Peter wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.
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“Dear Steve,
I owe about $50,000 in cc fees- I went two months behind on payments on purpose becasue they would not settle with me before that. I am offering them 35 on the dollar as a one time payment only if they settle- it’s all I have but I do have that. I am leaving the country FOR GOOD with my family with no plans to return to the US. I will be going to Australia. I will be renting out my house at a loss and I have no equity left in the house – I have no other assets. THEY refure to settle, they only want to lower my interest rate.
Should I go to one of these debt settlement companies or should I try the cards again. I leave in mid MAY.
Peter”
The Answer:
Dear Peter,
I am a firm believer in using a third party to settle your debts. If you do it yourself the credit card companies can emotionally play you and you don’t know what they can really do since you don’t regularly do settlements. Click here and speak to a debt settlement company and ask them what their experience is with your specific creditors.
A 35% settlement offer is very aggressive and they might not take it. I can only think of a few instances when I’ve seen them go that low and they all appeared to be totally random. The cases with great stories and supporting documentation, they seemd to ignore. Who knows why?
A creditor does not have to accept any settlement or reduced payment offer, even if it makes perfect sense to accept it. And if you get no joy with the debt settlement company you are thinking of working with, you might just consider bankruptcy. Leaving the U.S. and not resolving the debts one way or another is not a good solution. Creditors are doing more international collections these days and it can follow you to Australia.
So my advice is use to try a debt settlement company or think about bankruptcy before you go.
Does that make sense to you?
