topic Re: High CC debt on SSD - settlement on payoff possible? in Rebuilding Your Credit

High CC debt on SSD - settlement on payoff possible?

RowenMyBoat — Tue, 22 Jul 2025 02:49:11 GMT

Hi, I am on Social Security Disability and have gotten myself over my head in credit card debt.

~$15K debt about 10 accounts that include Visa's, MC's and several store cards.

I called to discuss bankruptcy options with several attorneys. I have memory issues and this was several months back so can't remember specifics, but as I have equity in my home, bankruptcy really wasn't an option. Something about they can't garnish wages on Social Security so the creditors option, if they so choose would be to put a lien against my home. I don't care about that as I wouldn't be here and my children, at this point in time, would still get something.

My husband receives Veterans Disability pay (he chose not to file for SSD too) and wants to take out a personal loan to pay off the credit cards. The credit cards were opened in my name only. Due to his PTSD, we have separate homes about 20 minutes apart. Those last two things might not matter.

What I am wondering is before my husband gets a loan to pay them off, should I call each creditor and ask if they would be willing to lower the balance I owe and settle for a lesser amount if I were to pay them off? Any experience appreciated.

Re: High CC debt on SSD - settlement on payoff possible?

ptatohed — Tue, 22 Jul 2025 05:34:15 GMT

Your question is a good one and I always recommend that the first course of action is to work directly with the creditor. Call, tell them your situation, ask if they have a hardship program, if they can lower your rate, put you on a payment plan, or any other programs to help you catch up. Many times they won't take you seriously until you are defaulting though (I wouldn't expect any balance reductions if you are current, but a rate reduction can certainly help). But, yeah, start with your current creditors. Stop using the cards (the creditor may even require you to close your card). $15k isn't that bad, you can do it. In the meantime, send bigger payments to the highest %s, while meeting all minimum payments. Good luck!

Re: High CC debt on SSD - settlement on payoff possible?

GZG — Tue, 22 Jul 2025 05:31:29 GMT

are the cards delinquent?

I would not expect to be able to ask for a settlement unless you choose to let the cards charge off or go seriously delinquent

Re: High CC debt on SSD - settlement on payoff possible?

ptatohed — Tue, 22 Jul 2025 05:37:37 GMT

@GZG wrote:
are the cards delinquent?

I would not expect to be able to ask for a settlement unless you choose to let the cards charge off or go seriously delinquent

Lol, I was editing my post to add this, while you were posting this one.

Re: High CC debt on SSD - settlement on payoff possible?

RowenMyBoat — Tue, 22 Jul 2025 20:09:41 GMT

I am current on all the cards or may have been missing a due date by a day or two over the last few months.

So most likely I have to screw my credit score even more by getting behind in order for even a chance of a settlement? My credit score has slowly tanked as my utilization increased. My husband gives me money every month, but two years ago he was diagnosed with Stage IV NPC due to the toxins from the burn pits in Iraq. He was stressing over saving as much as he could, so I used my cards more, rather than asking him for additional money when I needed it, which is what got me here.

He is doing better than we ever hoped but if something happens to him, I might like to move to a condo closer to my daughter, so I don’t want all the negative info on my credit report.

Sounds like the best thing for my credit is to simply pay them off with a personal loan, then my utilization issue won’t be an issue and my score should increase again. I don’t think any of the CC’s are less than 26% but we will shop around on the rate for a personal loan.

I guess the ultimate question is do I let them all fall behind and try to settle them all for less, and do I have any idea what they would settle for? 50%, so I’d be saving $7K on the balances, and I really have no clue but don’t think they would settle that low, so I’d be creating all the bad stuff on my credit for $3-4K? I don’t think it’s worth it to let everything fall behind to save $3-4K.

If I’m not behind, should I still call CC’s and ask for a reduction on the total if I pay it in full? If so, I don’t even know how to begin that conversation.

I appreciate both of your replies! Thank you!

Re: High CC debt on SSD - settlement on payoff possible?

RowenMyBoat — Tue, 22 Jul 2025 20:13:58 GMT

No, they are not delinquent, although I have had a couple payments a day or two late over the last several months.

I replied also above, but I thank you for your reply also. Much appreciated!

Re: High CC debt on SSD - settlement on payoff possible?

ptatohed — Tue, 22 Jul 2025 21:38:30 GMT

@RowenMyBoat wrote:
I am current on all the cards or may have been missing a due date by a day or two over the last few months.

