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Will Banks Give Me Special Repayment Terms If I Keep Making My Minimum Payments. – Charles

“Dear Steve,

Credit card debt of $80000 and barely able to make mortgage payment. Retired with fixed pension, Social Security income, and some consulting income.

Will banks or credit card companies talk with me about reduced payments or creditcard balances if I continue to pay monthly minimum?

Should I stop making even minimum credit card payments, then try to negotiate reductions? How long?

What hapens if I stop making payments, but credit card fees and interest take balance above maximum available credit?


Dear Charles,

It’s a Catch-22 situation. The only way to get to reduced interest rates without falling behind it to click here for credit counseling information. A credit counseling program will not lower your payments below the minimum payment you are making now.

If you fall behind on your minimum payments you will wind up in collections and it will hurt your credit. After four to six months of collection calls and lawsuit threats you may find your way to settlement offers with your creditors. To take advantage of those offers you will need to be prepared to pay lump sum amounts and they will probably be in the 40% of your balance range.

Just be aware that settling debts can have tax implications and you may have to pay income tax on the forgiven debt. Additionally, unless you get the correct documentation from the bank you could later wind up owing the forgiven balance if it is sold to another creditor.

If you want to investigate the debt settlement route and do it yourself, get some professional instruction on what to do by contacting Damon Day.

But ultimately settling your debts may not be the best approach if you are just barely making ends meet, can’t save up money to settle and primarily living on benefits. In that case you can click here to talk to a local bankruptcy attorney and if you’d like a second opinion about your situation or a personal consultation by another debt coach, please feel free to contact Damon Day.

If you are eligible for a Chapter 7 bankruptcy your debt could be discharged in a few months and you’d have a chance at a fresh start.

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.


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.

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