I Am Overwhelmed With Credit Card Debt Especially My Wells Fargo Accounts Is There A Wells Fargo Debt Consolidation Program That Can Help Me
I am overwhelmed by my debt, especially my credit card debt. My two biggest credit card debts are both with Wells Fargo. I have one WF card with over $8,000 and another with over $5,000. My total credit debt is about$ 30,000. I’ve cut all my expenses and used up all my savings. I no longer can afford to make my minimum payments each month. Late payments have lead to creditors hiking rates on some of cards to about 30%. I feel like I will never catch up. Is there a Wells Fargo debt consolidation program that would help me get out of debt? Please help. Thank you.
Thank you for your question about your Wells Fargo and the best solution for your debt problems. Let’s review your options for your solving your debt problems in general, the specific Wells Fargo debt consolidation options available, and some important information on how Wells Fargo deals with accounts that go delinquent.
Wells Fargo is a full service bank. They offer basic banking services such as checking and savings accounts. Wells Fargo has a mortgage department, and the bank offers personal loans and unsecured lines of credit. It also offers a number of different credit cards.
Available Assistance For Credit Card Debts
Credit card issuers, like Bank of America, Capital One, Chase, Citi, U.S. Bank, and Wells Fargo, have released statements on their websites announcing that they’ll offer different kinds of help during the COVID-19 outbreak, like giving credit line increases and providing increased fraud security. But be careful about increasing your credit line. While having more credit available might help your if you don’t use it , if you charge more on your card after getting the increase, it could be very difficult to dig yourself out of that debt.
If Possible, Don’t Use Your Credit Card as a Loan and Don’t Get Cash Advances
If you carry a balance, a . If you make only the minimum payment each month, you’ll be paying off the debt for years and years to come, including a considerable amount of interest.
Also, using a credit card to get cash advances can be very expensive.
- Additional transaction fees. Most banks charge a fee of up to 5% or so for taking a cash advance.
- No grace period. Banks often charge interest from the date the cash advance is posted, even if you pay it back in full when your bill comes.
- High interest rates. Usually credit card companies charge very high annual percentage rates for cash advances. APRs of around 25% are not uncommon.
If you’re having financial troubles, you’ll be better off if you find an alternative, like looking into debt relief or taking out an advance or emergency loan from an employer, nonprofit organization, or community group.
Discover Card Settlement Policies Are Unique
Some readers could legitimately make a case for Discover being at or near the bottom of this list. But if you are looking for debt relief versatility and flexibility among major credit card issuers, Discover Cards delivers. Just in some unusual ways.
Settlement savings and predictability: Discover trends today are settling credit cards for between 30% and 50%. Discover tends to not offer the 94 days to pay on settlements, preferring to get a single payment when settling before they charge off the account and place it for collections. But Discover is one of few creditors to offer a 60/60 plan to some of their card holders. This is where they offer to reduce the debt to 60% of the balance and spread the payments on that amount over 60 months. Discover is not selling to debt buyers right now. And they are one of the more aggressive creditors to place accounts with attorneys for collection after charge off.
The last several people I have spoken with that have asked Discover about the 60/60 plan have been told it is no longer an option.
Flexibility: Discover provides a different type of flexibility like mentioned above. Where Discover may not offer the 3 month payment terms the 60/60 plan as well as some of the strategic ways I have helped people navigate a Discover settlement when juggling other accounts combined with a good reduction on their balances places them above the remaining banks for this category.
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How Much Will It Hurt My Credit Score
If you have a lot of accounts, or the personal line of credit makes up a marginal percentage of total credit available, or if the line of credit hasnt been open/active for very long, you may not see a noticeable effect on your credit score.
But if youre on the opposite end of the spectrum, lets say:
- The Wells Fargo personal credit line makes up a majority of your total available credit, and
- Youve been a customer for multiple years, and
- Have made all your payments on time
Youre going to see a much harder hit to your credit score.
Settling Your Chase Credit Cards
This may surprise many readers due to how much Chase gets hammered in the press and media for a host of issues recently. The state of California has sued Chase for past collection practices. There was the 2015 announcement regarding penalties against Chase at a federal level for some of the same practices the California Attorney General sued for.
Chase stopped directly suing their card members as a method for credit card collections in 2011, and stopped selling their unpaid credit cards into the debt buying market in 2013. Most of those challenges happened around Chase policies and procedures for accounts that charge off.