So most likely I have to screw my credit score even more by getting behind in order for even a chance of a settlement? My credit score has slowly tanked as my utilization increased. My husband gives me money every month, but two years ago he was diagnosed with Stage IV NPC due to the toxins from the burn pits in Iraq. He was stressing over saving as much as he could, so I used my cards more, rather than asking him for additional money when I needed it, which is what got me here.

He is doing better than we ever hoped but if something happens to him, I might like to move to a condo closer to my daughter, so I don’t want all the negative info on my credit report.

Sounds like the best thing for my credit is to simply pay them off with a personal loan, then my utilization issue won’t be an issue and my score should increase again. I don’t think any of the CC’s are less than 26% but we will shop around on the rate for a personal loan.

I guess the ultimate question is do I let them all fall behind and try to settle them all for less, and do I have any idea what they would settle for? 50%, so I’d be saving $7K on the balances, and I really have no clue but don’t think they would settle that low, so I’d be creating all the bad stuff on my credit for $3-4K? I don’t think it’s worth it to let everything fall behind to save $3-4K.

If I’m not behind, should I still call CC’s and ask for a reduction on the total if I pay it in full? If so, I don’t even know how to begin that conversation.

I appreciate both of your replies! Thank you!

I don't think anyone would ever recommend purposely falling behind (well, those debt consolidation companies do - but don't use those!). So, no, don't do that.

Yes, give them a call. Tell them your situation. Explain that you are not behind at the moment but you very well could be soon without some help. You can ask for a balance reduction but I doubt you'll get that. But they may give you a lower rate for a certain period of time. Some hardship programs will lower the rate if you agree to fixed monthly payments for a fixed amount of time, until paid off. Just call and ask what relief programs, if any, they have for struggling card holders. Be prepared to provide them with your income and expenses, if asked.

Depending on the results of your phone calls, you can then start looking into personal loans. Any interest in a HELOC?

Good luck!!!

Re: High CC debt on SSD - settlement on payoff possible?

RowenMyBoat — Thu, 09 Oct 2025 18:18:36 GMT

HELOC?

This is a post I made back in July so not sure I needed to start a new thread or keep this one because it has the history. If recommended I can make a new one as I would love to hear more opinions on a HELOC or whatever kind of loan the would use my home as collateral as I only have a paid off 2015 Nissan SUV in my name.

Due to my ADHD procrastinations, and some family health issues, I'm still where I was. I did apply for a personal loan in my name only yesterday through my credit union, but was expecting a no because I used my income only. Kinda laughable to ask for $12K credit card consolidation loan on a less than $40K income, right? But I did indeed get a "denied".

My husband would love NOT to have to be on the loan or co-sign. I don't know anything about a HELOC or anything else using me home as collateral? I have between $100-115K equity.

OR again, being on Social Security Disability, the credit card companies can only put a lien on my house. Just checked my credit rating via Credit Karma and it was 587, whoever they pulled it through. It used to hover around 650-670, but now that my utilization is above 90%, plus one 30 day late payment I completely missed somehow, my score has tanked. I haven't had any lates in over 8-10 years, so my mistake on that one really hurt and was frustrating.

I'm not even sure of approval with my home equity as collateral because of my income. Outside of these credit cards ($15K), my mortgage is about $600 and then I have basic utilities. Income of about $3100 a month, including what my husband gives me monthly. I am away from home for a week and would like to be face to face before talking about invoking him to get a loan. But I would love opinions on if I could get a home equity loan on my own.

Or again, let the cards fall delinquent and try to settle. On balances ranging from $500-$2700K, could anyone guess on if they'd place a lien on my home or not? Sheesh, just realized if I defaulted and they wrote them off, then I have 7 years of dealing with debt collectors. I'd rather pay on them for 4 years then deal with that, especially when they are then sold to another debt collection company and the process starts again.

Re: High CC debt on SSD - settlement on payoff possible?

ptatohed — Thu, 09 Oct 2025 18:56:00 GMT

@ptatohed wrote:
@RowenMyBoat wrote:
I am current on all the cards or may have been missing a due date by a day or two over the last few months.

So most likely I have to screw my credit score even more by getting behind in order for even a chance of a settlement? My credit score has slowly tanked as my utilization increased. My husband gives me money every month, but two years ago he was diagnosed with Stage IV NPC due to the toxins from the burn pits in Iraq. He was stressing over saving as much as he could, so I used my cards more, rather than asking him for additional money when I needed it, which is what got me here.

He is doing better than we ever hoped but if something happens to him, I might like to move to a condo closer to my daughter, so I don’t want all the negative info on my credit report.

Sounds like the best thing for my credit is to simply pay them off with a personal loan, then my utilization issue won’t be an issue and my score should increase again. I don’t think any of the CC’s are less than 26% but we will shop around on the rate for a personal loan.

