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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.
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.
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