great videos man! I work in debt settlement and this helped me make sense of it all. I have only been working in the business for a month so this was all very new to me. Thanks again!
Hello Micheal I have an unpaid judgement not showing on my credit report its 10 years old 8,000 dollars and three years I want to be able to qualify for a mortgage do you think I will be able to qualify with that judgement lingering
When you contact a creditor to settle, does it reage the account? Even if you don't start proceedings (just to get info)? And if given an acceptable offer to settle, and they give a time frame where the offer is valid, is that binding or is it just a ploy to try to get you to make a payment? Thanks.
Calling in does not re-age credit reporting. There are a few states with laws where calling in is questionable. More here: www.avoidbk.com/acknowledgement-debt-statute-limitations/
When dealing with the original creditor Chase bank, for instance, is it better let the account charge off and deal with collections. Or is it better to settle with the bank? How will both outcomes affect the credit score?
Settlements tend to be the best when your credit has already taken the brunt of the damage, so whether you settle with Chase, or the collection agency, it is pretty much the same from that angle.
Hey Michael, thanks for the videos they have been very helpful in my pursuit to financial stability again. I just have two questions that I need help answering. For the past 8 months I have been unable to pay 3 capital one credit cards and one credit one credit card. My 3 capital one credit cards have been closed and the 1 credit one is in collections. I have finally, recently come into a place where I have rebuilt my savings and am now able to pay my credit cards off. I would like to purchase a home for my family as soon as possible. I have also begun to receive settlement offers from capital one allowing me to payoff the debt for a fraction of the cost. What should I do to lessen the time it takes for me to become a home owner? Should I try to negotiate with capital one and pay off the full amount for some kind of forgiveness plan or should I take the payment settlement?
When accounts go this late it makes little to no difference if you pay them off in full or settle for less. Either way they will show a zero balance owed, and you can move on to your home loan goals from there.
Thank you for the information. I’m dealing with fidelity creditor services. I owe about 14k in debt with them. I was wondering how much should I negotiate with them. I currently have 5k in my savings
Who are they collecting for? How old is the debt? Do you have other late debts, and if so, how much does it all add up to? Are you paying other unsecured debts that have been kept current, and if so, what do all the current debts add up to?
Michael Bovee they are collecting for logix federal credit union. The debt is about 2 years old. I do have another account that is in 9k in collections as well. But all of my current credit cards are paid off and current.
Thanks for the insightful video. I recently received a cc settlement offer in the mail for the lump sum of $5700 the amount of judgment $22,400. The judgment was renewed a few months ago. The date of judgment was Nov. 2009. Citibank now handled by Hunt Henriques. Should I settle with offer amount or negotiate lower? By the way, my wages are being currently garnished by another debt collector...Asset Acceptance.
That is a pretty unusually low settlement offer from Hunt and Henriques, let alone on a judgment. If it is doable for you, I would be all over it if it were me.
My understanding from one creditor is that I'll receive a 1099-C for the forgiven/canceled debt (via a settlement). I was originally under the impression this would be taxed only if net worth is positive, but is this likely to be taxed at regular income tax rates in my 2017 taxes? I've also read on this source that exception may be accurate: www.creditcards.com/credit-card-news/six-exceptions-paying-tax-forgiven-debt-1282.php Any thoughts would be appreciated!
Question: IF you are current, and a settlement payment is available, will this still hurt your credit? In other words, is the part that hurts credit only assuming one is behind on payments?
Settling credit cards and personal loans, that are showing current on your credit reports today, typically hurts your credit massively and immediately, just like if you had fallen many months late in order to get a better settlement outcome.
I paid all my debt score took a hit but not that bad my question is should I still dispute the remarks even if it shows paid on credit report or just leave it alone
I am not a fan of disputing just to see if you get lucky, and prefer rebuilding over time. Having said that, I know some people have had success with the disputes, and getting paid stuff removed.
Hello I have 12 closed accounts on my credit some are already charged off I signed up with greenpath to start paying for those debts should I just call all those that debtors and just settle because greenpath is telling me I need to pay all of those accounts in full or it was going to make my credit look bad which is already bad I told him it doesn't make a difference because they're already damaging so I should be able to pay less but there strictly feeling like I need to pay all those accounts off in full I really feel like I should just call the creditors and negotiate please could you give me any advice I want to get this process started I have since coming to some money so I can get started with the process
Thank you Michael for the empowering knowledge. Question; I need to qualify for Grad plus loan, hopefully in the next 3 months. I've already negotiated debt settlement with 5 of my 6 charge offs. They say they will update the reporting to (paid for less than the full balance, and zero balance owed), will this meet the grad plus loan requirement of no accounts over 90 days late? Many Thanks again!
