Category Archives: debt settlement

Re: Debt settlement – got questions

I don’t know if anyone responded back to you or not so Im going to lol. I have only read books on debt settlement, so by no means am I an expert ok. I haven’t gone through it so this is based on everything I’ve read. Debt settlement companies usually help out people who have been extremely late on their payments and who are trying to get a settlement for a percentage of what they owe. For example if somebody had 10K in cc Unsecured debt and a few others which haven’t been paid in over 5 months, then a debt settlement company can help in one huge way. The debt settlement company basically charges the individual for reducing the debt with the company setting up a payoff amount of usually 40-50% less of what you owe, which in this case would be 5K. The reasons why CC companies do this is because at least they can get something instead of nothing because with an unsecured CC there is nothing tied to the debt, like a car loan, house loan or any other installment loan. So something is better than nothing.

Now in your situation you haven’t been late on any of your payments, so I don’t think you have a very good chance of settling any debt when you have no problem paying them. On the other hand you may be considering a Consolidation Loan, where both are combined at a lower interest rate but for longer terms or years…. In this case your monthly payment is much lower, but you actually pay more in interest because the loan is for years longer. Dave RAmsey says a Consolidation Loan is a “Con”, so don’t do it.

I would pay these debts yourself and start knocking out the smallest debt first. Take everything you can and pay that off then work on the big one. If your getting a nice chunk of money here soon just pay off the first smallest bill. It’s easier to do it yourself and you don’t have to pay anyone any money for something you can do yourself. The 11.24% larger CC isn’t that bad of an interest rate. You’d be surprised by cutting stuff out of your budget how much money you can put towards that money. Have you done a budget every month? Do you know what you have coming in and going out each month? If you don’t try and see what it breaks down to, most people have no clue what they have coming in or going out. Do you have high car payments, cut cell phones, turn off more lights saving electricity, food is a huge expense for most families, coupons, eating out most of the time can add up, etcc… anything you can cut out temporarily to put more money towards your debts?

If you have any more questions, feel free to ask, I’d be glad to help you out. Your situation doesn’t look bad at all.

Debt settlement – got questions

Let me start off by introducing myself. I’m from Georgia. Married and mom to 2 kids. I have 2 CC debts totaling just under $18,000.

  • American Express @ 11.24% $10,500
  • BofA LOC @ 19.99% $ 7423

I’m not behind on any of my payments, but I’m exploring the option of debt settlement. How is it done? What are the right questions to negotiate a settlement? etc…

I’m expecting to have $6500 by April 1st or so. Some advice would help. Thank you in advance.

I am confused… you can make your payments without an issue but you still want to get your debt erased.?

First off, If you are not having an issue making your payments then you need to start by creating a budget so you know where all your money is going. Then attack one of your cards at a time to eliminate them all togehter, this will keep your credit in good standings.

If you are making your payments on time then religously every six month call the CC company and ask for a rate reduction. Tell them you are considering several balance transfer deals you have in front of you but want to see what they can do for you. Every reduction you get will help you pay off more faster, reducing your interest load.

I have never had experience with a company that helps with debt settlement, but I would imagine third party involement is going to get your cards cancelled.

Is it worth that? I dont think it is. Not especially when you can put together a simple but powerful stradegy to just eliminate it by yourself.

But those are my 2 thoguhts for the day.

You cannot do a debt settlement unless you are way behind on your payments and understand that it will negatively affect your credit score. You should berate these cc companies about lowering your interest rate. If the person on the phone does not agree, ask for a supervisor and if needed, ask for their supervisor.

If, come April, you have the $6,500, your Bank of UnAmerica bill should be down below 7k. Call them and tell them you want a lower rate or you are closing the account and paying it off. Once they lower it, send them the $6,500 and get it gone quick.

That’s my suggestion. Good Luck to you.