If you are new to the blog, click HERE to start at the beginning of my story.
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…
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.
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:
Calling every 2 weeks
Calmly explaining your story, YOUR TRUE STORY
Being gracious when offer are made, even if you can’t afford them
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.