Credit Card Debt Counselor

I have credit card debt with 2 companies. I want to try to settle the debt for about 2/3rds of the total with each one. Anyone know hwow I can do this without using a credit professional?

Hi mawmaw mary!

Looking at the other answers so far, I see some good info mixed with some incomplete info and also some inaccurate info.... So here's a quick step by step guide for you to accomplish your goal:

Settling for 2/3rds is a reasonable goal.

First let's clear up a few things, then I have three "keys" for you to follow...

Overall, "doing yourself", consumers average settlements of about 75%. Professionals average less than 50%, and usually charge about 15% in fees, putting the total cost to use a professional at about 65% or less on average.

Creditors do give professionals "special treatment" because they deal with each other every day. Large professional negotiators are the bread and butter for most collector these days. Also, when a professional representing many clients comes to the table with $ Millions of dollars, this creates serious leverage and creditors are willing to settle for substantially less than any individual would ever be able to achieve on their own.

Still, I've helped many folks who have a knack for negotiating, documenting and following up (the three critical skills you'll need to do this) to get settlements as low as 45-60%. Here's the keys to accomplish this yourself:


KEY # 1) Your accounts must be delinquent.

Creditors will not settle for anything less than the full balance until your accounts are seriously past due, usually 180 days + after "charging off". This is because when creditors "charge off" an account (an accounting entry), they are taking a tax benefit on the account by writing it off as a loss. This devalues the account, and it is no longer worth the full balance owed. In fact, the normal course of business is to sell the "bad debt" to a third party debt collector.

FACT: In 2006, "bad debt" was sold to collectors for an average of $0.034 cents on the dollar. That's 3.4%! Keep this in mind. This is exactly WHY debt settlement works so well, because it's a better deal to the creditor or collector than any other option, such as a lawsuit, collections or bankruptcy.


KEY # 2) Documentation BEATS Conversation, every time.

DO NOT make any payments by phone. Collectors will almost always ask for a check by phone. Say this:

"Unfortunately I’m unable to make a payment at this time; and am hoping to bring resolution to this matter as soon as possible. I understand you want me to make a payment right now, but that just isn’t possible. I will have $_________ (state an amount that's roughly 35-50% of your balance, not a percentage) soon and want to settle one of my two accounts, whoever will give me the best deal. Can you please send me an offer in writing?'

Track everything (documentation)... who you speak to, their name, phone number and extension, date and time. Keep everything organized in a folder, easily accessible.

HINT: You can do this initially or in response to a settlement offer that's too high... Write a "Hardship Letter". Hand write or type up a letter describing your situation, your inability to pay and include information such as, divorce, medical issues, loss of job, disability or reduced income. Any information regarding your personal hardship will help your negotiation, so don't hold back. Send this letter along with a request to settle the account for $_______ (again, a random amount roughly equal to 35-50% of your current balance).

NOTE: Certain creditors such as CitiBank, Chase if you live in FL, NY or OH and Target will not settle for such small amounts. You should accept 60% to 75% in these situation and consider it good. All three are more likely to pursue legal action as well.


KEY # 3) Use certified mail with return receipt.

Once you get an acceptable settlement offer in writing, send a check, but first... Write your account number for the account you are settling on the check and in the memo write "FOR PAYMENT IN FULL". Send the check along with a COPY of the settlement offer certified mail with return receipt.

BULLSEYE LETTER? In over seven years full time in this debt and credit business, I've never heard of a bullseye letter. I'm an optimist, but it's unrealistic to think you can settle your debt for about half of what you owe and at the same time have the creditor send you a letter to have the account removed from your credit report. However, once the account is paid to a zero balance, then you can do the normal process of credit repair and quite possibly have the account removed through disputing it and requesting verification.

FYI: "credit counselors" do not settle debt. They usually are able to reduce interest rates but collect the full balance through a debt management plan where you pay them one single payment each month while they turn around and pay your creditors for you (hopefully), in full.

** If you ever consider professional debt settlement, be sure to READ THIS WARNING FIRST: http://ezinearticles.com/?Debt-Settlemen t-WARNING!&id=1275007

2008-09-07 09:07:04 by mawmaw mary

www.coastalcreditsolutions.com our mission is to provide consumers like yourself a personalized unbiased financial analysis and then match you ...

You can (patiently) call all of your creditors yourself and work on getting a reduced interest rate. Call their number, tell them what you would like to do and they should get you to the correct person. It probably will not be done in one phone call so be patient.

Reign in your spending.Then Pay off the smallest bill first, roll that payment to the next on and keep going. Be patient it will take a while.

But getting the interest rate reduced to something reasonable is major. Let them know you are in financial trouble and may have to file bankruptcy. If you are young do not do it, it will be many years before you can buy anything.

Work hard on your spending make sure you have cut up all the credit cards. Do not charge anything else.

Learn to live on what you earn.

2006-10-23 12:51:17 by dixievix963

Price: $4.88

By using services from a debt relief organization you will stop receiving phone calls asking you for money. You will pay a fixed rate amount every month which will never go up. You won't be dealing with your creditors any more. The "debt relief people" will be paying your bills for you, and your credit card company is out.
You then pay the debt relief company.
lots more here:
http://finance.ebookorama.com
http://credit.ebookorama.com
http://credit-repair.ebookorama.com
http://credit-cards.ebookorama.com
good luck!

2006-10-30 14:22:13 by mcgra1hk

I was recently terminated from my job in July and am having difficulty finding a new one, but in the meantime I have about $25K in credit card debt and not able to make payments. A credit counselor suggested bankruptcy, but I know the consequences of such action. However, without a job I have no money and I do plan to get one as soon as possible. So please don't tell me to get a job, I already know that and doing everything I can by applying for many different positions. But given my current situation, is bankruptcy my only choice and is it better to do when you are unemployed or have a job? I have also already tried to contact the creditors to negotiate the terms, but no luck since my credit is in such bad shape. Any suggestions?
I forgot to add something...will filing bankruptcy hurt my chances of getting hired for another job?

Go to this site: http://www.nfcc.org/ They are Consumer Credit Counseling Service (CCCS), a legit non-profit company. They offer free credit counseling and have a debt management program available, if you qualify, for no fee.

They can look at all you debts and advise you how to proceed.

If you have $25K in credit card debt, you didn't run that up in just the past couple months. You have a real problem living beyond your means. If you had managed your finances better, losing your job would not have put you on the verge of bankruptcy in two short months.

2007-09-14 12:21:44 by Heidi

I have some bills that need payed off and I have one credit card. My question is if I go or contact a Credit counselor or Debt help business(Careone credit,debt relief agency) will they freeze my credit card account or put it on hold? My debt situation is not bad, but I've heard that if you seek help through a business that specializes in credit card debt or collections, they will freeze all of your credit cards. I am slowly building up my credit and I would hate to have them take my card away. Is this true? Any one that has or has had this problem or knows the facts please let me know some options.....Thanks!!!!

USually use a CC or Debt business when your bills are too much for you to take care of; and in that case, the last thing you need to do is keep charging; and in many cases, they will contact the CC company to get interest charges adjusted. IN all of these cases, you'll probably use the use of the card

2007-02-23 11:14:53 by knoccturnal daydreamer