Debt Settlement Company & Getting out of Charge Off

[noncommonsense]

Here’s my situation:

I had about 8 cards and couldn’t pay my bills because the minimum payments were way too high & had personal problems in my life that led to financial trouble. After looking for a solution, I found a debt settlement company and they told me they can help me settle my debt & I would only have to pay 60% of my total debt. Timberline Financial told me to stop answering the collectors’ phone calls and to let them handle the rest while I make a monthly payment/draft to a 3rd party savings account. 

I have been making payments and they send me a letter saying Discover accepted my settlement offer for $1700. I was happy knowing that I’m handling debt 1 account at a time. 

However, I just recently spoke with someone and he told me that my company screwed me over. Paying off debt is not going to remove derogatory items on my report and that its better to declare bankruptcy and not pay for it.

At this time, some of the accounts have been sold to collection agency. However, 2 of my AMEX accounts just send me a mail regarding their offer to settle for 50%. Should I call my creditors back and work out a plan with them? How do I settle a Charged-off account & have them remove the bad/negatives off of my account? 

What’s the best solution for me to get out of this mess? Any advice will be greatly appreciated… Thanks!

[Anonymous]

Paying derogatory accounts doesn't remove them.

Most debt settlement companies don't do anything you can't do yourself, but they do tend to keep a lot of the money that you could have used to negotiate debts yourself.

Collection agencies may approve of "pay for deletion" on deleting the collection if you pay for it, but it won't affect the original chargeoff it that's still reported.

[Anonymous]

Bankruptcy is a legal matter.  Because of this, I would contact a Bankruptcy Attorney.  Your finances are about as unique as your fingerprint and only an experienced legal professional can give you legal advice on such a complex issue.

[marty56]

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@Anonymous wrote:
Most debt settlement companies don't do anything you can't do yourself, but they do tend to keep a lot of the money that you could have used to negotiate debts yourself.

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I hate the Siriusxm commerical that says you have the right to settle your debts for less then you owe and most CCCs don't want you to know that.  IMHO they are worse then collection agencies.

[Anonymous]

Haven't listened to the radio in probably 10 years, haha!  I remember those ads 10 years ago.  I did get "free" SiriusXM with the cars I bought this year to rent on Turo but never subscribed so now I get 5 identical letters every few weeks from them offering me a deal.  If I'm ever in the car I listen to podcasts I download, wonder if those podcasters will ever run credit rehab commercials, ugh.

I researched those things 10 years ago and the basic premise is you send them money, they keep the money, they don't pay your CCs and let them chargeoff and then they try to negotiate.  Seems dangerous, risky and ridiculous.

I've worked on a good negotiation plan for folks in the past, but every bank is different and in some cases you have to call 10 different people to ask for help before finding the right one.

Honestly the best results I've seen is when people file bankruptcy before they go 30D.  I don't know anything about BK and how they pulled that off, but when folks did that they recovered VERY quickly.

Except most were back in bad debt again very quickly.

My debt management plan is the total opposite of 100% of plans out there, but I feel like it has the best results long term and short term.