have never been late on any of our secured accounts except the house which I just got a loan modification on.

I believe that in all cases the funds used by the ch13 trustee to pay your creditors off will be deducted from your payroll. Sometimes they want to pay your car payments to (you pay the trustee and your attorney from your funds, they are not doing anything for free. i think that the trustee gets a percent of what he pays out to your creditors so the more he pays the more money he makes.). Therefore your employer will always be notified. You should check with a bankruptcy attorney to find out for sure.

Sounds like your financially insolvent to me. I would get the IRS publication and fill out the insolvency form to make sure.

Regarding quicker rebound of credit if file ch13, I am not completely sure if that is true but have read it somewhere. Most times you will not pay back 100% to creditors under a ch13 arrangement unless u can afford it and the trustee has to approve any new credit (or new car loan) before you can do it. However, since ch13 is a legal action, it may be forgiven quicker by creditors then settling the accounts. Right now, it is very very difficult just for the average person to get credit anyway. I imagine if I had to get a car, I would have zero chance to get a loan but if I was in bankruptcy I may be able to (but the interest rate may be high).