“Dear Steve,
I have a total of $17,000 in Credit card debt ($3800 in Business Credit Card Debt) from 6 different cards.
I am current on all my payments, however I have been unemployed for the last 7 months due to a disability and am running out of savings to cover the minimum payments.
I recently have received a loan of $10000 from a relative to help pay off the debt.
Can I negotiate with the creditors to settle for a lump sum even though I am still current on my payments?
Would it be possible to take care of the whole debt with the loan I received?
Is their any real success with Debt Resolution Plans? If so what company might you recommend?
William”
Dear William,
The very first thing I need for you to do is stop draining money you can’t replenish to pay for debt you can’t service. It’s a bottomless pit and an approach that will leave you broke and still in debt.
It might very well be possible to settle the debt with the funds you have received but creditors just don’t seriously negotiate settlements with people that are current. For the most part it’s a stupid creditor policy issue. Their computer systems don’t allow them to accept settlements until the customer is x days behind.
Believe me, it does not make rational sense but it is what it is.
The companies that appear to charge the least for coaching you through settling your own debt are Consumer Recovery Network, Debt a la Carte, ZipDebt and
If you use any of them to assist you in this matter, please come back and post a review of their services in the comments below.
I receive nothing for mentioning those companies or you using any of their services but it would be nice for you to mention you heard about them from this site.
But I would ask you to consider that a better approach to dealing with such problem debt would be to NEVER touch reserve funds in protected retirement accounts and instead talk to a local bankruptcy about discharging the debt without going back on the hook for another loan.
Take a look at the Get Out of Debt Calculator and review all your major debt relief options.
Please post your responses and follow-up messages to me on this in the comments section below.
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.
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