A Debt Settlement Miracle – Part 2

If you are new to the blog, click HERE to start at the beginning of my story.
POST #31?
Per my conversation with Billy, I called on March 2nd to speak with his manager, Bucky.
While on hold to talk with Bucky, I knew this was the final moment. My last move. Everything I had done for the last 10 weeks had lead to this.
When Bucky got on the phone, I took a deep breath and for the umpteenth time told my story. He listened. Asked all the same questions Billy had asked. I kept my story straight. Explained where the money was coming from and why this was my best offer.
Bucky was very considerate and calm during the call and seemed to really hear what I was saying. He said he would talk to the VP who gets out of a meeting in 2 hours. I thanked him for his time and consideration on behalf of myself and my family. Every time I said those words, I really did get choked up. Even though the debt settlement process does require some manipulation and hard-nosed negotiation, there was a simple truth behind all of this:

I was doing all of this for my family.

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And that was it….my last effort. If Bucky declined my offer, there would be no other option than to scrounge up another $1300 and settle for $9800. Not sure where the dough would come from.
And then…..four hours later my phone rang.
Was this the call? Was this the “DAY”?
It was Billy. I could tell from his tone of voice that he had good news.

” I am happy to say that your offer has been accepted.

Did you hear me?

They said yes!”

I was ecstatic, a bit speechless. I thanked him for his tenacity and sympathy. We both acknowledged that in the past 2 days I accomplished more than I had in the last 2 months. True to form, Billy offered an honest piece of insight. He said he likes working in Recovery because he can really help people.
He really helped me. His willingness to let me speak to his supervisors and managers allowed me to get the deal I needed. Unlike so many reps, he got out of the way. Yes, he was patient and attentive, but his most important role was to NOT interfere with my personal momentum.
He kept me on the phone as we prepped the letter, then faxed it to me. When we got off the phone, I screamed for joy as loud as I could. I ran in to tell my wife! It was a beautiful embrace. We looked into each other’s eyes and she said, “You did it, baby!”
Nope, we did it.
If not for the love of my family, I never would have spent the hundreds of hours of time and energy to go through this debt settlement process.
Here are the final stats:

  • $141,655.56 worth of debt settled for $40,449.11.

  • 28% or 28 cents on the dollar.

This is the end of my deb settlement story, but not the end of my financial recovery story. There are still 3 things I need to do:

  • Loan mod on my 1st mortgage.

  • Settle or loan mod my 2nd mortgage.

  • Build personal wealth and financial security.

More to come…….
Stay tuned and stay afloat. Wealth and freedom are in your future.
Jonathan

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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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Trying To Avoid Charge Off

If you are new to the blog, click HERE to start at the beginning of my story.
POST #28?
I was content to let my account charge off at the end of February and go to the Recovery Department until my CRN coach tried to talk me out of it.
There was a complication that she wanted to avoid. Very soon, I was going to apply for a loan mod on my house (yes my story continues!). She thought it might be risky to play chicken with the bank this one last time. There were for 2 reasons:

thunderbirds
Image by Blondie5000 via Flickr
  • If I got sued by my VISA account, it would destroy my chances at a loan mod.

  • My mortgage bank would be less likely to grant a loan mod if I had outstanding unsecured debt.

With the loan mod on deck, her advice was to not screw around. Let’s land this last deal and move on.
I trusted CRN implicitly so I went along with the advice. I called the VISA department 6 times between 2/25-2/28 in an effort to settle. My CRN rep even decided to step in and make the calls for me. This would end up costing me a bit more money if she landed the deal, but it would be worth it.
We called on Friday, Saturday, Sunday – multiple times each day. We re-told the story over and over. We spoke with call centers in Iowa and Oregon. We weathered threats of judgments and law suits.

