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...
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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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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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