A Debt Settlement Miracle – Part 1

If you are new to the blog, click HERE to start at the beginning of my story.
POST #30?

Mafia spaghetti with seafood and tomato sauce

How do we create an airtight counter offer?  An offer they can’t refuse….not because of the threat of a bloody horse head or anything “silly” like that. More like an offer where the numbers make so much sense that they are realistically un-movable.
Here’s where we stood:

  • Their offer:            $9808

  • My current offer:  $7500

  • My goal:                $8600

After several conversations with my CRN coach, we came up with the silver bullet.
My current offer was $7500. If I deferred March’s car payment of $514, that would bring us to $8014 – payable today.  Then I make an additional payment 30 days from now by deferring my April car payment of $514. Total offer: $8528. I can’t go beyond that amount because:

  • I have already borrowed from EVERYONE I could.

  • I have deferred as many other bills as possible.

  • I can’t defer my mortgage because that would jeopardize the loan mod process.

  • If it weren’t for the loan mod potential, I would just declare bankruptcy and fore-go all of this effort.

NYC - Queens - LIC: 5 Pointz - Roadrunner and ...

There were so many aspects about this offer that made it genius – in fact it was super genius.
I can say this without bragging because I didn’t come up with it –  my CRN coach did. Obviously not her first rodeo. It was exactly this type of creative bargaining that can make or break a deal.
I called Billy in Recovery and made this counter offer. He was impressed by our creativity and resolve, though not AT ALL confident.
He went to the sup and very quickly came back with the same $9808.00 offer from yesterday.
I thanked him for his time and reiterated my intention for doing all of this was 3 fold:

  • To shield my family from anymore hardships.

  • Hold on to my house.

  • Offer a good faith settlement to the bank.

He was again sympathetic.  I asked him to bypass his sup and PLEASE talk to his manager. He agreed.
Two hours later, he called me back to say the manager had denied my offer.
It seemed like I had played my last card. What was left to do?
Then it hit me:

  • Maybe Billy’s compassion for me was a direct result of how I was telling the story.

  • Maybe if I spoke directly with the manager he would “get it” too?

Lucky for me, Billy agreed to make that happen.
Stay tuned. Stay afloat. Wealth and freedom are in your future.
Jonathan

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Debt Settlement Purgatory – Part 2

If you are new to the blog, click HERE to start at the beginning of my story.
POST #24
Still in purgatory……

200m
Image by MightyBoyBrian via Flickr

I made another pro-active call to the Recovery Department and this time I got a different answer.
They said the acct wouldn”™t reach their dept until I stopped making payments on my settlement with the collections department.

WHAT???????

I clarified that I had NOT accepted their settlement offer of 60%, per my discussion with collections on 12/16.  I reiterated that I could borrow $20k from a family friend to settle both accts.
“Let me see what I can do” The rep seemed eager and put me on hold.
At that moment, I was very hopeful.  My offer was going to the manager who would be yet another person in the recovery department aware of me and my case. I found that familiarity is a big factor in the success of debt settlement.  Unfortunately, the manager said we had to wait.
But this call still had merit. The rep promised to make sure collections corrected my account to reflect that I had not accepted a settlement yet.
It’s a good thing I caught this.  Had I not, this would have delayed my account further.
I waited another 2 days and called the recovery department again. It was 12/24, the day before Christmas. Just a month ago, my call the day before Thanksgiving resulted in a great settlement. Perhaps the timing of this call would have the same effect.

…..and it did!!

The rep asked me if I was waiting for the account to charge off. I confidently said I was not waiting for anything. The notes on my account should reflect that I am actively trying to make a good faith payment to you ASAP.  This rep said this:

  • Your account is in the process of charge off.

  • It should happen by Monday, 12/28.

  • Call me after 10AM PST Monday at my direct line.

  • I will gather info, talk to sups and be ready to handle this.

