Will Creditors or Collectors Settle My Account for Less Than the Full Balance?

 

Credit card debt is on the increase!  With all of the inflation effecting everything we need, consumers are turning to credit cards to get by!


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What happens when you just cannot keep up with the monthly required minimum payments?


Will a creditor or collector accept less than the full balance?


If so, how delinquent do my accounts have to be?

If you find yourself in a severe financial situation due to:

  • Unemployment
  • Divorce
  • Illness or Disability
  • Too little income after retirement
  • High inflation and gas prices!!!!

You may be forced to use credit cards in order to stay afloat. 

Most people who do this plan to repay those accounts when things improve, but many times, things either don't improve or don't improve quickly enough!

So, you cannot keep up with the minimum payments due....

                           What can you do?

Credit Card companies will start to send you letters and make calls...lots of them!

They are trying to get you to start making payments again.

They will usually do this for 4-6 months and if no repayment arrangements can be set up, then they will either hire a collection agency or sell the account to a debt buyer.

Yes there is a billion dollar market of companies who buy older debt accounts for pennies on the dollar in order to try an collect for profit. 

Perfectly legal and it happens more than most people realize!

At some point in all of this, you may get a letter or email making you a SETTLEMENT OFFER. 

The offer may be for 20% - 40% or more of a reduction pf the inflated balance...

Don't forget late fees, over-the-limit fees and of course HIGH INTERST RATES.

But, dealing with a collector or the recovery department of a creditor can be very frustrating!

Most of the time these settlement offers come with a short time frame in order to make the settlement offer.

It is possible to get a good settlement with a monthly repayment plan that does not add more interest or fees.

For example, we settled a US Bank account for one of our clients recently:

Balance was               $ 13,799.86

Settlement for             $    5,519.94

Difference of               $    8,279.92

Since this client did not have the total needed for a lump sum payment, we were able to negotiate a series of 24 payments (NO ADDED INTEREST)!

   Click to see the actual settlement.

Some settlements are a little more or less, depending on a number of circumstances, but this will give you an idea of what a settlement looks like.

I hope this was helpful.

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