Hi Michael! I have been unemployed since March and got COVID relief for 2 months on most my cards.. but have not paid since March. Discover just took off 8;000 off my $20,000 debt and offered 0.99% interest, with payments at $241 until balance is paid. I have cash to settle... should I make a lower offer now or wait for the debt to be charged off? Also will my action with Discover affect the action other creditors (WF, Citi,Chase) react to my non-payment? My biggest question is when do you know when to make an offer? We are long long time customers and have paid so much in interest already... they technically have been paid back if you take off interest they have already charged us. Do they take how long you have been paying them on time etc? I appreciate all your knowledge !!! Thank you !! Cindy
Banks tend not to reflect much on your long relationship when determining the settlement deals they do. It sounds like Discover has already charged off your account if they are offering that long of payment terms. Either that, or they will charge off the account in order to make that deal with you. If I have the money to lump sum a settlement with Discover, and still fund other settlements with other creditors, I would do that. If I do not have enough to settle all my debts, I would consider the payment plan settlement with Discover so that I have some resources left to deal with other credit cards.
@@MichaelBovee thanks for the quick reply and great advice! Is there a way to see if an acct has been charged off? If I offer a settlement, what percentage should I offer to start? 30%? Thanks again for your time and advice ! You are the only detail information out there, that I have found.
Your credit report will often reflect a charge off status after it has occurred. You can call the bank and ask if your account has charged off. They will answer most questions. I would not expect to get Discover lower than 40% at this time, so starting a bit lower can leave room for counter offers.
@@MichaelBovee Thanks! We just settled with Citi for a little over 40%, and it still hadn't been charged off. I will make 3 payments and be done. I was amazed how easy it was. I offered $7,000 and they agreed on $7,400. ( I owed almost $18,000). I truly appreciate all your guidance and educational videos and blogs. I will call Discover and see if I can get a lower settlement on Monday. You need to write a book! Thanks again!
Hey! Have barclay, monthly payment is 550 minimum and I’m wanting to settle. I am current tho. Better to start being late and toast my credit to get out from under this? I can afford it but at a huge cost obviously when I could be putting that into savings each month instead.
You typically want to be at least 90 days late, and more often 5 months late, before targeting optimal settlement outcomes. Whether it is better to settle or not is different for each of us. You are welcome to schedule a call with me to talk through the implications, your goals, and what doing settlement will look like for you. You can do that here: calendly.com/debtbytes/15min
Best debt channel on youtube... thanks michael.. u helped me out 3 years ago with questions I had and u even responded to my emails rather quickly... I wish you much success
hi Michael I recently attempted to dispute a charge off and the creditor has now sent me a debt settlement offer. Should I pay the offer directly to the creditor?
Who is the creditor involved? What are the terms of the settlement agreement? Do they provide instruction to send an amount by a certain date, or does the letter suggest to call in and talk further?
@@MichaelBovee the creditor is wells fargo the oofered me 40% and i can call to set up an arrangment or go online to the wells fargo app and pay there.
Check to see if the settlement offer they sent you meets the bullet items I outline here: consumerrecoverynetwork.com/debt-settlement-letters-agreements/ If it does, I would pay them through the phone or online.
Hi, BMO charged off and transferred my HELOC (already in forebearance but current on monthly payments) to Dovenmuele for servicing. Do you have any experience with them on % of debt for settlement offer? Thank you
I lost my business due to Covid, since then i have been in debt to 3 credit card companies, Chase, Capital one, and The apple card Golden Sachs, been making payments since 2019, all on time until of now, 19k in debt and since then its been so hard to get out of the debt, what can i do?
Check out my debt relief review article for an outline of 6 ways to deal with debt: consumerrecoverynetwork.com/debt-solutions-review/ What are you inclined to do after reading that?
After bankruptcy i was able to keep my car so long as i made the payment. After a few months I figured why not reach out to see if I could buy it! Worst case for them they take it and have to sell elsewhere for less either way. Owed 13k initially, bought car from bank for 8k/ market value
Michael, Nationwide Credit has one of my accounts (for AMX) and it is pre-charge off @ 3500 and climbing. what is the best way to negotiate with nationwide? What should I be requesting here? Wait until after charge off? Broke but looking to settle with help from friends.
The balance is smaller, so not likely to go to a collection law firm next. I would feel better about holding out for a good settlement by waiting for charge off and a different collection agency. And that is if you cannot get Nationwide to a reasonable settlement number, which is possible.
Your comment with the link got deleted. Can you share without linking to private information that should probably not be shared on the internet? Who is the creditor or collection agency involved? When did you stop paying on the account? What state are you in?
Hi Michael, I have a couple of credit cards with Capital One (approx combined bal is 40K), when you negotiate, is it best to combine them or handle them separately? At what point do the cards become charged off? At point do they sue you? I'm late one month on both cards.
If you have the resources to commit to settling them at the same time, I would talk to them about settling simultaneously. Here is detailed information about charge off: consumerrecoverynetwork.com/charge-off-and-credit-card-debt-what-it-means-to-you/ Your risk of being sued by Capital One begins shortly after charge off. They are selling debt again, so if a debt buyer gets your accounts you will have court collection risks there too.