I guess the ultimate question is do I let them all fall behind and try to settle them all for less, and do I have any idea what they would settle for? 50%, so I’d be saving $7K on the balances, and I really have no clue but don’t think they would settle that low, so I’d be creating all the bad stuff on my credit for $3-4K? I don’t think it’s worth it to let everything fall behind to save $3-4K.

If I’m not behind, should I still call CC’s and ask for a reduction on the total if I pay it in full? If so, I don’t even know how to begin that conversation.

I appreciate both of your replies! Thank you!
I don't think anyone would ever recommend purposely falling behind (well, those debt consolidation companies do - but don't use those!). So, no, don't do that.

Yes, give them a call. Tell them your situation. Explain that you are not behind at the moment but you very well could be soon without some help. You can ask for a balance reduction but I doubt you'll get that. But they may give you a lower rate for a certain period of time. Some hardship programs will lower the rate if you agree to fixed monthly payments for a fixed amount of time, until paid off. Just call and ask what relief programs, if any, they have for struggling card holders. Be prepared to provide them with your income and expenses, if asked.

Depending on the results of your phone calls, you can then start looking into personal loans. Any interest in a HELOC?

Good luck!!!

Yup, good advice. To be clear, I was not recommending that anyone, ever, purposely fall behind.

Re: High CC debt on SSD - settlement on payoff possible?

FicoMike0 — Thu, 09 Oct 2025 22:11:50 GMT

Ditto @ptatohed

Call the creditors, tell them a sad story, including the part that you don't want to default, but it looks bad. Ask about any hardship programs they have. Some have been known to offer very large interest rate reduction in return for fixed payments and suspend\ close the account. If you are making min payments, most of the payment goes to interest. A large interest rate drop could easily reduce your total to payoff in half.

Re: High CC debt on SSD - settlement on payoff possible?

RowenMyBoat — Thu, 09 Oct 2025 23:17:09 GMT

FicoMike0 Senior Contributor
‎10-09-2025 03:11 PM
Re: High CC debt on SSD - settlement on payoff possible?
Ditto @ptatohed
Call the creditors, tell them a sad story, including the part that you don't want to default, but it looks bad. Ask about any hardship programs they have. Some have been known to offer very large interest rate reduction in return for fixed payments and suspend\ close the account. If you are making min payments, most of the payment goes to interest. A large interest rate drop could easily reduce your total to payoff in half

——————

Thank you for the reply. I’m thinking of the alternatives…choosing to get a HELOC, defaulting, or even getting a personal loan, getting a hardship plan with lower interest is the best choice regardless.

I hate “adulting”, but I have to face it. That first phone call i expect will be the hardest. Thank you again.

Re: High CC debt on SSD - settlement on payoff possible?

LIGHTNIN — Fri, 10 Oct 2025 01:04:38 GMT

I know 15k may sound like alot, but you can do this.😉 CC debt is unsecure debt,but if you get a heloc, your worries then will be..."can I keep a roof over my head?"

Heloc are variable rates also. I would only use it as a last option.

I think your best option, would be contacting the nonprofit credit counseling agency. You don't have to do anything, just see what they have to offer. I was surprised on what they could do.

https://www.nfcc.org/

Another option, you said you receive ssdi. You can earn up to $1620 a month and still receive your ssdi. Doing that can possibly increase your ssdi check too.

If you do this path, you'll have it paid off in no time. Whatever path you take, good luck to you. Remember myfico family 🙃will listen and try to help you, as much as possible.

Re: High CC debt on SSD - settlement on payoff possible?

RowenMyBoat — Fri, 10 Oct 2025 19:12:05 GMT

Thank you very much for those kind words of support. My husband has PTSD so dealing with this he has some varying feelings, largely stress, then anger or blame at me. I am to blame but it's not easy hearing it every other day.

On the phone just now, he mentioned again, getting a loan or co-signing for me a loan.

If we were to do that, is there any reason to call the companies to ask about hardship plans?

I apologize if I'm asking the same questions repeatedly. Your head spins living with gaslighting weekly (not talking about this situation.)

EDITED TO ADD: Yours was the reply I was looking for and when I read it just now, I didn't see above the working while on SSDI.
I'm with you on the HELOC, and I think that's where IF a HELOC is ALL I could get, it would be in my best interest and default and let them put a lien on my house, so I wouldn't be at risk of losing it while I'm alive. I will call the non-profit centers before calling any of the companies. I also looked to see if there were any Veterans credit places, but I didn't have time to tell if they were non-profit or not. Many things that say "veteran" are not. Thank you again for your advice.

and to everyone else too.

