Credit Cards will not really settle

iVillage Member
Registered: 11-07-2008
Credit Cards will not really settle
5
Fri, 11-07-2008 - 11:12am
I need some advice...I hear on the today show it seems weekly PAYOFF your credit cards, call these companies and they will settle or work with you...I have 2 credit cards that were pretty high and my husband and I have been paying the min each month for a long time, we have decided to payoff our credit cards if they would settle at a lesser amount, like we have been told to do so many times. We have been at our ends struggling financially and we called the 2 credit companies we have (Discover and Capital One) and told them we could no longer afford our payments and were willing to send them a lump sum if they would settle...We'll they said they did not do that unless you were 120 days late, so this helped us NONE b/c we have never made a late payment to anyone and are not going to start now. Paying your bills on time actually punishes you, this is amazing to me..I did not see anything about this on the Today show that you have to pay your bills late to get anyone to work with you. My husband actually told them well we will just go file bankruptcy and they said ok do what you have to do, so they would rather take a entire loss then to settle on atleast removing some interest??? Does anyone know if this is the way it is on ALL credit cards?? You have to be late to be rewarded with a settlement?
Avatar for confusing
iVillage Member
Registered: 03-27-2003
Fri, 11-07-2008 - 11:47am

I have no idea, but I would email the Today show and ask the financial expert. Since they are always advising people to do this maybe hearing what actually happens when you call would help them.

Good luck!



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Avatar for cl_phocid
iVillage Member
Registered: 03-26-2003
Fri, 11-07-2008 - 12:12pm
There is no incentive for the cc company to settle for less than what they are owed unless they suspect you will file BK and leave them high and dry.

All my best,
Danni

iVillage Member
Registered: 01-25-2006
Fri, 11-07-2008 - 12:14pm

I think generally yes, you have to be behind in payments to get them to work on a settlement. They might work with you on a reduced interest rate or a reduced payment amount but likely as long as you pull out the stops to get the payment to them every month, they are going to keep hoping you'll keep doing so. One thing to consider though is that it seems as if you've tried really hard to keep your credit clean. A settlement would be a big ding on your credit. Of course, a BK would be too. Your family might be a good candidate for consumer credit counseling. You would have to meet with them regardless if you wanted to consider a bk and the meetings are generally free. They have experience negotiating with the creditors and likely would be able to help you get reduced interest and payments so that you can see some light at the end of the tunnel.

Peg

iVillage Member
Registered: 03-17-2003
Fri, 11-07-2008 - 12:23pm
Hi momof3awesomekids.
iVillage Member
Registered: 11-07-2008
Fri, 11-07-2008 - 1:15pm
But you can always try to negotiate a lower interest rate by saying you have a better offer from such-and-such company, and ask if they can beat (or match) that offer.