If the banks still have your account internally they will route you to their recovery department. If they have it our with a collection agency they will tell you who and give you the toll free number to reach them.
@@MichaelBovee thanks a lot for the advice. Your videos are straight to the point. My creditor was capital one. I watched your video on debt settlement with Capital One and, just like you said, they didn't settle for less than 50%. After calling twice i got one of my debts down to 60%.
Hey Michael I want to know what happens to the credit cards once you settle debt ? Can you no longer open one off once all debt are satisfy? When you file bankruptcy do all credit company’s close down the cards or do you have to put all credit cards when file for bankruptcy?
The accounts are typically closed before you settle them (you often have to be months late with payments), but certainly would be after a settlement. Sometimes you can keep other credit cards open when settling different accounts. When you file chapter 7, the trustee is going to want to see all of them closed and discharged. You would have to open and establish new credit cards after the chapter 7 bankruptcy.
I do not know the processes for Clear One Advantage, but most debts do not get settled until you are 5 or more months late. There are some exceptions like AMEX and Citibank, but not always.
I received a garnishment collection and my spouse lost her job, I can't afford to pay all my bills and with kids I just don't make enough to survive, can I join a debt relief consolidation program without having to go bankrupt?
When there is a judgment that lead to wage garnishment it can be tough to get settled. How much is the judgment for? How much do all of your other debts add up to?
My Michael, I got a question. I owe roughly 20k in credit card debt accumulated over the last decade. I want to get out of this debt once and for all but I'm not sure if this would be a smart move to do a settlement. I'm 26 years old and still living at home and no mortgages, but im worried that because my credit score will tank I will be screwed for life or for a while. Should I be worried about the credit score?
I would be worried about the credit score if I had credit and finance goals to accomplish in the next year or two. Less so if not. What if you want to move out and get a lease on an apartment? It will be super tough if you have not settled all of your debts yet.
I have 16,000 unsecured debt. After I pay my bills, buy gas and groceries I’m basically left with nothing. I live paycheck to paycheck. Would you recommend debt resolution in my case? I am making my payments currently, just struggling to ever get ahead.
Most debt settlement companies, including that one, charge high fees. I would look for one that charges a fee based on what they save you, and who sets them lower. Can you afford to pay around 320 a month to consolidate those debts?
Question. My prima owes $1400 on a credit card charge off from May 2018. The creditor offered to settle for 40%. If she is in the process of building her credit score. Is it more beneficial to pay in full or settlement. Currently has current car loan, student loan, and another credit card.
Once an account goes that late there is little to no difference in paying it off in full, or paying it off for less. If it were me, I would take the settlement and save money in the process. Be sure to get any settlement in writing before paying.
Hey, do you know of any resources or RU-vidrs for information on this specific to Canada? This helped me grasp large concepts, but I know our laws are a little different. Do Mastercard and Visa operate differently in different countries?
I do not know of any that cover the debt settlement side in Canada extensively. The process for negotiating is very similar though. You are never negotiating with Visa or Mastercard. Just the 5 major banks and credit card issuers.
@@MichaelBovee Thanks a lot for the reply! Yeah, I've been reading and it's pretty much the same. One detail I'm worried about is that the worst credit card i have is my Scotia Visa, which is through my bank, Scotia. Will defaulting on this credit card payment affect my relationship with my bank at all? Like can they freeze my account or something?
Hello. I have just signed up with National Debt Relief as I have about 10,000 in credit card debt to Chase bank and about 6,000 left to pay off of a personal loan from Upstart that was originally 7,000. They offered me a debt negotiation program that would last 39 months. I just want to know if it is worth it or what other options should I be looking at? Thank you
I do not consider their fees worth it. I work with different services that do a better job and only charge 15% of savings. You save more and you get done faster. You can call 800-939-8357 ext 2 and get more details.
I just made a settlement on my credit card debt and they told me that they’ll send the remainder to collection since it’s not all paid off. So how does this affect my credit score and does my credit will get back on his feed? Thank u
What account did you negotiate and with what company if different than the creditor? You did not really settle the account if they told you the rest is going to collection. Settling is getting them to agree to take less than what you owe and canceling out the rest of the balance that did not get paid. Given what you shared, you still will have a partially unpaid debt on your credit, and that will continue to hurt your credit.
It varies from creditor to creditor as to who will offer the best savings and/or time to pay. Who are the creditors and collectors you are dealing with? How late are you with payments?
