Debt Relief

[smarcus3]

I have about 35,000 in credit card debt with Chase, Citi, Statefarm, and Capital One. I have successfully negotiated Chase for a 4 payment 35% of my balance. I am not having much success with the others, does anybody have any experience with dealing with these other creditors?

[debtexecutioner]

Smarcus

You can negotiate credit card debt, but you'll have to use some leverage with Citibank and CapOne. Using our banking experience and legal knowledge, we've helped over 3,000 clients successfully negotiate debt over the past 7 years.
Here's what you need to know:

1. Citibank notoriously will only settle for 50%, unless you're using the "hardship" card. If you've been a good paying customer and rarely or never late, they don't have a compelling reason to negotiate.

Had a customer try to negotiate her $50k in debt for two weeks without making headway. She had to default on (1) month's payment in order to let them know she meant business (also self-employed). She could barely make the $900/month payment. After another week of negotiations, they cut the balance in half, lowered her monthly payment to $400 and froze interest and finance charges. Basically an interest free loan.

2. Capital One is also a tough customer. You'll need leverage to negotiate a deal with them as well. The key is building rapport with a customer service rep - and you may have to make multiple calls at different times a day.
This is something I discuss in my Ebook on the subject, listed at PayDotCom (Eliminate Debt in Record Time). You'll also need a game plan before you pick up the phone - know what you have to negotiate with and look hard at your budget.


3. State Farm. Personally, I didn't know they issued credit cards.
They may have a national association issuing cards for them: i.e. Citibank issues Sears; Discover issues Walmart credit cards, etc. One way to find out is check the back of your statement or your credit card agreement.

Again, see #2. Use leverage, call at different times, find someone who will negotiate with you.

Banks typically settle for between 50 - 70% of the debt, but I've seen some customers settle for as little as 10% or 6% of the debt.

Wishing you a debt free year in 2010!

Sara Goodman
DebtExecutioner

[smarcus3]

Thank you so much for your input. I will try your suggestions.

[larajackson]

Thanks DebtExecutioner...You have covered all the points...To become debt-free, it will helpful.