Debt Settlement Breeds the Un-dead

If you are new to the blog, click HERE to start at the beginning of my story.
POST #25
It was Monday 12/28.
Like so many days during the past 2 weeks, I woke up and said to myself, “This is the day!!!!”
I hit the phone, called the rep and was ready to cut a deal. I had prepared for this day in a zillion different ways – not the least of which was borrowing money from my retirement account.
Everyone says to NEVER EVER touch your retirement account. Between taxes and early withdrawal fees, you can get killed. This is true. But in my case, a killer settlement on $100K would far out weigh the downside of pulling from retirement. It was a good decision both financially and psychologically. This may not be true for most people, but I knew it to be true for me.
Back to the phone call……
I dialed the number and sure enough, got the rep on the phone…..soooooo close.
Thankfully, he remembered me and my case.

Simulated view of a black hole in front of the...
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Unfortunately, my account was still in the collections black hole I call:
DEBT SETTLEMENT PURGATORY.
I really did feel like one of the undead. My CRN coach had prepared me in so many ways.

  • Be patient.

  • Stay focused.

  • Keep consistent.

But never did she mention that I would be the caretaker for a zombie account roaming the debt world in search of a home. At this point, hell, bankruptcy, seemed like it would be a relief. At least I would know where I was!
I just wanted these accounts to be killed. I actually had empathy for the zombies from those cult films.

A participant of a
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The rep told me to call back the next day.

December 29, 2009

………..Still a zombie.
….and the next day…..still no luck. In fact, I was told my account was frozen. It would definitely not be released to the Recovery Department until January 1st or 2nd of 2010.

Somebody kill me!!!!!!!!!

It was December 30, 2009. If I was to benefit from the timing of the last day of the last month of the year…..I had one more day to do it.
I prayed to the zombies of purgatory to take pity on me. Delivery me from this fire!
Just like a good horror film, we’ll leave this post on a cliff-hanger.
Stay tuned. Stay afloat. Wealth and freedom are in your future.
Jonathan

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Debt Settlement Weapon of Choice – Consumer Recovery Network

If you are new to the blog, click HERE to start at the beginning of my story.
POST #21
I have shared with you, again and again, that debt settlement is a process. It forced me to do a lot of research, tested my patience and resolve and challenged my brain. But I want to make one thing clear, I am not an expert. I am a FIRC (former irresponsible recovering consumer) who successfully followed the coaching and guidelines of the Consumer Recovery Network DIY program.
Several times I have looked back on this experience and wondered if I could have done it all on my own without the help of a DIY program.  There is a lot of free info on the internet. Heck, this blog itself shows you many of the techniques used to navigate the process.  After careful review, I have concluded that you CAN do it without the help of a company…..but I don’t recommend it.
Here are a few pitfalls of going solo:

Ozzfest 2007: Zakk's Solo 3
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  • Every situation and bank negotiation is different. You will have to improvise along the way. A wrong choice can kill the deal.

  • Timing is everything. Not all banks process the collections in the same time line. You will be doing some guessing.

  • The reps will lie to you. How will you sift through the BS?

I followed CRN’s DIY program. I listened to the CDs, read the workbook and had about 30 hours of phone calls with my CRN coach. Guess which was the most indispensable aspect?

The advice from my coach.

There were a zillion forks in the road during my debt settlement. All of the solutions came from discussions with my coach. I have shared many of these solutions already, but I want to add one last thing.
I knew was getting close to a settlement on these 2 big line of credit accounts. It would take a bit of fancy footwork, negotiating and quick thinking. There was critical phone call I had to make and decided to add an extra safety measure. This technique, appropriately called the Debt Settlement Weapon of Choice, can only be done when you have a coach. Hang on, this is a good one!
I called my CRN coach, put her on mute, then conferenced in the bank.  While I was talking with the bank, my CRN coach was listening in and emailing me questions to ask the bank rep. GENIUS!
We only did this once, during a critical call. It was a great help because, despite all of my preparedness, the flow of this particular conversation was beyond my expertise. I couldn’t distill the truth from the BS, nor could I determine the best questions to ask.
In short, you can do a full on “free” DIY by using info on the internet.  But for me, I concluded it was best to have an expert coach offering advice and counsel specific to my situation.  Especially when that advice was in real time during the conversation, via email!!!
Stay tuned. Stay afloat. Wealth and freedom are in your future.
Jonathan

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Debt Settlement Insider Info

If you are new to the blog, click HERE to start at the beginning of my story.
POST #20
I was flying high from my first settlement.  It was an amazing feeling to say the least. However, I still had my work cut out for me. Even though I had tons of information and momentum, I still had 3 accounts totaling over $100,000 to deal with. In the scheme of things, the party was just getting started.
I did have a few things going for me though:

  • I knew the best deals were had in the recovery department.

  • I could use my first settlement of 35% as bargaining power when reps said that the bank never settles for less that 50%.

At the advice of my CRN rep, I made a bold pro-active move.  Two of my line of credit accounts were set to charge off on 12/24/09. Even though it this was 3 weeks away, she suggested that I call the Recovery Department and start the conversation with them. Wow was this an interesting phonecall.
Since I had been calling every other week for 2 months, the notes on my account would add credence to my plea for a better settlement. Here’s what happened:
On 12/8/09, I spoke with Ms. XXX in the Recovery Dept and told her that the collection department offered me a settlement of 60%, but I couldn’t afford it. I then offered her $20K to settle on both of my accounts – balances totaling over $100,000.

She said,  “That”™s an awesome settlement and if the accounts were in my department, I would accept it right now!”  Let me repeat this because it is amazing!

