Negotiating With Credit Card Companies Question

**Paul H** · 01-29-2007, 12:56 AM

Re: Negotiating With Credit Card Companies Question

Unless you're 60-90+ days delinquent on your credit cards, your chances of getting a settlement are slim to none.

And while letting your cards slip 30... 60... 90... 120... days past-due might buy you settlement "leverage", it's irresponsible and the damage done from just ONE 60-90 day late can tank your FICO scores for up to 7 years.

If you have the capability to repay your credit cards, it's your responsibility to repay every penny. Settlements and BK are designed for people who genuinely need the help (i.e. job loss, health problems, business failure); not people who want to stick everyone else with higher APRs and inflated prices because they choose not to pay-off the debt they got themselves into.

Best,
Paul

**poundwise** · 01-29-2007, 04:41 AM

Re: Negotiating With Credit Card Companies Question

To the portion of the question which asks, "...show my card paid in full and satisfactorily?"

The answer is a certain, resounding, no. They will report it as "Settled."

Also, most companies will not discuss a settlement for less than 60%.

Here is a nice article on the subject.

For the record, I too believe that you ought to make your best effort to repay the amount owed. Too many people opt for settlements and bankruptcy as an easier way out when they could get serious about paying their debts and get it done. I do not say this applies to you, for I don't know anything about your situation, that is just my general view.

**LuxLiving** · 01-29-2007, 05:03 AM

Re: Negotiating With Credit Card Companies Question

Originally posted by questions

I owe $100,000 on credit cards. I can borrow $50,000 from private source. Can I use this money to get out of debt. Is it possible to negotiate a 50% settlement with card companies and obtain their promise to show my card paid in full and satisfactorily? What steps should I take? I would want a letter of agreement from each card company first before I paid them off.

Uhhhh...I think your first three sentences obviously tell you NO. Even if you got a settlement you are still going to be IN DEBT to the tune of 50K.

Why would you try to stick the CC companies w/the unpaid portion of YOUR bills?

How did you get in such a large amount of debt to begin with?

Have you stopped debting?

Most importantly for whatever friendship/relationship is at stake:
Would you stick it to the person who is now offering to help you as well?

Why is it easier to try to go back on your honor and try to avoid paying your debts to a company? Is your honor and word no good?

Have you considered another job? Cutting back in other areas of your life so you can go forward with your head held high?

These of course are not the answers to your questions that you were probably hoping to hear, but may be wise to consider before you proceed any further. Stay around here and there is loads of support and ideas for getting out of debt the old fashion way of paying what you owe.

**bjl584** · 01-29-2007, 06:05 AM

Re: Negotiating With Credit Card Companies Question

About 5 years ago my Mom got in trouble with credit cards. She owed $40K but was able to settle with the credit card companies and repay 50 cents on the dollar. I don't know all the details of her situation, but I do know for a fact that she was only required to pay back half of what she owed. I believe that she told them that she was going to file for bankrupcy, in which case the credit card companies would have gotten nothing. They gladly settled for half once faced with this possibility.

**Ima saver** · 01-29-2007, 07:30 AM

Re: Negotiating With Credit Card Companies Question

Could you give more details? Why do you think you should only pay back half of what you owe?

**vsjhoc** · 01-29-2007, 08:51 AM

Re: Negotiating With Credit Card Companies Question

Please, can we stop beating up people for incurring debt?

We don't know the OP's situation. It could very well be that medical problems were the issue. Or job loss. Or divorce. Or a spouse that hid a gambling problem. Sometimes we are quick to assume that someone just ran up debt willy-nilly. The OP is looking for help; let's not be so quick to judge him/her.

**LuxLiving** · 01-29-2007, 09:36 AM

Re: Negotiating With Credit Card Companies Question

I don't consider being honest with someone about why they do not want to pay the full amount of their bills is beating them up. I was attempting to find out more information.

However, I do not agree on any level that any bill you owe is okay to try to talk someone into accepting less than what you agreed to pay. Period. Wasn't attempting to beat them up but to get them to face the fact that they on some level agreed to pay the bills and are now looking for ways out.

