Negotiating a Settlement

**bwiab** · 04-21-2009, 03:11 PM

Hello I'm a newbie, but got some questions for you all. My credit is not very good between 500-550 and my wife's is about 50 points worse. Between the two of us we have about $23K in CC debt and 9 cards. As recently as a year ago I had gotten my credit back to 680, but my wife lost her job and we missed a couple of payments on some of our cards. I also broke my leg and we didn't follow up with all the bills and some of them have gone to collections. I am anticipating having $15,000 cash to pay off these cards in the next couple of months, but want to pay as little as possible. I am hoping to payoff most of the cards by negotiating a settlement with the card companies.

My plan is to first ask what they will settle for. Then ask for a bigger discount. Then suggest I will stop paying and wait until the account goes into collections so I can negotiate a better settlement.

Is there any difference in what my credit will be hit with if I settle with the credit card companies or let the cards go to collections? Will this hit be better in the long run than a bankruptcy? should I settle with the credit card companies or will my best bet be to let it go to collections and then negotiate down? My goal is to pay as little of the total as I have too while minimizing the impact to my credit score.

Thanks for any input you might have.

**Magic69** · 04-22-2009, 11:21 AM

A lot of your questions can be answered with common sense, when the situation is considered from the point of view of the creditors.

If you were a creditor, would you think a few late payments are better or worse than an account that has gone to collection, when considering granting a new credit line to an applicant?

If you were a creditor, would you think a few collections for an applicant were better or worse than if they had gone through and declared bankruptcy?

That's too bad that a few things went wrong for you and your wife. Credit scores exist so that creditors around the country can get an idea of how much they can trust that you'll repay your debts, and make a decision on risk based on that information.

Consider that and I think you'll be able to answer your own questions.

**Alfie** · 10-29-2011, 10:20 AM

You have nothing to lose by doing this, so I would try it. I would day that any future credit facilities maybe rejected because you have had to settle on credit you could not afford to pay. You need to weigh up if that matters to you. Have you spoken to a financial expert. Maybe a debt management plan would be considered as you will pay what you feel you can (but this will be worked out with the company) and will be a reduced amount then what your debt is at the moment.

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