Have an HSBC CREDIT CARD, have paid almost $237 in interest on a debt of $710, want to settle, make an arrangement, not in default, but in current status, how can I go about submitting an offer, to whom should I contact to settle the debt for less than the amount that is currently due, $506.77
Settling accounts for less than the balance owed is typically only an option after you have missed payments and are in advanced stages of delinquency. I would not recommend you attempt this given the information you provided for the following reasons:
- Settling smaller balance accounts will often not make sense given the fact that settlements require you be delinquent. Missing payments mean late payment penalties and increased interest rates. In order to save the most in settlement it requires you to have missed many months of payments. This means many months of late fees and interest charges and perhaps over limit fees when your limit is reduced to what is currently owed. When it comes time to settle for the most favorable amount you balance is now inflated to place where if you settle for 50% you may end up paying what you owed before you fell behind. You will have saved nothing.
- Were you to achieve marginal savings through settlement on a small balance account, you will have still negatively impacted your credit report and score increasing the cost of future loan products for a period of time. Not a big deal if you cannot pay a debt regardless of credit impacts, but if you have the choice and ability to save a couple hundred bucks compared to increased costs of future credit products, did you save anything in the long run? Probably not.
Debt settlement is triage when your only remaining alternative is bankruptcy. It is not a tool to be considered out of convenience, but from necessity and a thorough risk reward analysis weighed beside your current and near future financial capabilities.
Is there additional information you can provide that would suggest you are stuck in a place where continued timely payments to HSBC are going to create a hardship? If so, please provide more details in the comment section below.
Michael Bovee has worked with financially challenged consumers for the past 17 years and is a recognized expert in his field. Michael founded Consumer Recovery Network (CRN) in 2006. CRN offers debt settlement services and educational resources nationwide. He has served as its president since 2006.
If you have a debt related question you’d like to ask, just use the online form.