Wanna move out of my parents house but I have 2,600 in debt for a old apartment. And 5,900 in debt for a car that got repoed. Should I settle so I can move out sooner ? I make 700-900 a week. I cannot move into this new place untill I pay off the old apartment.
Michael, My credit score is currently around 530. I am going through the settlement process now on 3 different credit cards. I have a car loan, and 2 other credit cards that are current and will stay current. I plan to buy a house in 2 years. I need to get out of debt so badly as my depression has worsened so much because of it. Can I try to bounce back quickly? Secured credit car? What do you think? Thank you so much.
You will not need to add much, if any credit, after your settlements are done. Not unless the accounts you are keeping get closed on you. Here is the article about the professor in Michigan I worked with from several years ago: consumerrecoverynetwork.com/debt-settlement-in-michigan/
I got scammed out over $60k @end of 2018. and that caused me to get a $39k in debt on credit cards and loans. the rest was money i borrowed from friends and family and savings i had. I'm 60 days behind on my payments . I have the police report and fbi reports on the scam. What do you suggest me to do. to get out of my debt?
Have you looked into chapter 7 bankruptcy? I would start there, as it is the fastest and least costly path to debt relief. If you learn you cannot qualify for chapter 7 let me know and lets go from there.
So, one of the big banks (begins with the letter C) sent me a settlement letter. However, their letter was deficient in that while it clearly stated what I had agreed to do (make payments), it failed to state what the original creditor would do (i.e. cancel the remaining balance). As much as I have tried to get them to send another letter, they are giving me a major hassle and claiming that the satisfaction letter which will be mailed at the end after all payments are received will give me what I need. What would you do in this situation Michael? The letter I have now is definitely clearly spelling out my part of the bargain, but it fails to clearly state the OC's part of the bargain... Would you stop/pause making any payments until you get what you need or proceed with the hope that the satisfaction letter at the end will suffice? Please advise. Thank you
Who is the bank? Are you dealing directly with them, or a collection agency on their behalf? What is the structure of your settlement? Does it say that they are agreeing to a settlement in the letter? Are there disclosures about potential tax implications on the letter?
@@MichaelBovee (a) Chase (b) dealing directly with them (c) 3 equal installments (d) the letter just thanks me for accepting their "settlement" but does not make any mention of what that entails on their part, just my part about making payments to them (e) yes there is a disclosure about potential tax consequences
Thanks. It sounds like the typical settlement letter from Chase, but hard to comment further without looking at it. It is not all that common to get banks to insert more to their letters than is already there. Chase is known for sending final letters that your settlement is complete, but the original settlement letter should be all I need if I am accepting a settlement (along with proof I paid from my bank).
They will take the issue to the court and file a law suit against you and in the end they will levy your bank account and put you in wage garnishment and suck all the money out.. this is what i am dealing with right now and just ended up in settlement which also includes the court fee and other feeses that they used to grab my ass..
Hi Michael, I have 30,000 in credit card debt and I can only afford the minimum payments on 4 cards due to high average 25% interest rate . I make my payments on time with all with credit score 720 . I am debating if debt settlement is for me or rather getting a personal loan to pay it all off with lower interest ? Thanks for your great advise you are offering.
You could look for a consolidation loan or balance transfer card with enough limit to move to. But you could also get the payments reduced to about 600 a month through a non profit credit counseling agency, which would provide a pay off time line under 60 months. I would loan shop first for a great rate, but if not approved, I would then look to talk with a counselor and get an exact monthly payment quote. You can do that at 800-939-8357 ext 1.
Thanks maybe i should wait and let them fall off....Will getting a credit card and making on time payments really bring up your score....I currently dont have a credit card...Thanks for answering back...great videos
Have a card, using it, making on time payments, and keeping the utilization low, does help your credit. It could be harder to obtain credit cards with unpaid collection on your credit reports.
Great video! I am on a 3 year debt settlement plan. We plan to sell our house and buy another one a couple years after we reach settlement with all creditors. Not sure if that's possible
I'm debating between debt settlement with a law firm or locking into a payment plan directly with the creditor (AmEx). I'm not especially worried about my credit score, but which option has the worse effect? With settlement, the debt is paid off more quickly, so does your credit score recover more quickly? With a 60 month payment plan, will the debt appear on your credit report as outstanding for the full duration of the plan's life, preventing your score from bouncing back? AmEx has closed my three accounts with them (due to a missed payment on just one), so that already hammers a big hole in my credit score, correct?
