But it really *is* bad debt

Bad debt

Think about it as if it were a relative of yours. You loan this relative $500, they don’t pay for a year and then they offer to pay you $250 to “call it even”. You haven’t seen any money for a year so you figure that you might as well take what you can get from this “deadbeat”.

Then Uncle Charlie calls you asking what you think about him loaning this same “partial deadbeat” relative some money.

What are you going to tell him?

If you are sending them payments every two weeks you don’t need to call them. However, be aware that they will certainly call you. They will tell you that they can’t accept these small payments (lies) that you NEED to make the minimum payments (lies) and that they are going to call your mommy and tell her you’ve been a bad girl (probably also a lie).

Just keep sending the payments and only talk to them about the account once every two weeks. Even if they call every day simply remind them that you are only going to talk to them once every two weeks and hang up.

It *is* a tough road and hopefully we’ll all be a bit smarter for the trip 😉

Years ago I had a friend


Years ago I had a friend who settled with his creditors and he told me there is a code they can use on credit reports to reflect neither positive or negative credit rating. Its one of those conversations you think you would remember, but I forgot what the code was and I haven’t seen this friend for years.

But, I would think if you mentioned that to them. I mean ask if they are willing to put something on your credit report that doesn’t state negative or positive, just neutral. But, he said get it in writing before you pay the settlement.

I wouldn’t worry about calling

Credit score

I wouldn’t worry about calling any of the creditors as most do not keep accurate records, or any records at all of phone conservations.

You should keep your communications to the creditors in writing making sure that you keep copies for future reference. This put the history in some form of “provable” form in case it comes to some sort of a lawsuit. You can show the judge that you have made every attempt to handle the situation.

Also when you call that gives them a chance to try to exploit any weakness and get you to pay more. Talk to the creditors on your terms and never theirs.

I think they negotiate a settlement with me. However, I did that and it doesn’t reflect well on the credit report. Even though we pay it off, it still shows as a bad debt. I think it is unfair but it does.

I’m pretty new to the blog


Hi everyone, I’m pretty new to the blog, but have benefited a great deal from the discussions thus far. Max, I’d like to thank you for your response to Alex’s question. That’s exactly what I was thinking, even though I have had companies to settle with me for about 50% of the outstanding debt. I think it would vary from creditor to creditor, however, I TOTALLY agree that creditors sometimes resort to stubborn, unreasonable behavior to intimidate people into paying!

Alex, if it ever comes down to a potential judgment or garnishment against you (one of a creditor’s FAVORITE threats), as long as you’ve been paying consistently and are able to prove that, it’s unlikely that a judge will rule against you. Like Chad said, do what you can, be consistent (above everything else), keep accurate records of your payments/history, and don’t let them control the situation.

I think you’re doing the best you can

Debt settlement

I think you’re doing the best you can with what you have. If there’s nothing else to be done then you have to just let them deal with it however they will. I mean that in all seriousness, if you are taking the money you have available and paying them as honestly and fairly as you can then let yourself off the hook about that “they” want. “They” want to be paid in full, “They” want you to feel intimidated every time they call, “They” want to control the situation. However, you just do the best you can and let them deal with it.

Just make sure you keep in contact with them every 2 weeks and don’t stop sending those small payments once you’ve started. Once you get your bonus and settlement then you can look at a lump sum settlement but I wouldn’t tell them that now. Once it’s in the computer every idiot collector who calls you is going to hound you about it. Each creditor is going to want the whole pie and not a settlement so that others can get paid too.

Good luck and don’t let the bastards get ya down! 😉

I am just about to begin sending allotment payments

Debt settlement, Payments

I am just about to begin sending allotment payments. The last time I made a payment was about 5 months ago.

I’ve calculated my total debt, divided the amount owed to the creditor by that to come up with a percentage. Then I’ve taken the total amount I am able to pay towards my debt at this time and multiplied it by that. This is what Dave Ramsey talks about in his book.

The amounts that I am paying are very low in comparison to the actual payment required but it’s something. I’m expecting a bonus and a settlement so I was hoping to use those to pay off some of my debt by offering a settlement to the company.

What do you think about that?

Does anyone know what % a company will settle for?

Debt settlement

For example, my balance on one of my credit cards is $10,000. Does anyone know how much the average company will take?

Do you think the minimum that they would accept is 3/4? 1/2?

I heard it depends on the length of time since the last payment. Somewhere between 1/3 and 1/2 of the balance is normal if it’s less than 5 years old but older than 1 year. If it’s older than 5-7 years you should be able to settle for ~1/4.

You and I are actually saying the very same thing

Debt settlement, Services

I think you and I are actually saying the very same thing 😉 So we can quit complimenting each other on our extraordinary taste and common sense..lol

I personally would NEVER recommend that someone use a debt settlement service. However, if someone feels that’s their only option, they should at least use the lesser of the evils. CCCS has a fiduciary responsibility to actually pay the bills where most debt collection companies don’t. I’m not advocating them, just mentioning the facts.

