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If youre dealing with debt and not sure what to do, were here to help. Become a Resolve member and well contact your creditors to get you the best offers for your financial situation. Our debt experts will answer your questions and guide you along the way. And our platform offers powerful budgeting tools, credit score insights and more. Join today.
How Does Credit Card Debt Settlement Affect Your Credit Score
If you work with a debt settlement company, the company might advise you to stop making payments on your debt during the negotiation process. This may cause your debt to fall into delinquency, which your creditors will then report to the credit bureaus. Delinquencies stay on your credit report for seven years, meaning you could feel negative impacts even after you settle the debt.
Debt settlement may also affect your credit score if it affects your credit utilization. If you stop making payments on your debt, your balance may climb due to additional charges and late fees. Using too much of your available credit and not paying off debt will cause your score to drop while youre in the process of settling that debt.
Make Your Minimum Payment If Possible
This may be difficult guidance if youve lost your income and youre having to prioritize your bills. There may be cases, though, where you get financial assistance from your credit card companies, but your interest continues to accrue. If this is the case, making the minimum paymentand making it on timecould help ease the burden later on.
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Now Youre Ready To Call Your Credit Card Companies To Negotiate
Now youre armed with all the information you need to make an effective case. Have all this information written out and on hand when you start contacting your credit card companies. Then take these steps:
If a credit card company is still unwilling to budge,; then it may be time to consider some alternative relief options.
Myth No : Debt Settlement And Bankruptcy Are My Only Options When I Cant Pay
The truth:;You always have options.
For example, if you lose your job, call your credit card company. It may allow;forbearance. In other words, it may allow you to make smaller payments or no payments at all for a limited-time .
If its time to get your finances under control, a nonprofit credit counseling organization can help you look at the big picture and see all your options, from downsizing to increasing your income, or managing your budget.
Each persons debt situation is unique and theres not a one-size-fits-all approach, Gordon says.
For example, if a consumer has only one credit card and just needs a reduction in interest rate and a lower payment to take a little pressure off, credit counseling might be the way to go.
If a consumer lost a job and has zero income, debt settlement might not be doable because the consumer has to be able to afford the settlement payment, he says.
And, In some cases, bankruptcy might be a good option, he says.
However, for some consumers, debt settlement may be the best choice. Consumers can save as much as $3 for every dollar they pay in fees, Gordon says. That is significant.
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Know Your Budget: Track Your Income And Bills
Next, collect recent pay-stubs to understand your typical monthly income .
Now, on the debt side, add to your list of credit card balances a collection of your recent monthly and annual bills. That’ll likely include things like:
- Rent, mortgage and other housing costs
- Utilities, like water, gas, heating and electricity, broken down by average monthly balances.
- Loans and insurance: Car loan and insurance, student debt payments and other personal loan or insurance costs
- Subscription service payment
- Grocery and commuting bills
- Education and child-care costs
- And anything else that’s a regular monthly payment, like gym memberships and public transport costs.
You can also load this information into an online budgeting tool, such as Chase’s Budget Builder, to keep on hand for future reference. There are also plenty of budget apps online that are free and easy to use.
Once you have all of this, you’ll have a clearer understanding of your total expenses and income, and how much credit card debt adds to monthly costs.
Handling Debt Negotiation On Your Own
When it comes to credit card debt negotiation, the CFPB says that the first thing you need to think about is why you are in debt. Is it a temporary job loss or long-term issue? Understanding how long you might be in this situation can be helpful when you call your creditors to negotiate.
During the height of the pandemic last year, many credit card companies offered deferment. Deferment allows you to temporarily stop making payments for a set period. Some creditors even allowed customers to extend deferment between 3-6 months.
Now, however, creditors are becoming less flexible with customers. But it still may be possible to negotiate for an extra deferment period or to extend your current deferment agreement.
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Ask Questions About The Credit Card Relief Packages They Offer
While your credit card company may offer up one or more options, have a list of questions prepared in advance. You want to make sure youre completely comfortable with the terms before you agree to these options.