Typically, once your credit takes a hit from being 90 days late, you are not going to undo that damage by agreeing to a monthly payment plan, where settling will reduce the debt to zero and get you back on track credit wise faster.
My personal credit card with AmEx is up-to-date on payments, but has been "cancelled" along with the delinquent business accounts. Is "cancelled" the same as "charged off"? I'm concerned because my husband is an authorized user on the account. I did not realize that my business cards would be linked to my personal account, and as soon as AmEX called to inform me that they had closed ALL of my accounts (after a single missed payment on one out of three), I called and asked for my husband to be removed as an authorized user. I was told that because the account had been closed, they could not make changes. At this point, is there any way to prevent my husband's credit score from taking a hit? If I continue to make the payments on my personal card, will it still be considered delinquent because it has been closed? Thanks! PS: If I agree to AmEx payment plan that bundles all three of my cards with them, then the card with my husband's name attached will have never been late at all, let alone for 90 days. Would his credit score still take a hit?
It is common for AMEX to close accounts when they see you late with any accounts, not just other ones you have with them. You would not impair your husbands credit as long as payments on the account he is an authorized user on is kept current, even if it is closed.
That is good to hear! Next question ... my APR for that account is 15%, but AmEx has offered me an 8% payment plan, which I assume will only apply if I bundle that debt together with the past due accounts on a joint payment plan. If I do that, then I lose the option to settle the higher debts for a lower amount. If I continue to pay my closed personal card as always, do you think that they will RAISE my APR from 15%?
They should not raise your APR if you are on time with payments. I cannot say whether they would only offer the reduction as part of a bundle, but personal cards are often treated differently than business cards.
The state you live in will govern what exemptions you have in a chapter 7 bankruptcy filing. One state may allow you to keep your home if you have 100k in equity, where another may not. Florida allows you to keep your home even if you own it outright and it is worth a ton. That is just one example. There are exemptions for houses, cars, personal property like jewelry, and even cash. Talk with a bankruptcy attorney in your state and get help determining if you meet the exemptions that matter to you.
Can you provide more details about your situation? If you are talking about settling an account unrelated to your student loans, I doubt that would impact you negatively. In fact, settling collection accounts can improve your ability to get student loans for some.
Michael Bovee I don’t have any accounts in collection. I am current with all my accounts (credit cards debt) but I’m struggling to make minimum payments. But I called freedom debt Relief and they recommend settlement and said to stop paying my accounts. But I’m scared that the impact on my credit and maybe creditors sending me to colections would impact me negative while asking for my student loans. I’m currently undergraduate student and next year I’ll be going to graduate school.
I would try to maintain the minimum payments on the cards. If the interest rates are high I would talk to a credit counseling agency about what they could help lower my payments to on a debt management plan. You can contact one at 800-939-8357 ext 1.
Absolutely. You typically do not want to have any unresolved debts on your credit when you go apply for a conventional mortgage, so need to settle the debts anyway. You may find you can have less than 2k of unresolved collections for an FHA loan (though I have seen some FHA loans require paid collections). You will want to resolve any unpaid court judgments regardless of whether they show on your credit reports or not (unless they expired).
Hard to say. Everyone's credit is different. If you have no other unpaid negative at all, and take car of this one thing, your credit and/or credit options should improve. I would think there is more to a 556 score than a small unpaid medical bill.
@@MichaelBovee thank you for the reply. Actually that's the only debt I I have. I have only recently received a ssn with my green card. So I have one secured credit card that's on time, outside of that no loans or other debt.
Hi mike.we already spoke on phone. Currently making $225-pymnts on $8900 Citibank...I have$4000. Ready to cut a deal..it has got to Work.!! Can u lend me the correct way to speak to attorneys office collecting on ccard? I will have only made 2 pymnts when I bargain.. thx! I'm going to buy a home & NEED all debt cleaned up.also, how do we know if we will get a 1099? Is there any data on whom will get one?
You should expect to get a 1099c from all accounts you settle where you end up saving more than 600 dollars. It sounds like your Citi account is with an collection law firm? Which firm? Who is the debt buyer that hired them?
Check out this article about meeting the criteria for IRS form 982: consumerrecoverynetwork.com/debt-forgiveness-taxes-settled-credit-card/ If you have more debts than assets you can often avoid the tax on forgiven debt. People that discharge debt in chapter 7 bankruptcy, or that discharge some of their debt in a chapter 13, do not owe tax on the cancelled debt.
Hello, i currently have a student loan collection account with ability recovery services from Walden. The amount is now 5700 and am wondering the amount to pay? The original amount was around 4800. It ha already impacted my credit
