What’s the Best Way to Settle My Own Debt With Capital One & Discover? – Pablo

“Dear Mchael,

I wrote you earlier. You advised me well that I might want to try and settle with my creditors myself before going into bankruptcy proceedings. My current status is I am waiting to hear from my creditors. I also, as you suggested, followed up with Halo Debt Solutions. They said if I could discharge them in chapter 7, I should try that. They had no more advice for me.

How long should I expect to wait for a response to a settlement offer I have made to my creditors?

I wrote letters to offer settlement on 4 accounts. 2 are with one company, BofA, and one is Discover, and the other one is Capital One.


When you are looking at negotiating a settlement with Bank of America, Discover, or Capital One, the phone is your friend. Mailing letters to these banks is not typically going to generate the response you are looking for.

Successfully settling with an original creditor is a mixture of timing, money, and communication. You want to get a grip on these 3 concerns up front.

Timing credit card debt negotiation

Settling a credit card debt with an original creditor for the best savings is typically going to occur in the last month the creditor holds the account in house before assigning the debt out for collection, selling the debt off to a debt buyer, or placing your account with a collection attorney. Banks typically will hold an account for internal collection efforts up until they charge it off. Charge off generally occurs after your account goes unpaid for 180 days. This 180 day timing element is not an exact science with all banks, or all accounts, but it is a fairly consistent timeline to start your debt negotiation and settlement planning from.

There are instances where some creditors may offer their lowest settlement in the 3rd or 4th month of missed payments, but those situations tend to be one off scenarios, or short lived early offer settlement programs.

Money to complete settlements with your credit card banks.

Your ability to fund offers to settle as they are negotiated is a fairly obvious part of the equation. How much money you have available to complete the earliest settlements, when you are juggling negotiations with Bank of America, Discover and Capital One, will often dictate priority of creditors and whether or which credit card to settle first. Here is an example:

See also  Bank of America Credit Card Debt Settlement Advice and Instructions

Bank of America debt totals 10k. You want to settle with them at 40%, so 4k. Discover debt totals 8k and they will take 4k. You only have 4k to settle accounts in the first stage of collections (settling directly with the bank before they send it out for collection or sell off your account). Which one do you take advantage of first? The math suggests you take advantage of knocking down settlements with Bank of America first. But Discover currently has more of a reputation for referring accounts out for aggressive collection, so perhaps settling the Discover credit card with your available funds first makes more sense.

If you are in a position to settle with Capital One, Discover and Bank of America in the first stage of collections by negotiating directly with the banks themselves before your accounts enter the collection pipeline, than the combination of timing settlements and your available money is not as big a concern. If you post a comment about the balances on each account, and what amount of money you will have available to settle with in the 5th month your are late with payments, I can respond with more targeted feedback.

Just know that each of your credit card lenders is going to have a floor they will accept when settling your unpaid credit card debts with you before the accounts are no longer being handled internal of the bank.

Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.

Communications when settling credit card debts with banks.

There are variables to consider when you are settling credit card debt. One of the more consistent variables is communicating with your bank over the phone when you are negotiating a settlement or a payment arrangement. Letters offering settlement are just not a consistent way to handle coming to an agreement. Banks are not set up for it.

Calling lenders like Bank of America to come to terms with a credit card settlement you can afford, and they will accept, is a fairly painless process. There are some things to avoid saying, but for the most part, you stick with communicating why you cannot pay, and why a lower monthly payment arrangement won’t work. I often recommend you have this conversation with your on your terms by initiating the call yourself. You can call before you know you have the money in hand to settle, or before you know the bank is going to accept a settlement (you are not late enough with payments to trigger a settlement agreement being accepted). There are a few things to be prepared for in this type of call. Here are a few:

  1. The bank will try to get your account turned around by offering a lower monthly payment, either temporary (6 to 12 months), or for the life of the balance (60 month plans).
  2. The bank may as a series of questions about your income and expenses prior to agreeing to a settlement amount with you. Bank of America is a good example of this. They have become more consistent with asking a series of questions prior to agreeing to the amount they will settle for.
  3. If you are paying other unsecured creditors, the recovery specialist you are on the phone with may question why they are not getting paid.

None of that is stressful or unmanageable. My point is, calling in to negotiate a settlement with banks is not something to avoid. Making calls to come to an agreement is in fact how your settlements are going to get done. Not by writing in.

If you can post a reply with additional account details referenced above, as well as how far behind you are with each account, I can offer some more detailed feedback to help you navigate, and better prepare for the process.


Michael Bovee founded CRN, a unique company offering debt negotiation education and services, in 2004. He recently published CRN’s free online debt relief program as a tool to assist you with making informed decisions about dealing with problem debt, while keeping an eye on your future credit needs and goals. Bovee has been contributing articles and free reader feedback on this site for several years.

Michael is a debt industry professional who has volunteered his time to help answer reader questions.

If you have a debt related question you’d like to ask our team, just use the online form.

3 thoughts on “What’s the Best Way to Settle My Own Debt With Capital One & Discover? – Pablo”

  1. I was so glad to see this post…..I have a long term credit card debt and I am able to make minimum payments. I have spoken to a Debt Settlement Organization who will ‘negotiate’ for me but the process is for me to become delinquent, set up a fund that will be used to pay off one creditor at the time so that the Organization can then ‘make an offer’ for total payoff. I had another situation years ago where the Debt Settlement Organization negotiated a reduced monthly amount to each of my creditors at a lower interest rate and I never went through any harassing phone calls or anything like that. Are there still Debt Settlement Organizations that work that way rather than just stop paying the creditors at all and everything going to collection agencies and such. I did not suffer through that with the organization I used in the past.


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