Can I settle with credit card company with no late payments?
Q: Pulled credit scores through myFICO, and I have 752 and 779. I have 5 relatively small credit card balances, all under $1,000, and one large one for $17,800. I want to settle with credit card company for around $3,000. If they accept this offer, I would be able to quickly pay off the remaining credit cards. Will a credit card company settle if I have never been late with payments? I do not want to stop paying to preserve my scores. Right now, I am only able to pay the minimum monthly payments, and at this rate it will take forever. At the start of 2010, my salary dropped by $16,000 and I have lived from paycheck to paycheck. And things can get even tougher for me. So here are three questions,
- do I have any chance to settle with credit card company with no late payments?
- should I write a letter, go to the branch, call?
- should I tell them I am considering filing for bankruptcy?
A: I know of a few people settling for less 25% of the outstanding balances with different credit card issuers, but most of them were late on payments. Your offer would be just short of 17%, and could be a good starting point. I would say, a settlement offer closer to $3,600 is more realistic.
You don't want to be late to keep the good credit score intact, but as soon as you settle with a credit card company, you are entering into a debt settlement agreement which is recorded on your credit record, so the scores will drop and quite a bit. Still, may not drop as bad as if you miss a few payments before hand.
Call your creditor and try to settle while you still have no late payments, but it is almost unheard of to successfully negotiate credit card debt settlement without being late. If they refuse, you will have to miss a couple payments within next 4 to 5 months to show financial hardship and hopefully, convince them to settle. As far as mentioning Chapter 7 bankruptcy, you sure can do that.
Depending on the credit card company, you may get a settlement offer quick, which needless to say, must be an official letter from them, stating something like this,
This letter is regarding a proposal to settle the above-referenced account. We will accept $XXX as a settlement on this account. To accept this offer, you must agree to send the installment payment of $XX by MM/DD/YYYY.
By completing this payment plan, your account will be considered settled and you will not be obligated to pay the remaining balance, provided no additional charges appears on this account after the date of this letter.
Settling for anything under $4,000 would be great. The most important things is to get the ball rolling, and then you can always try to push back and try for a lower amount. Hopefully, the credit card company settles before it is too late and things really get tough. You will have to likely make 6 to 12 monthly installment payments under any debt settlement agreement.
Mon Jul 11, 2011 11:07AM | Copyright: www.bad-credit-advisor.com | More in Credit Card Debt | Comments (0)
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