How much you save and predictability: Chase has been settling pre-charge-off credit cards with their card members for between 20% and 40% for years. While there are instances where settlements are higher, they are for predictable reasons.
Flexibility: Chase offers settlement with 94 days to pay before charge off. Payment flexibility when settling Chase debts after charge off can go longer than 3 months .
After Charge off: The approach for settling Chase accounts, when you have more than one credit card bank to settle debt with, will often be letting it go longer than 6 or 7 months past due. Settlements with outside collections agencies, when done correctly, are often better, and by a good margin. In other words, it literally pays to wait.
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Be Aware Of Possible Disadvantages
Negotiating a credit card debt settlement can have some downsides that you should be aware of before making a decision to do it.
Depending on how it plays out, negotiating a credit card debt settlement can significantly lower your .
Even before you enter into an agreement, companies may close your account or prevent you from using the credit line any further. The process can also temporarily lower your access to capital from other borrowing sources as you are now seen as a bigger risk.
Other lenders may charge you higher interest rates to compensate for your heightened default probability. In some states, your insurance costs for things like automobile insurance might rise. The length and severity of these outcomes will be far worse with a bankruptcy filing, so it can still be worth it to go through with the settlement.
It’s also important to note that forgiven credit card debt can be treated as taxable income. If the total debt forgiven is $600 or more, the lender is going to give you a Form 1099-C, Cancellation of Debt to use in your personal tax filing. Do not try to avoid claiming this as the IRS is going to be notified of it by the lender.
Keep The Lines Of Communication Open
Once you have your data together, schedule time to call your credit card provider when you will not be in a rush.
If your financial circumstances have changed, inform your credit card company that youre having trouble making your minimum payment and explain why. Be factual. Explain your hardship, but realize the call representative may have fielded a lot of calls. Dont take offense if they dont initially understand or sound empathetic.
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The Basics Of Debt Settlement
Debt settlement involves negotiating with creditors to significantly reduce the amount of money you owe. Unlike the less dramatic forms of achieving debt relief, like debt consolidation or a debt management plan, with debt settlement, you repay only a portion of the principal you owe.
Lets say, for instance, that youre overdue on $5,000 you owe to one credit card issuer and $5,000 you owe to another credit card issuer. In order to get at least some of their money, the card issuers then decide to accept a lump-sum payment representing 50% of what you owe. So, instead of possibly not getting a penny from you, each creditor receives a lump-sum payment of $2,500.
Schedule Your Free Debt Analysis
Potential clients speak with a certified debt specialist regarding their financial situation.
The debt specialist evaluates the callers financial situation and suggests the optimal debt relief strategy.
Clients choosing to enroll in our debt relief program are then guided through the enrollment process.
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How Does Debt Settlement Work
In general, a creditor wont consider a settlement offer if youre current on your bill. But if youre behind on payments, the situation may change. Rather than risking the loss of its full investment , a creditor may try to recuperate as much money as possible with a partial settlement.
Debt settlement negotiations typically begin in one of three ways.
Regardless of which party initiates the offer, there are two ways to manage the process from your end. Theres a do-it-yourself version of debt settlement where you negotiate with the creditor or collection agency on your own. You can also hire a professional debt settlement company to negotiate on your behalf.
Removing Wells Fargo Collections From Your Credit Report
Wells Fargo 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: 869-3557
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How Does Credit Card Settlement Work
The benefits of credit card settlement are clear: You may be able to get out of debt more quickly without the responsibility of the full debt load. However, your credit score will likely drop as a result of debt settlement, and you may have tax consequences down the line. If you settle a $15,000 debt for $10,000, for instance, you may be taxed on that $5,000 difference.
Your Contract With Us
Agreement. This contract for your credit card account includes the Credit Card Agreement , the Important Terms of Your Credit Card Account and future amendments to this Agreement. This Agreement is a contract between Wells Fargo Bank, N.A. and each Account holder. You and any joint Account holder accept the terms of this Agreement by using or confirming your Account. Please read this Agreement carefully and keep it for your records.
Annual Percentage Rate
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Why Do You Get So Many Collection Calls
Unsecured credit cards are unsecured. Missing credit card payments is not like skipping payments on cars and homes, which can lead to repossession and foreclosure.