Here are key questions to ask:
Note: that the recently passed Coronavirus Aid, Relief, and Economic Security Act places special requirements on companies that report your payment information to credit reporting agencies if they provide payment relief due to the coronavirus pandemic.
- Will I lose the ability to charge anything to my card if I enroll or request relief?
Removing Chase Collections From Your Credit Report
Chase collections can hurt your credit score and remain on your credit report for up to 7 years regardless of whether you pay it or not. Unfortunately, paying the collection could even lower your credit score.
However, it is possible to have it removed before 7 years, and you may not even have to pay it.
Phone number: 270-6000
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Settling Credit Card Debt With Chase Or A Debt Collector
You mention you were thinking of settling your Chase credit card. What was your plan for doing so? What is the balance of the account now? How much money have you saved and what amount can you add over the next few months? Do you have additional credit card accounts that you are late with?
How much money you need to be prepared with will change depending on different factors.
If you took the money you would have paid in the lower monthly payment hardship plan and saved it up for 6, 12, or 18 months, how much would you have?
This is how many people settle their credit cards. By saving up money over a period of months. If you miss the opportunity to settle with Chase directly, after 6 months of non payment you typically will be able to settle the account with a collection agency.
In order to maximize your percentage savings in settlement and mitigate the risk Chase places the account for aggressive collection action, there are some things you need to be doing and things to avoid doing. If raising the money to settle with Chase in the first 6 months is not an option, there are different details to learn in order to be successful with your Chase credit card settlement.
I would encourage you to start reviewing my debt settlement series to get a sense of what settling credit card debt with Chase is going to look like for you.
If you would like to consult with me directly, you can call me at 800-939-8357 and press option 2, or you can submit a consult request.
How To Negotiate With Debt Collectors
In some cases, a creditor may have turned your debt over to a debt collector. Debt collectors make money by collecting past-due debts that originated with a creditor, such as a credit card company.
When dealing with debt collectors, be patient. It may take several attempts to get the type of settlement youre comfortable with. Resist pressure to agree to a settlement thats not in your best interest. Also, ask about whether the debt collector is willing to settle the debt through a payment plan rather than all at once, with one lump-sum payment.
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Beware Scam Settlement Offers
It’s important to be on the watch for fake settlement letters, sometimes even for;fake debts. Before you pay any money on an unsolicited settlement offer, make sure youre dealing with a legitimate company and that the;debt is yours. Then, you can proceed with payment if thats the action you want to take.
Spotting a fake settlement offer can be tough. Some signs the letter is not legit include misspelled words, improper grammar, vague references to “our client” or what happens after you settle, the absence of information about discharged debt being reported to the IRS, or directions to pay via wire transfer or another untraceable payment method. Fake settlement offers are more likely to come from collection agencies than from the original creditor.
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How To Negotiate Credit Card Debt Settlement By Yourself
- Kate Rockwood
If you find yourself crippled by credit card debt, having racked up charges that will be hard to pay off, you might be able to settle your accounts with your lenders for less than what you owe. And you might not need a debt settlement company to do it. Heres how to negotiate credit card debt by yourself.
Settling debt means coming to an agreement with your creditors to pay back part of what you owe while being forgiven for the rest. If youre considering settling your credit card debt, youve probably already missed some payments, perhaps even several months worth. You may have already been referred to a collection agency. All of this puts a big dent in your credit score. ;
How Credit Card Companies Can Contact You
Handling credit card debt after a loved ones death can be confusing and emotionally difficult, especially when collectors start calling. Credit card companies may contact a deceased persons family regarding any debt left behind, but they must follow rules established by the federal Fair Debt Collection Practices Act, or FDCPA.
A debt collector can contact a deceased persons spouse, parents , guardian, executor or administrator to discuss the debt. But the debt collector cant mislead people by saying theyre responsible for paying the debt if theyre not, and the collector cant use abusive, unfair or deceptive practices to try to collect a debt.