PEARL HARBOR, Hawaii (May 4, 2007) - Chief Min...
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Unfortunately, nothing worked. The VISA collections department was firm. And when I say firm, I mean” firm like the buttocks of a body builder” firm.
THEY DID NOT BUDGE.
After our last ditch effort failed on Sunday 2/28, we resolved ourselves to charge off. But not all was lost.
On Sunday evening 2/28 we called the Recovery Department. Apparently, the account would be there on Monday morning. We wanted to get a head start so we called them. We told the rep that our prior offers were for $5000, but I put my ego aside and asked one more friend to loan me $2500. This would make our total offer $7500. The rep was impressed with my tenacity. He was sympathetic, smart and straight forward. He listened.
From his point of view it was a long shot – a BIG long shot. But he read through my notes and could tell I was sincere and up front. As long as the account hit his system in the morning, he agreed to bring it to his supervisor first thing.
We could only pray that the account would appear in his computer the next day and NOT end up in purgatory.
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
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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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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$130,000 of Credit Debt – The Beginning: How could I Let It Happen?

POST # 2
When I look back on what happened, the writing was on the wall. If I had been smart enough to have a business manager, this would have never happened.
In 2004, things were going great. I was newly married, had no kids, no debt and had just bought my first home. I was composing music for the hit television show Joan of ArcadiaMoney was no object. I was like a kid in candy store. Just 4 years earlier, I was living in a mini-van with my wife (then girlfriend) touring the United States as a folk rock duo, Dogwood Moon. We were lucky to make $5,000/month and if we did, we felt like we had money.
All of sudden I got a lucky break and I was making well over $400,000/yr. I had no debt aside from my home.  My savings account was steadily growing and about to hit $100,000. Neither my wife, nor I, could spend all the money. It was nice, to say the least.
We went about our business for the next 2 years. Saving a bunch and spending a bunch. I justified my spending because I had a great job and was saving a butt-load of cash every month. Why not spend!?!?
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Mistake number 1:

ASSUMING THE GOOD TIMES WILL LAST FOREVER

Fast forward to 2006.

  • My TV show got canceled.

  • The economy tanked.

  • The real estate market tanked.

  • My interest only 2 yr ARM was about to be called.

  • My wife gave birth to our first beautiful child.

  • None of my contacts in the biz were working.

  • I went thru all of my savings…..yup ALL $100,000 of it.

  • I borrowed another $80,000 from a line of credit on my house.

There were a lot red flags….but I ignored them.
I kept thinking that big gig was right around the corner.  Well guess what? It wasn’t.

But that didn’t stop me. I kept acting like I was still making a lot of money. I had the POTENTIAL didn’t I? Why severely adjust my lifestyle when things will pick up any minute?
By the end of 2006, I finally made some changes. Here’s where I stood:

  • I sold my home for a profit.

  • I paid off the $80,000 line of credit.

  • I had about $80,000 in cash profit from the sale.

  • No job, but lots of prospects.

  • Ignorant hope that everything would just work itself out.

Instead of socking that money away and downsizing to an apartment within our means. I did what any wide-eyed monkey with a little bit of money and the ignorant hope of future success would do:

I BOUGHT ANOTHER HOUSE AND SUNK ALL OF THAT MONEY INTO REMODELING IT.

You see, I had turned a nice profit from my first house. That was easy, right? It would happen again, right. WRONG. That wrong assumption was the straw the broke the camel’s back.

From July 2007- July 2009 I dug myself into the deepest financial hole of my life.

Here were my other BIG MISTAKES:

  • I lived beyond my means.

  • Instead of saving some of my small real estate profit, I put it back into the sagging real estate market.

  • I continued to spend most of my time trying to get gigs in the TV market – which had crashed.

  • And finally:  DENIAL, DENIAL, DENIAL!

In July 2009, things came to a head. I was $130,000 in debt and living off my lines of credit. I had 2 more months of that until there would be no choice other than bankruptcy.
Desperation is the mother of invention. I would feel humiliated to go bankrupt, foreclose on our house. I couldn’t let myself be a Hollywood statistic……even though I already was!
After 6 weeks of research I came to the conclusion that debt settlement was the right choice for me. In the next few posts I’ll discuss:

  • Why I chose debt settlement over bankruptcy, consumer credit counseling or debt consolidation?

Stay tuned, stay afloat. WEALTH AND FREEDOM ARE IN YOUR FUTURE!

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