Solicitations to settle credit card debt

[Miss Mary Poppins]

Ok so this post is two things.

The first is this past week we got two offers to settle our credit card debt balance of $20,000.00 for $9679.00. Then a second for a $17,000 balance for $11,000. Problem is we don't have credit card debt. We did two years ago but nothing that large. This caused me to check our credit today.

The second part of this post is a question... You can actually settle and pay less for credit card debt?

Did you know this? Isn't that bankruptcy?

 

[dawnball]

The second part of this post is a question... You can actually settle and pay less for credit card debt?

Did you know this? Isn't that bankruptcy?

Yup. You can. It's not bankruptcy. It's negotiation, and "money in our pocket is better than money we're never going to collect." As a general set of rules: you're going to take a nasty hit on your credit report, you may owe tax on the written off portion of your debt, you're going to be blacklisted by the credit card company, debt settlement companies are going to make money off of you.

Credit card companies do it because if you file bankruptcy there's a decent chance they get nothing. If you aren't in a position to file for bankruptcy, you're probably SOL.

It's more useful to know that if you're temporarily in a bad spot - you can call your credit card companies and ask for a forbearance. Your balances will still accrue interest, but you'll be paying as agreed (so no extra credit hit), and you're usually spared the late payment/underpayment fees.

 

[Cheshire Figment]

Rip Off!!!!

However, the company that called you is probably not related to the credit card company. If you follow them, they will probably collect fees from you and not pay your bills.

 

[Planogirl]

It's not always a rip off. You could check with the original company to find out where the debt is if you want to pursue it. I wouldn't just ignore a debt. You could end up with a judgment which is pretty damaging to your credit.

Why are you getting these settlement offers? Are you being mixed up with someone else?

 

[NYCDiane]

Ok so this post is two things.

The first is this past week we got two offers to settle our credit card debt balance of $20,000.00 for $9679.00. Then a second for a $17,000 balance for $11,000. Problem is we don't have credit card debt. We did two years ago but nothing that large. This caused me to check our credit today.

The second part of this post is a question... You can actually settle and pay less for credit card debt?
Did you know this? Isn't that bankruptcy?

If these aren't your debts, don't pay them. What I'm wondering is, the cards you allowed to go delinquent.... is it possible this is for those cards but with a ton of added late fees, overlimit fees, etc etc etc?

Call the companies of the cards you're delinquent with. Find out what collection agency has your debt now.

Even if they are "charged off" you still owe the debt so don't let anyone tell you you're not.

Even if the credit card company SOLD these to the debt collection agency, you still owe the debt (only to a different company) so don't let anyone tell you you don't owe it.

YES, you can settle your credit card debt for a lower amount. If they're asking for $9679 to settle a $20K debt, they will absolutely go lower. See if you can get them to take $5K in one lump sum. Same for the other one: if they're offering to take $11K for a $17K debt, offer $4K in one lump sum.

TWO THINGS TO CONSIDER IF YOU'RE GOING TO SETTLE: 1. You will have to pay taxes on the amount that is being forgiven. It is considered income and you may get a 1099 at the end of the year (this is for any amount $600 or over that is forgiven) 2. On your credit report, it's going to say "settled for less than the amount owed" --- it won't say how much you paid; only that you settled.

Good luck!

 

[disykat]

OP said she doesn't have debt. She's getting junk mail offers. I get offers all the time to refinance, but have no mortgage. I think it's the same thing.

I agree with the OP that it's kind of a shocking/interesting notion that there are places out there who are in the business of "settling credit card debt." I didn't know they existed either.

 

[tasha99]

If these aren't your debts, don't pay them. What I'm wondering is, the cards you allowed to go delinquent.... is it possible this is for those cards but with a ton of added late fees, overlimit fees, etc etc etc?

I don't think the OP said she had delinquent accounts.

 

[Darcy03231]

OP we get these all the time in the mail, practically daily. We have no debt other than our mortgage. We do use our credit cards monthly and pay them off. I have no idea where these companies are getting their information because we've never had the amount of charges in a month that on are the letters/flyers. I just toss them as junk mail.

