Can I Negotiate With My Own Creditors to Settle My Debt? – Lesley

“Dear Steve,

I currently have $39,000 in credit card debt spread across 5 cards. Two with Chase and 1 each with Citicards, Bank of America, and American Express. I am not behind on any payments, but am only able to make the minimum due on each card every month.

I expect that in the next month I may be receiving a one time lump sum of $30,000. I would like to use this money to pay off my credit cards completely. Is it possible for me to directly negotiate a settlement with my credit cards companies, even though I am not behind on payments?

thank you for your time,


Attractive red-haired female reading a manual before do-it-yours

Dear Lesley,

Having cash on hand to settle puts you in the best position for success. There are a couple of considerations before you proceed.

For example, you will want to make sure you take into account any income tax you may owe from the bulk funds. You will want to set those aside before you determine the pool of money you have available to settle with.

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

Next, you will need to factor in if you are currently insolvent. If not, you will owe income tax on the forgiven debt. So we will need to deduct that from the lump sum of cash as well.

After that, each creditor is different but you should expect that your creditors will not even begin to settle as long as you are current. You will need to be 60-90 days behind before you get to the right people to settle.

Falling behind has consequences. Your delinquent status will appear on your credit report for seven years and it will lower your credit score. Just be aware of that.

If you would like someone to personally coach you on how to settle your own debt you can contact debt coach Damon Day and he can be a big help in this process.

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Additionally, I have received an offer from Michael Bovee and Consumer Recovery Network who has offered to coach a reader through it for free as long as the reader is willing to share their experience here in the site.

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

Damon Day - Pro Debt Coach

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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.
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