They still suck, but it’s more like a Hoover vs a Dyson.

Have a great evening.

I fully agree with everything you said


I fully agree with everything you said in your reply. Not worrying about one’s credit and just concentrating on the future is the wisest advice. A credit report and score are nothing more that tools that the banks try to threaten people with.

Yes, I agree with a CCCS being a good option for people, but it is not the best option for some. CCCS have just as bad a reputation as Settlement companies, and sometimes even worse. So although I do agree with your assesment, I am in disagreement that it is a better solution.

Factually, I feel if someone can afford to do CCCS then they really don’t need it all as there are other products and services that could a better job with the negativity of the CCCS.

Again, thank you for the kind words. I feel that you giving out good advice as a whole.

I wish I would have taken the time to read

CCCs, Credit cards

Wow, I wish I would have taken the time to read this email closely when Max first sent it. This is good stuff folks, more than worth the price of admission around here 😉

The only thing I might add (hehe..you knew there had to be a catch) is that resorting to any of the debt settlement companies is an AWFUL solution. Maybe CCCS is the best of the bunch but only because they are funded by the largest credit card companies in the world so they have to actually pay the credit card companies when you pay them. Aside from CCCS you are way better off to deal with the creditors directly and not involve any of the other scam or non-scam companies.

As Jae so eloquently stated below you are ASSuming that the best option for you is also the option that has the least effect on your credit score. That’s an incorrect assumption. Forget the dang score….just pretend it never existed. Just stop doing anything not related to digging yourself out of this debt-filled-hole and concentrate on making wise decisions from today forward. In a few years when you’ve been smart, honest and faithful to paying what you can and dealing with your creditors fairly (after all, we all got ourselves into this mess. It’s their product, but we bought it) you’ll be able to do whatever you want to financially.

Buying a house or a car or a whatever from a position of strength …NOT weakness (debt) is a blessing.

Don’t let the idiot collection-monkey jump up and down in your ear.

Remember this each time you talk to them

  1. You have what they want (money)
  2. YOU get to decide what to do with YOUR money
  3. It’s not personal, they will say whatever it takes to rattle your nerves and make you mad (mad people make poor decisions)
  4. You are in control of the telephone receiver – it hangs up as well as it answers 😉

The first thing you need to do

Bankruptcy, Budgeting, CCCs, Debt settlement

The first thing you need to do is get rid of the idea that you need to have credit and that your credit is ruined. Both are so far from the truth it hurts.

Like many (and myself) I fell for the idea (trap) that you have to have credit to do anything in life. I found out the hard way, like you are doing now that that is a just a bunch of poopoo. Its a PR line created by the banks.

Banks have only two agenda:

  1. Figure out every way possible to put you in debt; and
  2. Figure out every way possible to keep you in debt.

It is just that simple. They have only one legal responsibility and that is to make money for their shareholders. You are definately not a repsonsibility for them.

Now as to our options. You there 4 major options you need to look at. But which one you choose has many varibles. It really is determined one what you are more comfortable with and what you can afford. But biggest requirement, and the one that ALL your decisions are based on is: You need to put a roof over your head and food in your belly for you and your family.

The options are:

1) Consumer Credit Counseling. This option is only workable if you can afford 2.5%-3% for a minimum payment. In other words, if you can’t afford minimum payments now, then this NOT the solution to you – unless you can budget effectively to be able to afford it. More in this video:

2) The “Snowball” or “Roll-up” methods. Same program different name. Basically this is good if you can budget minimum payments plus at $100 or more a month for the bills. If you can’t do that, then this is not your best method.

3) Debt Settlement. If you can’t do Consumer Credit Counseling or the “snowball” method then this is the last option before bankruptcy. There are three different types of settlement. There is a) the front fee based companies, b) the performance fee based companies, and c) doing it yourself. Try the performance fee first, but if you can’t afford that program then try the more extreme version which are the front-fee based companies, and if neither of them are good for you then doing it yourself may be the best option.

4) The last option is bankruptcy.

Don’t fool yourself. Every option has its pros and its cons. 3 out of 4 will harm your credit in some way.

Research the companies thoroughly and choose your best option.

I hope that this helps.

If the debt’s not worth a live person


If the debt’s not worth a live person making a phone call, I don’t think you have much to worry about.

Think about how little they are concerned at this point to let a machine call you and then expect you to call back.

I wish there was a way to send those calls into a loop where all those machines called each other 😉

We’ve received these and we’ve ignored them

Collection agency, Phone calls

However, one of the creditors that called last night was one that said, “please hold for an important message”. I figured it was a creditor so I held to see who it was and what they would say.

