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Chase Bank Says They Won’t Settle Our Debt And Want Us to Go Bankrupt. – Sarah

“Dear Steve,

My husnabd and I are in the process of trying to settle $25,000 (just under) of debt with Chase (Visa credit card) for $10,000 (it would be a ‘one time’ payment – to come from my wonderful brother). We are now 5 months without making a payment to Chase. We have offered them the $10,000 and explained the circumstances – both of where the $10k will come from (lump sum from family) and why we have no money so can not make payments of any kind (which is 100% true and we can document that we are broke).

We have spoken to Chase reps 4 times over 4 months and written to them once. First 3 calls/reps told us our account was not eligiable for a settlement and to call back in ’30 days’ and ask again. But also, first call/rep told us $19k ‘could work’ and 3rd call/rep told us $17k ‘could work’. On our 4th and most recent call we got passed through to a ‘manager’ (I requested this) . He told us ev erthing we had been told by first 3 calls/reps was completely wrong. He told us our account will never be eligiable for a settlement as the principal part of our debt must be paid down to a ‘certain amount’ first.

However, he said he could not tell us (or give us an ‘idea’ even) what amount of the principal has to be paid down. He said this ‘princiapl pay down’ requirement (before being eligiable for a settlement) is a Chase ‘regulation’ and can not be changed for ANY reason, but that he was not privvy to what amount (%) of principal had to be paid down.

He insisted Chase frequently turns down settlement offers that then resulted in the debtor filing bakruptcy so Chase ended up with nothing. He agreed it made no sense but that there are ‘regualtions’ they must abide by. He encouraged me to do a 60 month payment program, even though I told him we can’t make the payments.

See also  Use a Debit Card from Chase Bank? Prepare to Have it Declined.

Based on the above, my question is, in your opinon: are Chase giving us a ‘song and dance’ of nonsense hoping we’ll opt for a 60 month payment program, when in fact they will accept the $10,000 settlement ‘in a month or 2’? Or – is it likely that they will never accept a settlement in which case we either have to file bankruptcy or they will sue us, (whichever happens first?).

Many thanks!

Sarah”

Dear Sarah,

Before I answer this can you give me an idea about what your total debt situation looks like? Is this your only debt or is there more we need to worry about?

I’m guessing you have no big assets or equity to your name.

What state do you live in?

It’s important that when it comes to dealing with creditors, often logic and commonsense are not the order of the day.

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

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.

28 Comments

  • every one who tries to settle now reads up on the internet first. there has been an avalanche of debt settlement the past few years the customer service reps are getting pretty savvy about finding ways to extract every dollar they can.

    by offering to settle, you have demonstrated a desire not to file bankrupcy, they are trying capitalize on that desire by getting you to just start handing over cash with no promise of a settlment in sight. im sure its a move that works on many.

    i would not call them back. wait at least a month. see if they call you. if they do, tell them you are unable to pay, and are looking into bankrupcy. they don’t want you to file, no one woring for a bank is that dumb, they want you to pay.

    also if you do just want to get it over with, i think the magic number for chase is a 60% settlement offer. if you can gather another $5,000 this could be over tomorrow…

    best of luck.

    i would not bother with the lawyer. if you dont have assets to protect you dont need one.

    • Laura,  reading your reply was refreshing and encouraging.  So many posts have been negative about debt negotiations.  I am looking to settle on one of my credit card debts and I currently have no bank accounts.  My husband is not on my credit card.  Can they still sue me for his assets, or money in the bank?

      • Mary, if your husband is not on the credit card account with you, then assets held solely in his name are not at risk unless you live in a community property state. Even then, you should still be able to settle the debt before it becomes a legal matter, provided you have resources to settle with in a timely fashion.

        • Charles, thank you.  I live in CA and it is a community property state.  I have been putting the money together and preparing myself for the negotiation.  We have 2 cars under my name and one is paid off worth around $7000.  My husband and daughter drive it.  Is this something they might want to take?

          • Mary, it’s very unlikely this would ever come up. I’ve never once seen an unsecured creditor seek recovery by taking a paid-off vehicle. They don’t want your car – they want money. 🙂 Also, since they have no lien on the vehicle, they would need to first sue you and obtain a judgment. You’d see that action coming and still have time to react and negotiate a settlement.

    • Laura, good advice, but 60% is *way* too high for a Chase settlement! There’s no reason it has to come in that high if timed correctly.

      • yes, i’m sure she can do better if she waits. eventually they will probably settle for under 40%, but the waiting can get pretty nervewracking for some. since getting a judgement or filing bankrupcy would both be pretty bad for her husbands fidicuiary bond, I could see how she may have a strong desire to just stop having to worry about all of this. 

        if she wants it over right away they will jump at 60%, probably even 50%. if she wants lower, then she will have to wait.

  • Thank you all!  We are committed to doing what we can to make a settlement work with Chase however I agree that we have probably not handled the negotiations as well as we could have!  You see, we wanted to take the honest, up front approach and lay our offer on the table from the get-go but I can see that was probably not very shrewd of us!  Are Chase still accepting settlements ‘in general’ ?- its well documented that they have in the past but does anyone know if they still are?  Are they basically ‘making up a story’ when they talk about ‘regulations’ and ‘paying down Principal first’?  I am very willing to change our tactics with them and tell them we are now going to use the $10k to pay off other debt because those other creditors are willing to work with us.  Truth is Chase is our only creditor which is why we are so agressive in wanting to settle with them.  If we ‘get rid of’ this debt it will have a hugley positive impact for us.  Our credit is already in the doldrums so it can only get better after we shed the Chase debt (it will take a while for sure).  Avoiding bankruptcy is a bigger deal for us than many as my husband must carry a fiduciary bond for his work – its non-negotiable.  We have to make a settlement work with Chase so any help you can give us with regard to that will be received very gratefully!  We accept that we have to be in it for the long-haul!   FYI – we live in South Florida.

