Spoke to one of my cc today

Union Plus called and the rep I spoke with told me some interesting things.

He was trying to get me to sign up for a “hardship” program. It required me to make a larger payment and then the interest rate would be reduced for 6 months and I would have to disclose my income and all my debts and things like that. I would have to be “approved” for it. I decided against it as I did not feel comfortable with all that was required.

I started to talking to him about settlement options. He let me know that if I try to settle between 0 and 90 days past due they would probably offer to settle at 65% of the debt. When it becomes more than 120 days past due I could probably settle for about 45%. He also let me know that it wasn’t going to help me if I sent in the small pro rata payments if I planned on settling the debt anyway. I was only sending them about $25 a month. He suggested that I save it for my settlement payment.

He did say that they would even do a payment plan for the debt settlement amount. I clarified that it would all be in writing and he said yes, the agreement would all be in writing.

So, I will have some extra $$ in February and plan to call and offer a settlement at that time. My question is, what percentage should I start my negotiations at and what is the max that you think I should go? I was thinking to offer 25% of the debt and not go more than 30 or 35%. I believe that my extra $$ will be around 40% of the debt but I want to stretch the amount as far as possible and start saving for another settlement offer.

Your thoughts as always are appreciated.

45% is a great settlement especially with a credit union. I don’t think that you’ll get much better than that. You could try, and if you do start off with 30% and go up from there. Be careful as you could shoot yourself in the foot.

If I were you and they offered me 45% I would jump at it immediately.

Credit unions, as a whole, can be more difficult than banks to settle with. The reason s that the credit union is a collection of investors, like yourself. The profit goes to all that bank with the credit unions, so if you do a settlement for less, then you are taking away from your fellow members.

It was very smart on yourself to make sure that it will be in writing. Make sur that before you pay a dime you have it in writing. This would also be a good time to negotiate that they remove all bad marks from your credit report, and that they report the settlement as “paid in full” instead of “paid as agreed” or what other statements they use to indicate settlement. You may or may not get these concessions, but it never hurts to ask…if you get it, bonus.

Of course, this advice only pertains to the credit union. If it were a regular credit card I would say go for as much as you can.

Best to you. Happy holidays.

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