 

[3BoysRDisneyFreaks]

If these aren't your debts, don't pay them. What I'm wondering is, the cards you allowed to go delinquent.... is it possible this is for those cards but with a ton of added late fees, overlimit fees, etc etc etc?

Call the companies of the cards you're delinquent with. Find out what collection agency has your debt now.

Even if they are "charged off" you still owe the debt so don't let anyone tell you you're not.

Even if the credit card company SOLD these to the debt collection agency, you still owe the debt (only to a different company) so don't let anyone tell you you don't owe it.

YES, you can settle your credit card debt for a lower amount. If they're asking for $9679 to settle a $20K debt, they will absolutely go lower. See if you can get them to take $5K in one lump sum. Same for the other one: if they're offering to take $11K for a $17K debt, offer $4K in one lump sum.

TWO THINGS TO CONSIDER IF YOU'RE GOING TO SETTLE: 1. You will have to pay taxes on the amount that is being forgiven. It is considered income and you may get a 1099 at the end of the year (this is for any amount $600 or over that is forgiven) 2. On your credit report, it's going to say "settled for less than the amount owed" --- it won't say how much you paid; only that you settled.

Good luck!

No mention from OP about having debt any more. They are just curious if this is valid.

 

[NYCDiane]

The OP said:

Problem is we don't have credit card debt. We did two years ago but nothing that large.

And then went on to ask if credit card debt could be settled and thought that was bankruptcy so his/her question is kind of confusing.

If you have NO DEBT and are getting letters asking to settle your debt, why would you even question it?? I would put the letters aside and order copies of my credit reports to see if someone has used my info to get credit.

I hope the OP comes back to clarify.

 

[disneysnowflake]

We have zero debt and haven't had a mortgage in a long time, but every single day (and sometimes multiple times a day) we get phone calls with a recorded message stating that if we have over 10K in credit card debt, they can settle for a lower amount.

I've tried blocking their number, but Verizon says this number is technically hijacked from an overseas location, so it can't be blocked. The calls I get come from a Washington State area code.

I put the phone number into Google, and it came up on Who Calls Me with a ton of people having this same exact issue from this same number.

Just be careful.

 

[girli565]

i get these all the time. We have a small amount of CC debt that we are currently paying down. The estimates on what we owe are waaaaay more than what we actually owe. I think these are just junk mail. I shred them and don't think twice. my credit report is accurate so I'm not worried.

 

[Marionnette]

The OP said:

Problem is we don't have credit card debt. We did two years ago but nothing that large.

And then went on to ask if credit card debt could be settled and thought that was bankruptcy so his/her question is kind of confusing.

If you have NO DEBT and are getting letters asking to settle your debt, why would you even question it?? I would put the letters aside and order copies of my credit reports to see if someone has used my info to get credit.

I hope the OP comes back to clarify.

I can see where you might have gotten that impression but it's not what I came away with when I read the OP's post.

It's not unusual for these vultures to target certain marketing areas based on a high percentage of CC defaults in a zip code. It probably has nothing to do with the OP's credit score or record of payment. More than likely, it has much more to do with the neighborhood the OP lives in and how the people in her community are dealing with their debts. The offer was just a blanket mailing to every home in the area and included an example of what they "can do" for those debt amounts. It belongs in the circular file.

And to answer the OP's questions: Yes, it's possible to do this. Yes, I knew that you could do this. No, it is not the same as bankruptcy.

 

[scard192]

I also have no mortgage and at most $600 in credit card debt and get these type calls several times a week; irritating to have to delete them off my vocie mail. LEAVE ME ALONE, not interested.

 

[disykat]

I would .........order copies of my credit reports to see if someone has used my info to get credit.

Exactly what she said she did in the OP!

 

[patsal]

I also have no mortgage and at most $600 in credit card debt and get these type calls several times a week; irritating to have to delete them off my vocie mail. LEAVE ME ALONE, not interested.

Us too, drives me crazy!