    • Sarah, thank you for your post.  I also have a large credit card balance but with Bank of America.  They keep sending me mail asking to call them for payment options.  Last time I talked to them 2 months ago, they offered me no help.  I have been tempted to give them an honest call too but after reading your message, I can see that it might not be a good idea.
      I have talked to an attorney for a debt settlement but I’m concerned about being sued and make this ordeal even worse and more expensive.

    •  Charles Phelan of ZipDebt here. Sarah, I can confirm for you that you’re just getting a typical collection runaround. Chase is probably one of the easiest major creditors to settle with right now. You’ve made some common beginner mistakes — talking settlement too early and starting with an offer too high. Most of my clients are able to get 25-35% settlements with Chase before the charge-off deadline (at 6 months of delinquency). Please feel free to get in touch with me directly if you wish to discuss further.

      • HI Charles, how is it negotiating with Bank of America?  Are they settling easily?  My situation is different, since I have 2 BofA accounts, one with a larger balance and over 90 days past due and one with a smaller balance and I’ve been paying the minimum.  Also, 2 other cc that I’ve been managing the monthly payments.  

        • Mary, BOA is a very straightforward creditor to work with on settlements. There can be some roadblocks involved, but usually they will offer a reasonable settlement before the charge-off deadline. You really aren’t doing yourself any favors though by paying one account and letting the other go. If your thought was to keep the smaller account intact for future use, BOA will close it down eventually anyway. It’s best to go “all in” per creditor when doing debt settlement.

          • Thanks Charles, the attorney I am thinking of working with advised me to continue the payments.  I do agree with you. How about the other 2?  It’s with Chase and Universal Card. I would like to keep one or two open if possible.

          • Mary, it depends on the balances you are carrying on these other cards, as well as other factors like whether you’re current on mortgage and car payments, etc. Generally speaking, people do debt settlement to get out of debt, not to hang on to some of it. 🙂 But it’s often possible to come out the other side with one or two intact accounts. That said, you need to be aware that these creditors will probably lower your credit limit as your credit score continues to deteriorate.

      • Thanks so much – to all.  Have I ‘screwed up’ beyond repair here with my $10k settlement offer etc.? I believe we’re between 4 and 5 months delinquent (pretty sure it will be 5 months on July 3rd) and my most recent phone call (Chase called us and we answered the phone) was almost a week ago.  I dont know how we change tactics when we are so close to the 6 month ‘charge off’ deadline, but we are committed to making a settlement work and will do whatever it takes!   Do we just do nothing now?  They call us about every 2 days and have done for the past 3 months. We are OK with ignoring their calls (we already ignore most of them – as you can see we pick up and speak about once a month) but how do we let them know they the $10k offer no longer exists?  How do we now ‘force their hand’?  We truly want and need to avoid bankruptcy, we truly do have a lump sum available to us up to 40% of our debt  (but only for a final settlement – my brother will not give it for any other reason)  so we just have to be able to make a settlemnt happen – right ?!  But how?!  Many thanks.

        • Sarah, no, you have not screwed up beyond repair just because you previously offered $10,000. It’s difficult in a blog comment to cover everything you would need to know — I have an 8-hour training course on this subject! But the short version is that you need to go quiet for at least a couple of weeks to reset the conversation. After that, it’s fine to lower your offer. Nothing firm was committed either way. They did not commit to accept $10k and you did not formalize the agreement. Everything else from here is a negotiation, and it’s all based on the resources available to you.

  • Yes, Chase is giving you a song and dance but now that they know you have access to that much money readily available it will take longer than 2 months. In my opinion, you jumped the gun and may have come across too desperate and eager to settle with all of those calls and again just my opinion but offering $10k to start and telling them that you had someone lending you the money would lead one to believe that if you were desperate you could get more so naturally any collector will play that card and threaten lawsuits.  To start, stop calling with offers, let them call you and when they do withdraw your offer from the table – tell them that because they would not work with you the 10k is about to be used to settled another debt unless they accept but if they do not accept you will then use those funds and they will get nothing until you are able to save for a future settlement.  Watch them start stuttering and mumbling.  If you are worried about getting sued, get a hold of Veritas Prepaid Legal Plan for attorney coverage but just stand your ground with Chase and you will prevail.  Fell free to contact me for more pointers [email protected]

    • I am just about to start working with an attorney to settle part of my credit card debts. So this program is for consumers not currently working with attorneys, correct?

      • It depends Mary, if the attorney is charging you an upfront retainer fee then the legal plan would not be available but if your attorney is charging fees based off of performance then yes it will work.  

  • No assets worth mentioning but this is our only significant consumer debt – we live paycheck to paycheck but are able to handle (with a struggle) our other very moderate (less than $2,000) debt and expenses.  We live in Florida.  We really want to avoid bakruptcy as it will impact the fiuciary bond my husband needs for his work.  We want to settle with Chase for $10,000 (slightly under $25,000 debt) as my awesome brother will give us that amount.

    Thanks! – and sorry for spelling husband so badly in my last post!!

    • Which impacts him less, being possibly sued over the debt and having a negative mark on the credit for seven years or a bankruptcy to allows you to move forward with your lives in 3 months or less.

      Where, approximately, in Florida?

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