Ask The Get Out of Debt Experts Debt Settlement

Was Going to Signup With Superior Debt Relief But Decided to Try DIY Debt Settlement Myself. – Boyd

“Dear Steve,

90,000 IN CC DEBT

We are due to sign up with Superior debt relif. I have decided to pull my two largest balances off plan Bof A 35K and Citi 25k and settle on my own. I am 3 going on 4 months with out making payments. I want advice on the best first contact with creditors. Also what do you think of my plan?

THANK YOU

BOYD”

Dear Boyd,

The success of a DIY solution really depends on two things; 1) cash on hand, 2) knowledge about the process.

If you have cash on hand and you are ready, willing and able to settle you can certainly try your hand at it.

A couple of companies that specialize in teaching people how to settle their own debt are Consumer Recovery Network and ZipDebt.com.

Please post your responses and follow-up messages to me on this in the comments section below.

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READ  I'm Going to Get My Creditors to Settle the Debts or Accept Bankruptcy. - George



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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.

4 Comments

  • I’m in a very similar situation with approx the same amount in CC debt.  So far I’ve only been able to settle 1 out of 6 cards, but that’s due to not having $ as opposed to not receiving offers.  The card I settled was for around 45%.  One of my largest cards recently offered “up to 70% off” in return for a one time payment, although I’m not exactly sure what they mean by “up to” 70% off…. is it 70% off or is it something less?  Doesn’t matter at this point, though, as I simply do not have enough money to take advantage of the offer (I would if I could).

    Anyhow, I just wanted to mention that offers do come in eventually, at least in my case.  Nearly 2 decades of perfect credit, perfect payments and *poof* a wrecked credit history now.

    • John_00,
      I commend you on your willingness to fight the fight, but after reading your
      comment and those above I’ve got to tell ya it’s not the percentage that’s
      important it’s the term and your ability to perform. These creditors and
      collection companies are real good at spitting out unrealistic offers consumers
      simply can’t accept. The trick is to recognize this as opportunity and take the
      next step.

      John_00
      you state this is your largest card, 30% one payment … out of the question
      right…you don’t have the money….but, what if 40 -50% over 12 -18 or even 24
      months starting off with a small payment early on, then ratchet it up later,
      giving yourself the ability to continue to save for another settlement or at
      least the ability to stop a problem if one developed. Negotiating settlements
      on a portfolio of debt requires planning, time management, and creditor/collector
      specific knowledge, knowledge of the debt process and negotiation skills. Don’t
      think it’s so easy and remember this; defaulted debt today is moving much
      quicker to legal status.

      • As quoted from above, Mike, it appears we have the same mentality…

        “My last piece of advice. The DS mentality has created a “more More MORE” mentality. In other words,a settlement of 50% is frowned upon by DSC’s because their overpromising has reached indescribable levels. However, getting HALF OF YOUR DEBT forgiven is a gift. Even a third. So don’t get greedy and try to get a 20% or 25% settlement from everyone. If you can afford to get out of debt with a settlement that seems fair, you are blessed.”

        A 70% settlement is a gift in my opinion. Cutting 30% of what you contractually owe! Seriously, If somebody can get a 50% or 60% settlement, even 70% offer from their creditor, and they can afford to pay the terms around that deal, or negotiate affordable terms for that deal, they should JUMP ON IT. Banks send offers all the time. Its just that DSC’s have created this whole “30% standard” that just isn’t real. Its a marketing tool to put a couple settlement letters on their website and leave the 80% letters out of their marketing pieces.  

        The biggest hurdle for anyone like this is having the discipline to put money in a shoebox each pay period…

  • You may have a fighting chance. Reality is, there are only two things a DSC provides: One is discipline and the other is experience. Discpline meaning the ability to put you on a strict routine of putting “$X” aside each month. If you can do that on your own, you are half way there. The experience is less important. At the point you are currently at, 3-4 months past due, you should be getting letters offering you settlements from the bank. They want to work with you on some level, as much as their collectors may make that hard to believe at times.
    Give it a try. When the bank sends you a settlement letter offering to accept something less, like maybe 50% of the balance, or a lot less sometimes, call them up and ask them to figure out how to put that into a payment plan that you can afford. If you are already enrolling other accoutns in a DS program, your credit is going to get a lot worse anyway, and so will the collection calls. SO don’t be pressured. The deals will probably be coming in until you are 5-6 months delinquent. Then you will be sent to a third party, maybe a law firm, depending on your current assets and employment status. Again, no different than what will happen with the accounts you have enrolled in the DS program.
    So the real question is: do you have the money, or the access to the money when they offer a settlement? Getting a settlement negotiated isnt hard; it’s having the money to pay it when the time comes.  
    My last piece of advice. The DS mentality has created a “more More MORE” mentality. In other words,a settlement of 50% is frowned upon by DSC’s because their overpromising has reached indescribable levels. However, getting HALF OF YOUR DEBT forgiven is a gift. Even a third. So don’t get greedy and try to get a 20% or 25% settlement from everyone. If you can afford to get out of debt with a settlement that seems fair, you are blessed. ** Dont forget the tax conseqeunces of any debt forgiveness greater than $600. Talk to your cpa about that.

    Hope this helps. It’s all opinion… 

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