BOOOOO-YAAAAA!
I finally had a hard date. I found a person who wanted to work with me. He gave me a day and time to specifically call him to settle this account. It was Christmas eve.  It felt like I had been given a great Christmas present.
With a little patience, I would be a new man.

Xmas tree
Image via Wikipedia

Stay tuned. Stay afloat. Wealth and freedom are in your future.
Jonathan

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Debt Settlement Purgatory – Part 1

If you are new to the blog, click HERE to start at the beginning of my story.
POST #23

Lost title card
Image via Wikipedia

What is debt settlement purgatory?  It’s kind of like the sideways time line in the final season of “Lost“.  Confusing, frustrating, but does ultimately lead to nirvana. My account had left the Collections Department, but wasn’t yet in the Recovery Department.
Apparently, there is a dead time after collections but before recovery. The account is technically charged off, but doesn’t appear in any particular department. It’s like when you send an email and it leaves your sent box but never hits your outbox.  You know that just a moment ago it DID exist, but due to technology, you can’t find it. Well, this was a nut to crack. I had come this far and wasn’t going to let the critical last 2 weeks of the year get away from me.
Someone would have the answer. Someone would be able to wrangle my account. I just hadn’t found that person yet.  Where was my Jacob?  But remember what I had said at the beginning of the journey:

TENACITY AND HARD WORK

So I put my nose to the grindstone and called, and called, and called again. I kept telling my story over and over to rep after rep. I kept getting the same answers over and over again, “I am sorry Mr. Grossman, your account is not in my dept. It is on its way to the recovery dept, but won’t show up on their system for another day or so.”
According to the Recovery Department, the absolute latest it would hit them was 1/1/10. But that would be the beginning of a new month and a new fiscal year and this would likely hurt my negotiation.
It went on and on like this for 10 days. I had prepared myself for the big day of settling these 2 enormous accounts.  Settling $100,000 seemed almost within my grasp. I could taste the relief. Each day I woke up, I said to myself, “This is the day!”  I would get all amped up and prepared, then make the call only to find that I had to wait another day.  Time was getting thin.
It was December 22 – dangerously close to December 31st, the end of the year.
How would I get “unLost”?
Stay tuned…..
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
Image by LuvataciousSkull via Flickr
  • 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
Image by IslesPunkFan via Flickr

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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Credit Card Department Psychosis

If you are new to the blog, click HERE to start at the beginning of my story.
POST #19
Debt settlement is a very interesting process.

  • On the one hand it is simple: you negotiate a lump sum payment with your bank at a fraction of the amount owed and you both go your separate ways.
  • On the other hand, you are dealing with a corporation and as you may know from the movie The Corporation.

“If the dominant institution of our time [the corporation] has been created in the image of the psychopath, who bears the moral responsibility for it’s actions?”

This is the crux of the problem with debt settlement. It isn’t that the bank doesn’t want to settle, it’s that they behave like psychopaths.  Let’s remember:

  • In October, the credit department told me the never for less than 85%
  • In November the collection department told me the never settle for less than 60%
  • In December the recovery department told me they never settle for less than 40%

So how did I get a settlement for 35%?
Simple answer: Corporations are psychotic!

The Interior of Bedlam (Bethlem Royal Hospital...
Image via Wikipedia

But really, it came down to this. I discovered that when dealing with a corporation like a bank, I have to understand that different departments have different standards and quotas. The collections department is supposed to stonewall you at 60% because they know most consumers will be intimidated and settle. The bank also knows that once your account is in the recovery department, they have to make a better offer or will likely get nothing. Your credit will suffer once your account is in recovery, and they will use this as a bargaining chip. I already knew that credit repair was in my future, so I couldn’t let a few more points get in the way of a good deal.  Playing chicken with the bank!
Additionally, the deal can be contingent on the personality and mood of the rep with whom you are speaking.  Does this sound arbitrary and unfair? Yes. And it is.
With this information, I was able to navigate through the psychosis of the bank.

