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Anonymous
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settling debt

i joined a dmp...im kiling myself making the payment.  we had unexpected high expenses that caused me to miss 2 payments.  i thien made two payments in a row.  the dmp had to send out new proposals.   every card company is charging late fees, etc.  i missed this months payment. every creditor wanted more money because of hte missed payments, so now my monthly payment is now almost what it was before enrolling in the plan.  my question is cc's are calling and leaving messages.  does anyone think i have any way of settling the debt with them for a lower amount than owed?  if i reach a settlement, will they let me make payments on it?  i have balances that are 10-25,000 with different cards.  if anyone thinks it's possible, should i answer their calls to try and negotiate, or send something in writing?  any advice is appreciated, i'm desparate.   sorry if i posted on the wrong board, wasn't sure where to put this.
 
Message 1 of 7
6 REPLIES 6
Anonymous
Not applicable

Re: settling debt

I might be able to steer you in a different direction.  Here's my story:
Five years ago, as many aspects of my life were collapsing around me, I found myself in debt to 3 credit card companies for around $50,000.  Three years later, the bills were paid off.  I had hooked-up with Positive Return (later sued, and likely out of business, but anyway...)
 
Their approach was this:  Cancel all your cards, give us Ltd POT, and keep this script near the phone for when the collectors call.  Although I just chose to ignore the phone, the script said something like, "Thanks for calling.  Xxxxx now handles my finanaces.  You should have their info on file, but anyway, here's their number and address... Then you hang-up.)
 
So they set up a payment plan you can handle, and they don't pay anybody.  When Citbank calls them(not you), they say, "Ok, we have $2100 in the account.  Would you like to settle for that today?"  Citibank wants their 20 grand, so they refuse.  A few months later, the same thing happens, but you now have $3500.  They decline.  Eventually, they settle, and move on to the next guy.
 
Cons:
Credit line got destroyed
The smaller balances were paid off first.
They take a "cut"
My savings were maybe 20%
 
Pros:
The debt collection stuff became less of a bother-- just fwd the mail on.
Peace of mind
Actually did get "debt free" within 3 years
 
Certainly, you'd want to do some research before entering a plan like this.  Honestly, it was painful, but I feel well worth it.  What lead to my decision was:  1) I had moral issues filing for bankruptcy  2) I wanted to keep my truck. 3) Any payment plan I was offered was for more than I was already paying  4) I trusted the guy who hooked me up.
 
This was before the modified personal bankruptcy laws.  Although I am not certain, I believe freedomdebtrelief dot com offers a simillar program.
 
Keep your head up.  If you're willing to change some behaviors, there is a light at the end of the tunnel.
Message 2 of 7
Anonymous
Not applicable

Re: settling debt

Thank you.  I was reading lots of stuff online, and thinking that i could do this myself, instead of paying a third party.  who would believe that 6 years ago my cc's were paid in full EVERY month and i had a credit score of 840.  I had some unfortunate (many) things happen, which caused this steep decline.  I want to fix this!  I don't want and pretty much won't even consider bankruptcy, but I just feel sooooooo overwhelmed!  My income fluctuates so much monthly, which is why I've had the hard time keeping up with the dmp.  I've cut my expenses as much as I can.  We don't eat out, kids pack lunches, cancelled the cable, etc.  I need a break somewhere and just can't find it.  I've applied for part-time work, but when people find out you own your own business, they're not interested.   plus it's hard since if someone calls in sick here, i'm doing there job as well, which means i may not be able to leave, the hours here vary so much.
 
Thanks to everyone for listening, and any other advice is greatly appreciated.  Really like to know if I have an leverage for settling with them on my own, and whether they'll do a settlement and take a payment plan for it.  I have no savings, equity or anywhere to pull a lump sum from.
 
Also, since I didn't make my dmp this month, (which i think they're going to unenroll me since this is the third payment i've missed.)  i have a couple cards with balances under 500.00.  Should I just pay them off with the money I haven't used for the DMP?  I did schedule some of the smaller dmp payments on my own online witht he OC.
 
Also, what does ", give us Ltd POT," mean that fatdumphappy posted?  sorry for being ignorant
 
Thanks again.
Message 3 of 7
Anonymous
Not applicable

Re: settling debt

typo.  Power of Attorney
Message 4 of 7
Anonymous
Not applicable

Re: settling debt

Just wanted to repost this part to see if anyone else has any advice or suggestions.  I know things easily get shuffled down the pile here.   I didn't read anything on Sunday, now I'm behind about 4 pages.
 
Thanks again!
 
Thanks to everyone for listening, and any other advice is greatly appreciated.  Really like to know if I have an leverage for settling with them on my own, and whether they'll do a settlement and take a payment plan for it.  I have no savings, equity or anywhere to pull a lump sum from.
 
Also, since I didn't make my dmp this month, (which i think they're going to unenroll me since this is the third payment i've missed.)  i have a couple cards with balances under 500.00.  Should I just pay them off with the money I haven't used for the DMP?  I did schedule some of the smaller dmp payments on my own online witht he OC.
 
Message 5 of 7
Anonymous
Not applicable

Re: settling debt

I have read somewhere that you can ask the CC's for a hardship plan, I dont know the meaning of this but maybe someone else will speak on it.  Also, it can never hurt to call and ask for a settlement or lower interest/ payments.  You will need to go higher than the CSR more than likely.  Ask for asupervisor if you do not get help from the CSR.  Wishing you the best of luck.. Tks Vicki
Message 6 of 7
SmartCookie
Valued Contributor

Re: settling debt

Usally with a DMP, your cc's are closed.  It might be the best thing for you if you get out of it from the way you are explaining everything.  Once a card is closed, the full amount is due immediately (unless DMP) so it is very doubtful that they will now make arrangements.  This doesn't mean none will so I encourage you to call the companies and explain that you are pulling out of a DMV and you would like to arrange monthly payments.  I'm sure some will.  It would not hurt to tell them if you did not understand that your account would be closed and see if they will re-open it.  This is not necessary but now is your chance and I would not pass that up.
 
For smaller balances, settle with a PFD if there are derogs on the account as there seem to be.  Try to actually settle as in 'legally less than full' if you can.  Whether you offer a settlement or a PIF you can still combine it with a PFD.
 
For larger balances it seems like at the moment it would be too much to settle, so I hope you can get a decent payment arrangement.  If so, they will usually bring down the INT a lot.  Down the line, as you approach the last 6 months or so of payments... if you can manage to get them all together offer a PFD so you can have a chance of having the derog info all gone as well.
 
Get out of the DMP if you can right now, do what you can to fix it on your own... you can always get back into a DMP in the future if needed.
EQ 787 EX 781 TU 737 11/17/07 *** I am not an attorney. If I was, I might not clip coupons. If you want legal advice, consult an attorney. If you want my personal opinion, feel free to consider my posts***
Message 7 of 7
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