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Established Member
analyte
Posts: 17
Registered: ‎02-09-2008

Best way to approach CC to settle for 50-60% of total?

[ Edited ]
I've been reading for the past few days how to handle this situation.

I got into problems because I closed a $25,000 limit card due to non-use. Since it was my longest running card and highest available balance, my credit score went into a tailspin. Within months all my other CCC had raised my good APR's to 29%+. When my mistake was made all my scores were 720+.

It is now almost three years later and my scores are 485, 491, and 570. I have had alot of late payments over the past few years with a few 90 day lates. I didn't go to debt consolidation as I felt comfortable handling it myself. I'm to the point that all my cards are payed off except for two, Sears and Chase.

I have $2000 on my "closed by creditor" Sears card that had a $3300 limit. I also have $10000 on my "closed by creditor" Chase card that had a $8800 limit. The chase is behind 3 months as they continue to raise my minimum payments to the point I can't keep up. I ask for a payment plan to get caught up, when that's finished they start cranking up the minimum's again every month until I'm in trouble again.

I have some cash on hand from the sale of my home I would like to pay the cards off. It's not enough to pay the full listed balance on each so I'm hoping they would settle, especially Chase, for a 50-60 percent lump sum of the balance as PIF. Neither are at a CA, but the Chase is in collection now. Is it possible to pull this off? The balances on closed cards are already hurting me so I can't see it making it worse.

My plan is to:

1. Call and discuss a partial lump sum payment as payment in full.

2. If they make an offer, write a PIF letter asking for a official letter stating the deal is excepted before payment is made by cashier's check.

How does this sound? What if they won't work with me on a lower lump sum payment? Any other advice?

Thanks!



Message Edited by analyte on 02-10-2008 08:14 PM
Established Contributor
gdtobefree
Posts: 536
Registered: ‎01-24-2008

Re: Best way to approach CC to settle for 50-60% of total?

other CCC had raised my good APR's to 29%+.
 
Got to love those uhh hummm people and Pres Bush, he gave them the ability to do this.
 
On the accounts that are paid off, do you have any lates on them?
If you do send them a GW letter and see if they will remove the lates.
 
The fees for being over your limit and late are KILLERS, they stick to you one way or another.
I am sorry but I just don't believe in CCCS  or any agency to help you through this, in my past expereince they wanted me to do things that would make the situation worst, like giving back a practically new vehicle and owe 1000's and buy a junk car, uh duhhhhh.
 
You can handle this yourself!
 
If it were me, I would send the OC a PFD letter offering a % you can afford if they remove it from your CR OR remove any lates, AND show the account paid in full satisfactory.
 
In the morning there will be other people that will post and offer a better solution, remember this is what "I" would do.
I know there is a way to stop all the fees and I would demand that ALL fees be credited back to the account up until the closed by grantor date. In other words if your balance was 1000.00 the day they closed it then that is the amount would would pay from MINUS all their bull crap fees.
 
Established Member
cardkeeper1
Posts: 31
Registered: ‎01-09-2008

Re: Best way to approach CC to settle for 50-60% of total?

  Well, the positive aspect of this is that you have cash on hand to deal with it immediately.  The negative aspect is that there are no gurantees.
 
  You are right.  Settlement companies take a huge cut in the end.  And if you have to get on a payment plan with them, they will never work.  They won't tell you this but it's true.  You just don' t have enough time, after you include their fees, to get anything done, paying what you can afford.  My belief is that they shouldn't be in business.
 
  It won't hurt to send them an offer yourself and cut out the middle man.  Be nice about it and non-threatening.
 
  Tried to settle a Discover card once with their attorneys.  Forget about that.  No deal.  Within a few months they moved to sue us and take us to court.  Wife got a judgement against her and now she's paying back the full amount at 9% simple interest, plus their attorney fees they tacked on to the balance.  Not every place is willing to negotiate.
   Make your first offer low.  Like 25% and go from there.  If you let them know you have 50-60% on hand, they'll want 80%.   Maybe try 25% up front and tell them you'll do a payment plan to pay another 25% over 6 months.  This only works if it's went to collections.  If it's still with the ccc it won't happen.
 
  At the end of the year, you'll need to fill out a form 982 for the IRS if it works.  Whatever amount of debt they forgive you is classified as "income", even if they just eliminate fees and interest.  You'll get a 1099-C in the mail.  Just be ready for it.  If your assets greatly exceed your liabilities, the form may not work for you and you get screwed paying a lot of taxes on BS.  
 
Good luck.
Scores from myFICO-6/08/09: TU- 668 EQU- 676 EXP-?

Scores from myFICO- 3/17/08: TU- 599 EQU- 623 EXP- 602
Established Member
analyte
Posts: 17
Registered: ‎02-09-2008

Re: Best way to approach CC to settle for 50-60% of total?

I just got off the phone with Chase. I tried the lowball method mentioned above asking for 35%, but they came back at 50% off to settle. I can do the 50% as stated in my title.
 
The only thing is the want me to commit to the 50% today in order to release a letter to me stating basically that I pay 50% of the balance within 10 days to close account as paid in full. They also said they will then report an r5 to the CRA where an R1 is perfect and a R9 is bad.
 
Ok, do I now want to send a PFD letter to Chase asking to pay this amount since it was there own offer? If the PFD is accepted would that give me an R1? What if the PFD is denied? Also, I've never heard the R codes before.
 
Please advise on my next step.

Thanks
 
Established Member
analyte
Posts: 17
Registered: ‎02-09-2008

Re: Best way to approach CC to settle for 50-60% of total?

Any input/comments on my next move?
 
1.  Pay the 50% settlement proposed now? Afterwards try to GW them to remove past baddies?
2.  Try to GW or PFD Chase now to see if they'll take the settlement and delete my baddies?
 
The only reason this seems good to me is that I'll have no CC balances after this, and then I can start rebuilding my credit through better utilization. I know this settlement will hurt short term, but is there any other option looking long term?
 
 
Thanks

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