You can also ask the collector to stop contacting you, regardless of whether youre legally responsible for the debt or not. If youre responsible for the debt though, the collector may contact you once more to explain that the creditor plans to take a specific action, like filing a lawsuit to collect the debt or confirm there will be no further contact.
If a collector does reach out about a deceased persons debts, you can specify how youd like to be contacted in the future. And know that its legally required to provide certain information to you. Dont give out any personal information until youve verified that the debt collector is legitimate. And if you can, talk with an attorney before making any payments to avoid any potential problems. You can also opt to have the debt collector contact you through your lawyer.
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Chase Bank Credit Card Lawsuits
JPMorgan Chase is one of the biggest and best well-known banks in the world. In the US there seems to be a Chase bank on every corner. Over the last decade, Chase was a bank that did not sue consumers in regard to credit card and loan defaults. They did send defaulted matters into collection but when it came down to filing lawsuits they almost always decided to sell their debt to third party debt buyers. Those debt buyers often found it difficult to properly prove that they were the rightful owners of the debt in court and also settled matters for far less than what an original creditor might settle for.
Surprisingly, we are now seeing Chase lawsuits against consumers for the first time in about a decade. In New York, Chase has been retaining Mullooly, Jeffrey, Rooney, and Flynn, a common debt collection law firm. Like all creditors, Chase sues in order to obtain judgments against consumers often on default due to improper service. These judgments then allow MJRF to levy consumer bank accounts and garnish wages. It is always critical to submit an answer with defenses to any lawsuit received from Chase. This also provides leverage in a potential negotiated settlement with Chase whom have always been willing to come to fair deals with consumers.
How People Are Getting Help From Chase Debt Settlement Programs
- A customer recently had Chase offer them a 35% reduction or settlement of their debt on a total of $19,000 in unpaid bills that they had outstanding. So they in effect offered to settle for $6,900.;
- Sometimes they will offer payment plans along with the settlement offer. Someone was offered a payment plan that spaced out their repayment terms over 4 payments. They settled at 35% of the card holders debt and each payment was about 9% of the total settlement amount.;
- Another customer also settled at 35%. That was the principal balance, and not including all the fees and charges that were added to it when they stopped paying. So if you factored in the fees, the deal was even better as the fees were waived.;
- Chase offered a struggling cardholder a deal at 60%. This person did not accept, and continued to try to negotiate with them. They called customer service, asked for supervisors, inquired about hardship programs, and even wrote a letter. Eventually the terms of the offer improved to about 45%, and the offer was accepted. So this shows that going the extra distance may sometimes pay off.;
- Someone had over 17K in unpaid credit card bills and debt. Chase at first offered to lower the interest rate and give them a lower minimum payment, but that was not enough to help. The customer then stopped paying, and after about 90 days and calls and letters from Chase, the bank did call back and offered a 30% settlement deal. They took the deal.
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Negotiating Credit Card Debt
If youre drowning financially and need help with credit card bills, you may wonder if its possible to negotiate your credit card debt. Options may include a partial settlement, a workout agreement, or even payment reduction for a few months.
There are key steps to negotiating credit card debt, but theyre not simple. Youll have to find a plan that works for you when trying to negotiate credit card debt. Options include a workout arrangement, forbearance, debt management plan and debt settlement.
Debt settlement program
With a debt settlement program, you negotiate a settlement for less than the full amount owed. The credit card debt negotiation depends on whether or not the individual creditor will work with you. And you need to understand that paying less than you owe impacts your credit score and some forgiven debt is viewed as income and may have tax consequences.
Debt management program
With a debt management program, a certified counselor negotiates credit card debt arrangements for you. Youll pay back your principal in-full, but your interest rates are reduced or even eliminated. Late fees and penalties may be waived. Youll only have one payment to make each month instead of several. Your credit score stays intact and may even improve while on the program. The key to a successful debt management program is that more money goes to eliminating the principal, while high interest rate charges end.