“That”™s an awesome settlement and if the accounts were in my department, I would accept it right now!”

Unfortunately for both of us, my accounts weren’t in her department so we couldn’t strike a deal. But this was exciting news nonetheless.
Then she said another amazing thing:

“I wouldn”™t recommend this, but if you want a better settlement, you should wait for the account to reach the Recovery Department.”

Okay…..now I don’t know about you, but when the rep at the bank essentially tells me how it works…

I LISTEN!!!!!

As you can see, this rep let the cat out of the bag. From what I understand, reps in these departments are like sales people. They get a commission. At the end of the month/year, they are offered incentives to settle more accounts. Maybe my $20k would put this rep into another bonus bracket and she would be able to afford the trip to Hawaii with her family. Who knows? Either way, I was going to wait for charge off on 12/24, wait for the account to go to the Recovery Department and probably get a settlement close to $20k.
I knew this wasn’t a sure thing, because nothing ever is. But based on the information provided thus far, it seemed likely.

Knights in Shining Armor III
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I want to add something here. In no way am I suggesting that the best route for debt settlement is to wait for your account to charge off.  Remember, debt settlement is like dating with the bank. You have to go through every “chivalrous” routine before you get kissed. In terms of the bank, chivalry includes:

  1. Calling every 2 weeks

  2. Calmly explaining your story, YOUR TRUE STORY

  3. Being gracious when offer are made, even if you can’t afford them

  4. Being genuine by letting the bank know you are not some scum-bag trying get out of your debt.

In the coming posts I will detail how the settlement on these accounts actually went down.
Stay tuned. Stay afloat. Wealth and freedom are in your future.
Jonathan

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Debt Settlement Mathematics: 2 + 2 = delinquent

If you are new to the blog, click HERE to start at the beginning of my story.
POST #17
So here I am in the middle of the story.  It’s a waiting game, but not without excitement. The collections calls have accelerated to 3-4 times a day and the letters come 2-3 times a week.
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I have repeated my story dozens of times to dozens of different representatives.  After consulting with my CRN rep, we decided to pursue one of my accounts more actively because it was accelerated to charge off .
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The bank normally delays putting accounts into charge off for about 150 days, BUT they have the option of doing it earlier.
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I kept track of how the accounts were progressing but the rules seemed to keep changing. I’d call on Monday and they’d say I was 120 days late and charge off was in 30 days. Then I’d call again on Friday, 5 days later, and they’d say the account was 143 days late and charge off was in 17 days. If you ask me, that’s funny math…..and we all wonder why our numbers in Quicken or Quickbooks never match the bank’s numbers!  The reps were just playing games to scare me into making a payment. Nice try!!!
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Regardless of their math, I kept calling every couple of days and kept careful notes. I knew a settlement was imminent. This account had a balance of about $20,000.  I would offer $5,000 as a settlement, and they would counter at $15,000. Every rep said that even if they could get a manager to approve a lower offer, they had never seen a settlement for lower than 60% or in my case, $12,000.
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That was a BLATANT lie.  Banks regularly make debt settlements for 25%-35%, but each department has certain restrictions. The Collections Department usually can’t go lower than 50%. However, once your account moves to charge off, the rules change.
On November 25, 2009, I made my final call to the Collections Department.
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WASHINGTON - NOVEMBER 20: A turkey named 'May'...

Then next day was Thanksgiving.
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I decided to take the day off from calling the bank, knowing that on Friday, I would call the Recovery Department. Truthfully, I was hoping to cut a deal prior to Thanksgiving so that I would have something to celebrate, but it all worked out for the best. In fact, my CRN rep encouraged me to fold my Thanksgiving dinner into the next conversation with the bank.
Stay tuned. Stay afloat. Wealth and freedom are in your future.
Jonathan

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Debt Settlement is like playing chicken with the bank

If you are new to the blog, click HERE to start at the beginning of my story.
POST #16
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REMINDER:  Today is my interview with YourMoneyMattersRadio. Click on the link to locate an AM station, podcast or iTunes radio station to hear the interview.
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So here I am in the midst of my first debt settlement conversation and the rep is trying to get a payment out of me in order to avoid charge off. This scenario had come up in prior conversations with my CRN counselor.
What CRN explained is that making a payment to avoid charge off is like hitting the reset button on the debt settlement process. I am still in debt for the full amount, but now out 500 bones. Even worse, the bank knows they can stronghold me into making payments again. The whole idea of debt settlement is to explain to the bank that you can’t afford to make payments, but you can afford to borrow money from another source to pay off the debt at a compromised sum.
My CRN rep also explained that the bank is MORE willing to settle for a lower amount once the account goes to charge off.  Yes, there was a risk that the bank will escalate my case and take me to court, but this was a small risk since I had been in such close contact with them.
As such, I decided to roll the dice. I ONCE AGAIN told the rep that since I am in a financial hardship, I can”™t come up with $500.  I won’t ask a family member to borrow $500 to only get current on my debt. The loan from a family member was contingent on eliminating my debt with the bank.  Reluctantly, the rep wished me luck and said they would stay in touch.
I want to acknowledge an important point here.  The tide had shifted. I was more in control. The bank was willing to settle. They couldn’t scare me with bad credit ratings and charge off threats. I knew the longer we both waited, the more likely that I would get a lower settlement offer.

Image by Blondie5000 via Flickr

Yes, I was playing chicken with the bank.
thunderbirds
BUT, I felt very confident and informed due to my personal focus, steady education and CRN’s expert coaching.
Stay tuned. Stay afloat. Wealth and freedom are in your future.
Jonathan

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