I've been in debt for all kinds of reasons - good and bad and health and other people's stupid mistakes but if I agreed to pay it the honest thing is to pay it. And I did - often working three jobs just to make that happen. Honest integrity is something that is often missing in our culture today and babying someone to make them feel all gushy is just not in my makeup. I don't want to be cruel but did want the poster to explain if not for me but for themselves why they felt it okay. Maybe you didn't read it that way.

Just because someone can hang a 'I'm about to go bankrupt' stigma on themselves and get out of paying does not make it right. (Sorry OP you don't mention bankruptcy but someone else in this thread did.)

vsj, you may have other opinions and are entitled to them. I'm well aware that people come here for help and I do try to proffer some, I've been down and out and crawled myself out of the hole more than once so it's not my nature to kick someone when they are down, but was trying to get the poster to realize that backpedaling now is not necessarily the honorable thing to do and to stop and consider if they would do the same to a family or friend in the future who is willing to help them now - IF they haven't stopped the root of the problem which is debting - for whatever reason and yes I'm aware that disasters, job layoffs, health events happen.

Not knowing your age vsj, I can't assume to know what era you grew up in, but mine was the one where if you made the bill FOR WHATEVER REASON, the right thing to do is to pay it. Not that it is easy or fun.

I do apologize OP if I offended you, twas not my intent. As I said in my post stick around here there are lots of people here who are willing to help you to make the debt go away in the old fashioned way of just paying it off over time.

I'm going right now to read back thru OP's posts to see what other info I can garner.

**mom-from-missouri** · 01-29-2007, 09:54 AM

Re: Negotiating With Credit Card Companies Question

Wre them a letter and explain your current situation, how you got into the situation, and what you can afford to give them. Also ask for a reduction on the interest, and for 90-120 day grace period before you make your first payment. (If they grant it, save every penny you can for that 90-120 days). be honest with them, they if you promise to pay them $25 or $300 a month, DO IT. Don't back out of your terms that you set later.
I would recommend if you don't have one, start an emergency fund (on this site referred to as an EF). Most credit card debit starts as a result of someone not having an EF. In your situation, even if you only put $5 a month into an EF, at least its something.

**vsjhoc** · 01-29-2007, 10:10 AM

Re: Negotiating With Credit Card Companies Question

Lux,

My comment wasn't meant to be an attack on you, and certainly not a disagreement that people should take full responsibility for their bills. I've fallen on hard times as well; heck, I'm even writing a book about it! I've always taken responsibility for my bills and sometimes even those of other people. It just about killed me one year when I worked 12 - 15 hour days, got a nice Christmas bonus, and had to spend the entire check on someone else's debt just so my credit wouldn't go in the gutter.

My point was that we shouldn't flog people for incurring debt. I never said they shouldn't take responsibility for it.

**bjl584** · 01-29-2007, 10:15 AM

Re: Negotiating With Credit Card Companies Question

LuxLiving: I wasn't suggesting that what my Mom did in her situation was right or wrong or that I agree or disagree with what she did. I was just explaining what happened. Fact: she settled with the credit card company for 50 cents on the dollar. Take that however you want. I personally wouldn't go that route, but others may choose to. It's just one possible soultion to the problem at hand whether it be right, wrong, or whatever.

**LuxLiving** · 01-29-2007, 10:18 AM

Re: Negotiating With Credit Card Companies Question

Right O bjl there are lots of reasons (good/bad) why people declare bankruptcy - not meaning to disparage your Mom - but only to clarify that I knew the OP didn't state anything about declaring it.

**vishenda** · 01-29-2007, 10:27 AM

Re: Negotiating With Credit Card Companies Question

First, it will never say "paid in full" unless you actually pay in full. Your credit report will say "settlement" or something like that. But, if it is already in a derogatory state, then that cannot be removed. It will clearly show on your report that it was a derogatory account and settled for less than the balance. However, your credit score will be higher because of this than it would be if you left the account derogatory. You can certainly negotiate a 50% or more reduction in what you owe. Typically if you claim you only have X amount of dollars and might file ch 11 soon, they will attempt to settle with you if you make an immediate one-time payment. Tell them you have $35k tops and if they wont accept that you dont have any other choice but to file Chapter 11. This should change their tune. Remember that it is a negotiation and they are trying to get you to pay the most of the debt, but if they are convinced that you could file chapter 11 and they will get less or nothing than what you ofter them they will be more likely to accept your offer.

Negotiating With Credit Card Companies Question