Ask The Get Out of Debt Experts Debt Settlement

I Am Convinced Debt Settlement is the Way to Go. – Gus

“Dear Steve,

I have 6 cards with debt of about $57,000

I do not want bankruptcy.

I am convinced Settlement is the best choice.

I read some of your helpful articles!

You make good sense.

What are the consequences,if I make $10 payments on each card.

I would make them on time. Just short of minimum requirement.

Do I show as late, or delinquent?

If it would have the effect after 6 to 8 months to have them to try to settle on a smaller amount, it would be worth it.

How bad does this method tarnish me?

The lawyers are all getting 12 to 20% to do the calls.

Of course it is on the gross, not on what they negotiate down, so the fee is actually double on the agreed savings

They save me let’s say 40% on $57000, they want $8550 plus monthly fee as an example, based on 15% So on $22800 for example, they would want $8550. That is about 37% of what they supposedly saved.(olus monthly fees)

What is your input on paying less and hoping for a settlement offer?

Thanks

Gus”

Dear Gus,

Let me tackle each of your questions.

What are the consequences,if I make $10 payments on each card.

You will become delinquent, fall past due, wind up in collection and potentially eventually get sued for the debt.

I would make them on time. Just short of minimum requirement.

Acceptable payments are those that arrive before the cutoff time and are at least the mutually agreed amount.

Do I show as late, or delinquent?

Late, delinquent, what’s the difference. You will be shown as being past due.

If it would have the effect after 6 to 8 months to have them to try to settle on a smaller amount, it would be worth it.

Ultimately only you can make the decision if the risk of being sued, potential tax liability, and the bad credit that will result from this approach are worth it to you.

How bad does this method tarnish me?

It will really hurt your credit report and lower your credit score.

The lawyers are all getting 12 to 20% to do the calls.

I assume you are talking about the debt settlement companies here. Lawyers don’t make the calls. Hourly employees do.

Of course it is on the gross, not on what they negotiate down, so the fee is actually double on the agreed savings

Yes.

They save me let’s say 40% on $57000, they want $8550 plus monthly fee as an example, based on 15% So on $22800 for example, they would want $8550. That is about 37% of what they supposedly saved.(olus monthly fees)

Yep.

What is your input on paying less and hoping for a settlement offer?

There are a small number of people for whom debt settlement makes some sense. Not everyone. I would suggest you contact Damon Day and discuss your situation at length and make sure it makes sense for you and see if doing it yourself is a viable solution for you.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

Sincerly,
Steve

You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.




About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

2 Comments

  • A typically Chapter 7 will cost my clients $2000-$3000 and most of them will keep nearly all of their assets. Their credit score will improve faster and they cannot be taxed on the debts that were forgiven in bankruptcy. Under your hypothetical situation, you pay a totally of $31350 plus an unknown amount of monthly fees and there is no guarantee that you can settle all of your debts. So…how is debt settlement batter than bankruptcy?
    .-= Carl Starrett´s last blog ..Should Christians File for Bankruptcy? =-.

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