Debt Settlements

[-Zer0-]

I wanted to get as much information as possible before going through with the idea of settling debt, and was wondering if anyone had any experience or in-depth knowledge on what I'd be getting myself into.

Basically, I have a loan debt of a little under $5k that I can clear out entirely if I wanted to now, but some families and friends kept urging to try and settle for less to save a bit if I can. All in all, it sounds good on paper, but after looking through a few resources, apparently it could affect your credit rating. I've got a score a little under 800 atm, and wouldn't want any disputes or other repercussions if I can avoid it.

Anyone have any advice or ideas? I've done one settlement before, taking out a $9k debt with $4500 up-front, but the company I did studies under was hard pressed for cash since they didn't have venture capital funding, etc. so it was kind of under the table without much legal hassle.

[tyven]

is the debt delinquent? doesnt it need to be for a settlement?

[Kalmado]

If you aren't late on the debt or it's not turned over to collections I don't understand why you would want to go through settling, which usually means debt consolidation and yes it does effect your score. What exactly is the problem?

[-Zer0-]

Yeah, the debt is delinquent. It was from several years back. Some family members were taking care of it, and they assured me it was under control, but it's not. So I stepped in to take care of it personally. It's not exactly a huge problem. I'm just exploring all my options.

[Kalmado]

Maybe consult a credit councilor at your local bank? When I had to quit paying on some credit cards because I couldn't afford it I went to mine (5th 3rd Bank) and have a good talk with a councilor to explore my options and get some advice on what to do. There wasn't a charge for it either.

edit: With a score of 800+ I wouldn't want to ding it either, but if you're talking about saving a lot of money it may be worth it.

[nayaminfenrir]

Yeah, the debt is delinquent. It was from several years back. Some family members were taking care of it, and they assured me it was under control, but it's not. So I stepped in to take care of it personally. It's not exactly a huge problem. I'm just exploring all my options.

So you're saying you have an 800 FICO with delinquent accounts on your credit report?

[-Zer0-]

Maybe consult a credit councilor at your local bank? When I had to quit paying on some credit cards because I couldn't afford it I went to mine (5th 3rd Bank) and have a good talk with a councilor to explore my options and get some advice on what to do. There wasn't a charge for it either.

edit: With a score of 800+ I wouldn't want to ding it either, but if you're talking about saving a lot of money it may be worth it.

Yeah, I was gonna go talk to a few people on Monday to see what they think. I'm a reasonable guy, so I wouldn't want to take off too much from the total...maybe ballpark numbers of $500-$1000 if anything at all.

So you're saying you have an 800 FICO with delinquent accounts on your credit report?

Yeah, I got my score recently and was pleasantly surprised by it.

[Pharaun]

Yeah, I'd be shocked if you had a 700 credit score with a delinquent line on your credit report, but sometimes crazy things happen. At this point trying to settle seems like a good option, it shouldn't hurt your credit score any more than it already has been. The worst thing they can say is no and you have to pay the full amount.

[archibaldcrane]

I really find that hard to believe.

[Kalmado]

If it's one 30 day late I could see perhaps Experian being 800 ish if everything else has been perfect for a long period of time. If the delinquent bill is 90+ days late, unless it's a hospital bill, it's dropping your score like a bad habit.

Get the professional advice and make an educated choice then

[Ksandra]

If it's one 30 day late I could see perhaps Experian being 800 ish if everything else has been perfect for a long period of time. If the delinquent bill is 90+ days late, unless it's a hospital bill, it's dropping your score like a bad habit.

Ya I was gonna say, if he's talking about experian it's possible, as that shit is insanely lenient.


As others said, get advice from a banker, but tbh if you say you can pay it, that's probably going to be the best. If you are close to 800 I wouldn't fuck with that shit.

In the long run, having that high of score could end up saving you money anyway (or balance out) if you ever buy a house, car, etc. simply because that score will lower your interest rate.

[-Zer0-]

Yeah, that's what I've been thinking, Ksandra. And yeah, it's Experian.

I've always been rock solid on my own debt, paying twice the amount where I can. I've always been on time for bills, except for one or two phone bills over the years where I've forgotten about them by a day. This loan in particular was a school loan, co-signed several years ago. I've always given my family money to pay for their side of loan since it was my education, but I've never gotten transparency until recently.

So now, I'm just taking on the whole ordeal myself. It was only recently that I found out about the situation and spearheaded everything. I'll head in to talk to some counselors on Monday to get their input. Thank ye kindly, gang~

[*Shinzon*]

I wanted to get as much information as possible before going through with the idea of settling debt, and was wondering if anyone had any experience or in-depth knowledge on what I'd be getting myself into.

Basically, I have a loan debt of a little under $5k that I can clear out entirely if I wanted to now, but some families and friends kept urging to try and settle for less to save a bit if I can. All in all, it sounds good on paper, but after looking through a few resources, apparently it could affect your credit rating. I've got a score a little under 800 atm, and wouldn't want any disputes or other repercussions if I can avoid it.

Anyone have any advice or ideas? I've done one settlement before, taking out a $9k debt with $4500 up-front, but the company I did studies under was hard pressed for cash since they didn't have venture capital funding, etc. so it was kind of under the table without much legal hassle.

The short answer should be yes.

Where do you live? In New York there are programs such as CLARO, which I participated in at my law school, where you can go to get legal advice and help with negotiating a settlement for free. As long as the debt is with the original lender you should be fine to just call them up and explain your situation and give them an amount that you can make on a monthly payment or maybe suggest another up front lump sum. Before you call you need to have a number in your head or an idea of what is going to be a reasonable payment for you. The only way to protect your credit is to make the payments.
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