I have 20,000 on 2 credit cards and a an interest free loan of 15,000 from my mom. I would like to be able to pay off both cards with the 15,000. Is there a way to request to see if the 2 companies would reduce the amount I owe them if I paid it off immediately or is there a legitimate program to help me do this? I appreciate any information you can give me to help pay this off.
It is a rather straight forward process to see if your creditors will settle the debt for less. You don’t need a company to help you. Here is what you need to do.
- Stop making payments on the credit cards.
- Field collection calls and letters.
- Watch your credit getting worse.
- Be threatened or actually be sued for not paying.
- Potentially have a court date. Be sure to go, you are going to lose if you don’t go but probably will lose when you do. What is your defense? I’m not paying them so I can get a better deal and pay them off for less?
- After 100 days or so behind on your credit card payments then call your creditors and see what offers they will take.
- Get offers in writing so you’ll have proof latter what they agreed to. Years latter they will claim they never agreed to anything.
- If a creditor refuses to settle, then they refuse to settle and you’ll have to make other arrangements.
- If a creditor says they will report the settled debt as ‘Paid as Agreed’ just know that they will negatively report the debt forgiven on the same credit report.
- You will owe income tax on the amount of debt forgiven by the creditors. Be sure to save part of the $15K to pay the IRS bill when it comes at the end of the year.
- Your credit will be trashed by all of this. You’ll then have to try to rebuild your credit.
See, I told you it was a pretty straightforward process. Certainly not worth paying some debt settlement company $4,500 to do for you.
P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.