In the early stages of credit card collection, there arent many teeth behind the debt collector bark. Repeated collection calls and letters from your bank are about the only tool available to the collector , in order to get you to make a payment. Until a bank or collector gets a payment, or a plan for payments, the barking continues.
Phone calls are your friend. Certainly not all of the ones leading up to negotiating the deal, but you can literally make thousands of dollars in one, or several well planned and timed calls to your bank. But lets get prepared with what to say, and not say, before you pick up the phone.
Continue following along in the debt settlement guide with How to Talk to Bill Collectors.
Anyone with questions or concerns about timing your settlements with your banks, and your particular situation, can post in the comments for dedicated feedback.
This Debt Settlement Guide includes:
How Can A Lawyer Help
Our attorneys fight to get the best deal available for each and every client. We understand how to use our client’s hardship as leverage to negotiate debt reductions. We can also provide advice and defense in the event the debt goes into legal status. In the event settlement is not an option, we may advise our client on the possibility of discharging the debt in bankruptcy.
to learn how our lawyers can help you resolve your credit card debt with Wells Fargo Bank.
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Most Banks Offer The Best Deal Based On Timing
Take a break from reading and watch this video, where I quickly hit on all the reasons why timing your settlements is important to you and to your bank.
Your credit card debt may be a source of enormous stress for you, but it is an accepted and planned-for statistic for your bank. Just like I am focused on helping you figure out the math that works for you, banks will focus on math that works for them.
Throughout the debt settlement guide, I make references to collection stages. Here is what I mean when I refer to the different stages of collection:
- 1st stage debt collection is when you are dealing with your original creditor. This is generally within the first 6 to 7 months of having not paid your credit card bill.
- 2nd stage debt collection is when you are dealing with a contingency, or an assignee debt collection agency, collecting on behalf of the bank. This means the creditor still holds the debt. Your account was not sold.
- 3rd stage debt collection is when you are dealing with a debt buyer. A debt buyer is a company who has purchased the legal right to your debt.
- 4th stage debt collection, aka late stage collection, means your account has been placed with an attorney licensed to practice law in your state, or when collections have reached the courts.
Ive Started Missing Payments What Happens Next
When you stop paying your Wells Fargo credit card or other debt, you will begin to rack up late fees and interest. You might see your debt ceiling lowered or your account closed as a result. Wells, or an outside third-party collection agency, will start contacting you about your balance.
If you still dont pay, the bank has a few options of what to do next. Sometimes Wells Fargo will sell its account to a debt buyer. The buyer has probably purchased the account for very little, which gives it an incentive to try to collect as much as possible from you through litigation. Or Wells Fargo may decide to keep the account and assign it to one of its lawyers.
Either way, a lawsuit will make the debt much worse. Not only will you owe the original balance, plus late fees and interest, but a lawsuit will tack on attorneys fees and court costs. If Wells Fargo obtains a judgment against you, that allows the bank to take even more aggressive actions to collect what you owe.
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Can A Wells Fargo Debt Settlement Attorney Help Me
Considering all that Wells Fargo can do against you, what can you do to protect yourself? Thats where an experienced debt settlement attorney comes in. A debt settlement attorney allows you to negotiate a payoff amount that is significantly less than what you owe. The right debt settlement attorney can evaluate your case for leverage and since it can save Wells Fargo from costly and time-consuming lawsuits while allowing them to at least get some of what you owe.
Contact The Fullman Firm Today
If your Wells Fargo debt is more than you can handle, let us help. We understand how to devise a debt settlement strategy that will save you time, stress, and money. Put our experience to the test. to get started today.
When The Federal Cares Act Prohibits Adverse Credit Reporting
Under the federal CARES Act, if you make an agreement with a creditor to defer one or more payments, make a partial payment, forbear any delinquent amounts, modify a loan or contract, or get any other assistance or relief because you were affected by COVID-19, the creditor has to report the account as current to the credit reporting agencies if you weren’t already delinquent. But you have to come to an agreement with the creditor first to avoid adverse reporting, and you have to stick to the terms of the agreement. Don’t unilaterally stop making your payments, delay your payments, or pay less than you’re supposed to.
If you were already delinquent at the time of the agreement, the creditor can keep reporting the delinquent status unless you bring the account current.In the case of a charge off, the creditor may continue to report it as a charge off.
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