“John” gets on the line and he asked me basically what did I want. I said you called me. He again asked me and I again said that you called me. That confused him. It was kind of funny.

Thanks to everyone again for the responses I’ve received. I think that there are times when I have to step back and remember what I am doing and what I am trying to accomplish for us and definitely not let the calls get to me.

“Someone” just called……..

Phone calls

What about these calls we get that are automated?

A very stern voice says (to WHOEVER answers the phone) something like “This is John Somebody. I have been asked to contact you about an urgent matter. I must make an important decision concerning you. You must return my call immediately. 333-444-5555.”

That’s it..nothing else…

They don’t say who they are from nor is their any reference to anything, just this cryptic message.

What you ran into with the CCC

CCCs, Collection agency

What you ran into with the CCC is a common experience and one of the chief complaints that are levied against this industry. But as you say that is water under the bridge.

What you need to realize is the collection agency is trying to find out what your hot button is so that they then can exploit it.

When a collection agency claims that they are taking legal action against you it does not mean what your mind is telling you. It just means that they are going to be following what the law tells they can do, which is usually just more phone calls, writing letters, etc. It does not mean they are going to sue you.

If they were you would get a professional letter in the mail from an attorney. Law suits are NEVER done over the phone. SO the threat is just that a threat. They only wanted to create the effect that they did, which is to put the fear of God into you so that you pay up.

SO the first thing that you need to do (with your husband) is to take a deep breath and research and study before acting. You have pleanty of time…they don’t.

They want something that you have…YOUR MONEY.

I hope that this helps in some way.

Chase credit card acct sold to a collection agency? Now what?

Collection agency, Credit cards

I did post my situation to another blog about a month ago..when I first joined, but for some reason there was extremely little activity on this group and I only got one reply. Since the group has been so busy lately, I thought I’d ask again, plus I have new info.

I have come to learn this was a bad choice on my part… but at the time I was convinced it was the best solution. I was current on all of my accounts 04/29/12 when I signed up with Preferred Financial Solutions aka Enrolled Customer Trust (aka Enrolled Members Trust). Although some cards had high interest, I thought I would benefit from debt consolidation assistance but somehow got tied up with Preferred Financial as they advertised that I “as the client would honorably remove my existing debt from my shoulders through payment of the negotiated amount to the creditor,” instead of having to deal with collection agencies. Perhaps I should have tried to negotiate a hardship case with each company separately. Water over the dam…

At this point I don’t know how to handle this last debt. Here’s the story:

I have paid $14,145 via ECT, the original debts totaled $17,709 when I signed up with this company, 3.5 years ago.

Over the past 3 years I have paid all the debts via Enrolled Customer Trust except this last one, which was the Chase account. On and off I have had very stern and often nasty people call from at least 2 collection agencies (one called “The Bureaus”, and one called “Zwicker and Assoc.”) perhaps a 3rd but didn’t get the name.

So recently they have stepped up the calls and demands and they refused to deal with ECT. I explained I had almost $2,000 paid in to ECT and could afford $290 per month, which is the amount I was paying to ECT, but the rep wanted none of that. He was threatening to take the ‘next step’ whatever that might be, I don’t know. The original debt with Chase was $4350 as of May 2002, now it is double that amount. At one point about a month ago, I panicked from the pressure, and called ECT and they finally admitted that Chase was very difficult to deal with and that that was why they were the last ones to be paid!

(Isn’t that stupid? Shouldn’t they have tried to settle Chase first, then?) I said that maybe ECT should refund my account balance back to me, and they agreed right away! I said ok, then worried that I was making a mistake. I called them and told them to do nothing until I spoke with my husband, and we would call them back, but within about a week, ECT refunded my $1933! We haven’t cashed that check yet… My husband looked over the contract and despite the fact that I was supposed to pay in $290 per month (including their $39.95 monthly fee) for 36 months…he said there was no guarantee in the paperwork that it would be over at that point and that the debts would all be settled.

Currently, Zwicker insists I owe them about $8700 (or something close to this..) – double the original debt. $1933 is presently saved in the settlement account, Well..now it’s an uncashed check in my possession)

This original debt was just*MY* credit card debt from when I started my small business, and then the economy crash after 9-1-1…. My husband’s name was not on these cards, so thus far, he was not involved in this.

The latest has been these calls from Zwicker & Ass. 😉 – my husband called the number once after getting the automated recording and they discussed everything with him. After discussing it with me, he offered to help me settle this, and twice he offered the Zwicker guy the original debt of $4350…

One rep, (he’s actually quite pleasant, at least when he speaks to Jerry) said he would make the offer to his company, and contact us. That was nearly 10 days ago and we’ve heard nothing from him, and the automated calls are starting again, and they are from this same guy.

Do we just wait now? What can we expect?