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Chase Credit Card Settlement

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Txishome1
New Visitor

Chase Credit Card Settlement

Howdy!

 

I've read across many forums that Chase will settle CC debt and I'm looking to find the best way to go about it. Here is what I've been reading. After it gets CO after 6mo late, Chase will send it to collections and that's where you can negotiate the best deal. I've seen as low as 10% settlement. Usually around 25% lately. 

Here is my situation: business shut down and I had $27k left on a $35k limit card. I can not pay the full amount at this moment and monthly payments for a year would kill me. So I'm looking to settle with them. Currently, I'm just making the min payments but the balance is not going down much as APR is 25%. This is a biz CC but I did sign a personal guarantee so I know my credit will take a hit. I'm currently around the 720 range with not a single late or blemish on my personal credit. 

I want to find the best way to go about this. I believe at month 4-6 of no payment they will try to handle it internally and may offer a settlement but after it gets to CO at month 6+ is when you can get the lowest % offer.

 

1) What should my next steps be? Just stop paying and let the process start? 

2) How big of a hit should I expect on my credit? Currently at 720 with no lates ever. 

3) Any other advice to make this as painless as it can be? I just want this behind me. I've learned my lesson and only pay with cash now. No more CCs. 

Thanks everyone in advance. 

 

Message 1 of 7
6 REPLIES 6
JoeRockhead
Senior Contributor

Re: Chase Credit Card Settlement

Welcome to the forum. I don't think anyone here can answer what Chase might accept as a settlement. Meaning there's just no reliable hard and fast table, or chart to base it off of. As far as the damage to your credit, I'd venture to guess that the CO showing up on your personal reports, in addition to the maxed out utilization penalties could cost you a hit of around 100+ points.

 

If it were me, I'd try to address this with them and work something out... sooner, rather than later.

Message 2 of 7
TheKid2
Established Contributor

Re: Chase Credit Card Settlement

Welcome to the boards.

 

AMEX and Discover sued me for a fraction of that amount, I burned them for like 8-10k each. I'm not saying that Chase will and I don't have personal experience burning them, but $27k is a lot. I would be very concerned about getting a knock on the door. Once that happens, you're settling just to avoid a judgment that will follow you and depending on the state you live they could take further action like salary garnishment once they win a court case.

 

In the end, intentionally burning a creditor the size of Chase is very risky. I would think you're best bet is calling them up for some type of hardship plan.

 

JOINED 4/2020


FICO 8 = 582, 620, 589 / Mortgage = 633, 526, 581


CURRENT PEAK *Thanks to the MF Community!


FICO 8 = 715, 711, 720 / Mortgage = 688, 696, 681

Message 3 of 7
FlaDude
Valued Contributor

Re: Chase Credit Card Settlement


@Txishome1 wrote:

Currently, I'm just making the min payments but the balance is not going down much as APR is 25%. This is a biz CC but I did sign a personal guarantee so I know my credit will take a hit. I'm currently around the 720 range with not a single late or blemish on my personal credit. 

 


I was guessing about a 100 point drop before seeing @JoeRockhead's post and I put more stock into his estimate than mine.

 

Personally, rather than trash my credit for 7 years, I would be looking into a low interest loan or 0% CC BT offers so the interest would no longer be killing me, then work to get it paid off, even if it takes 3-4 years. Since 0% offers are not that long, you might need to roll over again at some point. I know some posters here frown on that, but I've done it and it worked for me. A few years back I had 75k of CC debt, 2k min payments, almost 1k/mon interest. Between a combination of loans and 0% BT I got it down to 200/mo interest. It still took over 4 years to pay off but at the original interest rates, would have been much longer.

Scores: March 21 FICO 8: EX 810, TU 808, EQ 813
AoOA: closed: 36 years, open: 25 years; AAoA: 11.8 years
Amex Gold, Amex Green, Amex Blue, Amex ED, Amex Delta Gold, Amex Hilton Surpass, BoA Platinum Plus, Chase Freedom Unlimited, Chase Amazon, Chase CSP, Chase United Explorer, Citi AA Plat, Sync Lowes, Sync JC Penney - total CL 145k
Loans: Chase car loan (35k/6yrs 0.9%)
Message 4 of 7
West9023
New Member

Re: Chase Credit Card Settlement

that is what I have done, defaulted on 3 cards that are now 150 days late, my score dropped about 150 points at the first month and has gone up 75 points since then already. Everyting else is still paid on time.  

 

when it gets sold I will pay for the deletion.  

Message 5 of 7
JoeRockhead
Senior Contributor

Re: Chase Credit Card Settlement


@West9023 wrote:

that is what I have done, defaulted on 3 cards that are now 150 days late, my score dropped about 150 points at the first month and has gone up 75 points since then already. Everyting else is still paid on time.  

 

when it gets sold I will pay for the deletion.  


The way you explain it, sounds so simple. Basically, default, then just wait for it to go to a collection  agency. At that point, you can just negotiate, then pay for delete... and it all goes away.

 

If it were that simple, default rates would be even higher than they are. For clarification, COs and collections aren't one in the same.  First, you have to count on getting a CA (collection agency) that does PFD (not all of them do). Second, a PFD collection would only remove the reporting of the collection on the account. It will have no bearing on removing the reported CO status.

 

In this case, Chase (as with the vast majority of mainstream lenders) will not remove the CO status. A CA has no authority, or power to do so either. 

 

Given the amount of the potential default in this case, I'd say the chances Chase doesn't sell off the debt to a CA, and goes after a judgement is all but guaranteed.

Message 6 of 7
TheKid2
Established Contributor

Re: Chase Credit Card Settlement


@JoeRockhead wrote:


The way you explain it, sounds so simple. Basically, default, then just wait for it to go to a collection  agency. At that point, you can just negotiate, then pay for delete... and it all goes away.

 

If it were that simple, default rates would be even higher than they are. For clarification, COs and collections aren't one in the same.  First, you have to count on getting a CA (collection agency) that does PFD (not all of them do). Second, a PFD collection would only remove the reporting of the collection on the account. It will have no bearing on removing the reported CO status.

 

In this case, Chase (as with the vast majority of mainstream lenders) will not remove the CO status. A CA has no authority, or power to do so either. 

 

Given the amount of the potential default in this case, I'd say the chances Chase doesn't sell off the debt to a CA, and goes after a judgement is all but guaranteed.


I was trying to warn in a similar way, but you did a much better job explaining it. It could go the way the OP hopes, but I doubt it, as well. The costs to pursue the debt are always a factor for a creditor, as well as, reputation. A bank as large as Chase does not want word spreading that they would allow strategic defaults this large to happen. They most certainly will be sure that the credit report reflects the CO and stays as long as legally possible. OP should also consider being black balled by Chase regardless of settling or not.

 

JOINED 4/2020


FICO 8 = 582, 620, 589 / Mortgage = 633, 526, 581


CURRENT PEAK *Thanks to the MF Community!


FICO 8 = 715, 711, 720 / Mortgage = 688, 696, 681

Message 7 of 7
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