Quick Answer: Credit card negotiation works best when cardholders can demonstrate genuine financial hardship without threatening bankruptcy, as mentioning bankruptcy may prompt immediate account closure. With $70k debt requiring $2000 monthly payments, the cardholder should emphasize their commitment to payment while requesting hardship programs or temporary rate reductions.
Five years after I lost my job, I find myself with $70k in consumer debt. I am paying approx. $2000 per month and am tracking and forcasting. My debt has changed very little in the eight months tracking due to some high interest rates.
I have considered bankruptcy but want to try to dig out on my own. I am very skeptical of the “services” that offer “counseling” as I feel I can do this myself. I have not been successful negotiating for lower rates. What should I say and not say as I am negotiating. My success or lack of will determine if I throw in the towel and file. How can I get that point accross without putting myself in jeopardy?
Thanks for your help
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Before You Sign Anything: Run any debt relief contract through the free Contract Decoder to spot hidden fees and unfair terms. Check the company’s complaint history with the Scam-O-Meter.
Compare Your Real Options: Most debt relief companies won’t tell you about all your options — especially the ones they can’t profit from. Credit counseling has a 21-27% completion rate. Settlement resolves about 1% of enrolled debts fully. Bankruptcy has a 95% discharge rate — and protects your retirement. Take the Find Your Path quiz for a recommendation based on your actual numbers.
One thing to keep in mind is that it could be the case that not all creditors offer long term hardship programs (or short term for that matter). If you have a large balance with a particular creditor, a short term hardship program gives you a reprieve, but it may not give you enough time to pay off your balance. Digging around and trying to find out whether your creditors offer such programs may be a good idea before you decide what your next step is.
Major credit card issuers offer hardship payment plans. The big three that control roughly 60% of the credit card market are BofA, Chase & Citi.
If you have accounts with large and small issuers you can establish your larger balance/larger bank issued accounts in a hardship plan on your own and enroll smaller balance/smaller issuer accounts that will not offer lower payment plans direct to you in a DMP with a credit counseling agency.
Temporary plans such as are offered Capital One can be renewed depending on the banks policy at the time. Smaller local and regional credit union credit cards may be limited in the plans that can be offered direct to the consumer. You can also look to enroll accounts that only offer temporary plans into a DMP with a service provider.
You may find that once you have your larger accounts enrolled in an internal bank hardship plan that you can manage the regular payments on the smaller balances without the need for payment reduction and could be successful in applying your own self styled debt roll-up/snowball strategy. Check out http://www.readyforzero.com for more self managed debt repayment tools.
Major credit card issuers offer hardship payment plans. The big three that control roughly 60% of the credit card market are BofA, Chase & Citi.
If you have accounts with large and small issuers you can establish your larger balance/larger bank issued accounts in a hardship plan on your own and enroll smaller balance/smaller issuer accounts that will not offer lower payment plans direct to you in a DMP with a credit counseling agency.
Temporary plans such as are offered Capital One can be renewed depending on the banks policy at the time. Smaller local and regional credit union credit cards may be limited in the plans that can be offered direct to the consumer. You can also look to enroll accounts that only offer temporary plans into a DMP with a service provider.
You may find that once you have your larger accounts enrolled in an internal bank hardship plan that you can manage the regular payments on the smaller balances without the need for payment reduction and could be successful in applying your own self styled debt roll-up/snowball strategy. Check out http://www.readyforzero.com for more self managed debt repayment tools.
Hi Glenn,
If you want to accomplish the same or better rate reduction as Credit Counseling can with many of your creditors, you will generally need to be behind with payments. Some creditors will offer hardship plans after a week or two of missing a payments, while others may only offer the best plans when you have missed a complete billing cycle.
Read this link to another article on this site that covers the topic: https://getoutofdebt.org/27478/bank-sponsored-direct-to-consumer-hardship-plans-for-credit-card-debts
If you have specific questions post them here in the comment section and you will get some helpful tips and feedback.