Top 5 points that helped me get good deal

  1. I didn’t get riled up by the reps who tried to incite me.

  2. I waited until the account went to the recovery department.

  3. I timed my negotiation at the end of the month, when reps were trying to meet quotas.

  4. I timed my negotiation at the end of the year, even bigger quotas on the line.

  5. I understood that the bank is a psychotic being and can (and will!) change it’s mind at the drop of dime…..or a few thousand bucks! 🙂

In the coming posts, I’ll discuss how I settled my 2 biggest accounts on December 31st, 2009. Last day of the last month of the year.  Let’s just say, that helped.
Stay tuned. Stay afloat. Wealth and freedom are in your future.
Jonathan

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First Debt Settlement Deal

If you are new to the blog, click HERE to start at the beginning of my story.
POST #18
On Friday, November 27, I made my first call to the Recovery Department. Knowing they would offer a better deal, I was quite optimistic.
As a conquering hero, I picked up the phone like a sword ready to slay my first debt dragon.

St George Slaying the Dragon

In this conversation, I integrated a technique that CRN had suggested – make my story real to the bank. If they see me as a family and not a number, they will be more likely to settle.  I re-told my back story with one addition – Thanksgiving dinner. It went something like this.
“At Thanksgiving dinner yesterday, I was really thinking about my debt.  I am so grateful for my family and I want to do everything I can to take care of them. As I said before, with my mortgage, child care etc”¦really struggling to get by. I want to do everything I can do avoid bankruptcy….”
This may seem manipulative, but it is also true for me.  Thanksgiving is my favorite holiday. It was authentic for me to talk about its meaning and how the imminence of bankruptcy reminded me what I am thankful for. I was sure my authenticity would help my case and make a settlement that day a sure thing. GUESS WHAT!!!!???

IT DIDN’T MAKE A SINGLE BIT OF DIFFERENCE THAT DAY.

But that didn’t deter me.
On 12/2, I finally made some headway.
I offered $5k to settle my $20k line of credit.  There was something different this day. This rep was the stereotypical bill collector. He had attitude and was attacking my credibility. He fired out questions like a machine gunman at a firing line.

  • How much are you making?

  • Your numbers don”™t add up? Who’s giving you money?

  • Why are you paying your other creditors and not us?

bull-dog

Had I been unprepared, I would have crumbled. This rep was like a bull dog.
He DID NOT believe me, nor did he like what I was saying. However, I just stayed calm. Explained my story again, as I had dozens of times before and waited for him to come around.
After 20 minutes of grilling, he finally agreed to take my $5K offer to his supervisor and then…………..play the victorious music…….

He came back on the line and to say his supervisor had approved a settlement for $6924.11, or 35% of the total.

I was ecstatic, though I didn’t let him know this. I couldn’t just jump at the offer because according to my story, I had to come up with another $2K. I thanked him for the generous offer, but said I needed to make a call to see if I could arrange for the additional funds.
In reality, I had saved and borrowed money in advance so that when this moment came I would have funds on hand.  I asked him to fax the offer so I had it writing. True to bullish form, this rep gave me a hassle about faxing a letter.
Hear me when I say this:

Without anything in writing, your verbal agreement is at jeopardy.

If you send in funds without an agreement in writing, they can apply those funds to principal, deny that a deal was cut and hold you on the hook for the balance.  Seems egregious, but it does happen.
After what seemed like hours of haggling, this bull dog faxed the letter. Per our agreement, I called back 2 days later and paid by check over the phone.
This was one of the greatest days of my life. It was a rush and definitely inspired me to move forward with my 3 other accounts. Holy cow! This method really works. I jumped for joy, hugged my wife, called my CRN rep……and then went back to the drawing board.
This was only 1 of 4 accounts and by far the smallest account. I still had another $110,000 to deal with…..but I was optimistic. And for good reason.
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.
———————–
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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