@@MichaelBovee thanks Michael, per the article I get that a charge off happens typically after 180 days of consecutive nonpayment; so a good time to settle should happen close to the 6th month? Have you heard of people that settle earlier that that, let's say on month 3?
I see a little bit of that in normal times, but the settlement savings is often not as good (some exceptions). I see a bit more during Covid, but not nearly as much as I expected.
If the bank account is not with a creditor you are going to need to settle with, you typically want to stop any auto payment drafts. Some creditors require you to call in to do that. If the bank account is with a creditor you will be trying to negotiate a settlement with later, if it were me, I would move banks in the beginning, or earlier than when I need to negotiate that account.
I'm confused why you say paying off debt through a settlement would toast my credit score? If I pay off with a settlement on a credit card would that also close my account? Is that what you mean?
Settling a credit card once you are several months late, when the credit damage has already occurred, can be seen as an improvement. Getting a creditor to settle with you when you are still current will damage your credit the same way as if you have gone several months without paying.
You cannot both settle the credit card debt for less than what you owe, and still keep the account open too. Accounts get closed after the first missed payments for the most part. Discover settlements tend to range between 40 and 65 percent.
I am currently on a hardship program with Citi and Comenety, they stopped charging interest and closed the accounts. It has been 19 months for both and balance is around 6k each. I am current on both but am finding it hard each month to continue. I would like to try and settle but like I said I'm current. Do you have any advice?
If your accounts are considered current you typically have to miss payments for several months before you can settle for the best savings. I have an article series that explains debt settlement from start to finish here: consumerrecoverynetwork.com/credit-card-debt-settlement-program/
I have 6 different credit cards I have been payment the minimum payment and my credit score is not bad. So if I decide stop paying until we can negotiate my credit score will be falling until there? Thank you
Your credit score does not continue to drop the whole time. You typically see most of the decrease in the first several months of being late, then it levels off at its low, for the most part. As you settle debts your credit score can improve. I tend to see the most improvement happen after all settlements are completed.
Michael, excellent work. I have huge financial problems. How do you negotiate with a credit union without having to jump through so many hoops? Is there an easy way to get to a settlement amount without having to submit to an advance debtor's exam? I think it's more of a time issue ... I need to focus on other things rather than filling out applications. Being broke/busted is tough and stuff like this makes it tougher.
Filing chapter 7 bankruptcy, if you qualify, will nearly always be better mathematically than settling debt for less. For many of us, the credit bounces back faster from a chapter 7 too! See here for a clear comparison of the two: consumerrecoverynetwork.com/credit-report-score-rating-debt-relief-programs/ I vote for chapter 7 on 200k worth of credit card debt, but if for some reason you cannot qualify, or choose not to, who are your creditors? What are the balances owed? How late are you with payments?
What is the difference between debt resolution and debt settlement? I have a company called Smart Living Financial that says they are a resolution not settlement but it sounds like the same thing.
If the plan is to negotiate with creditors and debt collectors in order to pay less than the balance owed, you are doing debt settlement. Calling this by any other name has always seemed odd to me. I will say be a little more cautious with companies trying to brand what they do as something else.
Great channel! I appreciate the hard truths that you give to us. I have a capital one credit card that was sent to a collection company called the Bureaus, inc. it was sent to collections about two years ago for about $500. I have the means to pay in full, but want the best outcome for my credit score. Should I just pay it? Thanks in advance!
Once you go a few months late the affect to your credit score from resolving the debt is pretty much the same whether you pay in full or settle for less. If it were me in this situation, I would settle for as little as possible.
You can settle Discover personal loans much the same as their credit cards. I want to target the earliest settlement with them at 4 months late, compared to 6 months late on credit cards. How long have you had the Discover loan?
@@MichaelBovee I have had personal with them for 3years. No late payment records, but I have to eat rice and beans to survive every month. Right now my income not increased but my debt is killing my life.
Thanks. Discover, and many other banks, have a different way of looking at accounts that have only recently been opened. Your is established, so should be a pretty straight forward process.
Hi Michael, I have a $2,000 debt with Discover card, are they harder to deal with than other debtors? I'm wonder whether it'd be even worth it trying to reduce this amount. Thanks.
Once you are showing 2 to 3 months late on your credit reports, I favor settling debts over other alternatives, as long as you can pull together resources. With a few exceptions, settling with credit card banks is typically ideal when between 5 and 6 months late.
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Thanks for all the great videos. I’m currently 180 days delinquent with USAA MasterCard. Now living overseas with no plans on returning to USA. My debt is 15k. While I could care less about my credit score, I may be willing to settle at some point. I’m just trying to gauge what that number might be. What if I just ignored it completely? Is there a statue of limitations? Say, if I returned to the US in 10 years? Any help or advice is much appreciated.
Most negatives entries age off our credit reports after 7 year. More on that here: consumerrecoverynetwork.com/question/collection-accounts-age-off-credit-reports/ There is also a limit to how long the bank has to legitimately sue you in court. They may be thinking of the years allowed in the state they think you last lived in. If you came back to the US 10 years from now this would all be in the rear view mirror. But be sure to check out this video about debt when you have left the country: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-hmz6-TmHPIo.html