Re: High CC debt on SSD - settlement on payoff possible?

RowenMyBoat — Fri, 10 Oct 2025 19:01:03 GMT

Oh, I misunderstood how much I could make over and above what I bring home. I had been looking for a preferably at-home-on the phone job, until I thought I'd already be in the category to be penalized $1 for every $2 I made. I have had this on my mind for a year, even applying for some, just to be more self sufficient and not have to rely on my husband giving me money every month. That would reduce his stress, therefore also reducing mine. Debt stresses him, as I guess it does everyone. He brings home, tax free about $100K and while he owes 3 more years on his truck, he may have one other loan for $10K, but can't remember if he's still paying that. That loan was at 15%, so half of almost all my cards, but if he did take out a loan, it would reduce his stress if I could help him pay it off. Thank you!

Re: High CC debt on SSD - settlement on payoff possible?

RowenMyBoat — Fri, 10 Oct 2025 19:10:34 GMT

“ Yup, good advice. To be clear, I was not recommending that anyone, ever, purposely fall behind.”

I completely understood this but never hurts to reiterate in case someone comes along behind and reads this thread. I have often gained much info, or had questions answered when they didn’t need to be specific to me by reading old threads. Appreciate your advice!

Re: High CC debt on SSD - settlement on payoff possible?

RowenMyBoat — Thu, 16 Oct 2025 22:02:20 GMT

I’m back, was gone pet sitting for family for week and a half and situation has changed a little. Your recommendations now would be appreciated.

I haven’t gotten up the courage to call anybody yet, but was going to call the nfcc.org place today, but not sure what to say. I am married but we live separate because his PTSD. If I call nfcc.org, since I’m married are they going to say with our incomes combined I make too much money for the creditors to do anything?

Again, I am on SSD and my husband has been giving me $1500 a month but due to some other family members needing help, that’s going to change. Will I have to give them just my income or ours? He does have cancer, but the PTSD and the stress would be the real sob story, unless I want to continue to be verbally beat-down when he’s in a bad mood. Does verbal abuse caused by my high credit card debt qualify as a sob story? Or do I need to tell nfcc.org a sob story, or only the credit card companies if I were to call them directly? For the record, he has a heart of gold, it just fluctuates. 😭
He applied for a personal loan and has about $8K he can give me to pay against the $15K credit card debt.

I do have two cards I’d like to keep that have a combined balance of about $2K, so I’m hoping if I continue to pay them, they will stay open. But question, if I have two cards through a company, and I were to try to settle one of them, but I’m wanting to keep the other one, would they allow this, or would they close both?

My question is, should I still call nfcc.org and see if they can get any of the balances reduced so that hopefully I could settle most of this with the $8K? Four of my cards have balances ranging from $2100-$2800K. Are the companies willing to settle on amounts this low?

Could I still call nfcc.org and see if they could work to get the balances down and then I could pay the $8K towards what remains.

I apologize for asking any repeat questions. My memory is horrible. It was bad to start with my due to stress it’s doubled. Half the time I can’t remember what I did last week.

Any different advice on the scenario as it is now? I do appreciate all of you who have chimed in. Truly do! 🙏🏼

Re: High CC debt on SSD - settlement on payoff possible?

LIGHTNIN — Fri, 17 Oct 2025 21:17:19 GMT

@RowenMyBoat wrote:
I’m back, was gone pet sitting for family for week and a half and situation has changed a little. Your recommendations now would be appreciated.

I haven’t gotten up the courage to call anybody yet, but was going to call the nfcc.org place today, but not sure what to say. I am married but we live separate because his PTSD. If I call nfcc.org, since I’m married are they going to say with our incomes combined I make too much money for the creditors to do anything?
What NFCC will do for you, will look at each CC debt and will advise you on ,what options are available for you.
I don't know the policies at NFCC, pertaining with a married couple living in 2 separate residents. That is something y'all will have to discuss.
Meaning it depends on, if you deal with your finances separately or are they combined somehow.

@RowenMyBoat wrote:
Again, I am on SSD and my husband has been giving me $1500 a month but due to some other family members needing help, that’s going to change. Will I have to give them just my income or ours? He does have cancer, but the PTSD and the stress would be the real sob story, unless I want to continue to be verbally beat-down when he’s in a bad mood. Does verbal abuse caused by my high credit card debt qualify as a sob story? Or do I need to tell nfcc.org a sob story, or only the credit card companies if I were to call them directly? For the record, he has a heart of gold, it just fluctuates

Would not recommend telling a sob
story, they only want to give you advice and options about your debt. 😉
I'll check back later, to answer the rest of your post.