Posted on June 3, 2009 at 9:27 am Here's the short of the situation:House that we owe more on than it's worth (owe maybe $15k more than we could sell for), 2 student loans ($25k total), 3 revolving accounts (1 with Bank of America at $23k - the problem, 1 with Chase at $5500, 1 with Home Depot at $1400), some medical bills, etc...For about 2-3 years now, we've been trying to pay debt off, but you know how it goes, you pay something down, and the car needs new tires, or the fridge breaks, or something stupid happens, and you lose everything you just paid off and then some.  We've cut all expenses we could cut, here's what we spend our money on today:MortgageStudent LoansCredit CardsMedical BillsHome Phone/Internet (we run our business out of our home)Charity (it's small, but I won't stop this, I will always give something)Lawn care (we have 1 acre, and I physically cannot breathe for days after mowing it myself, bad allergies)Natural GasElectricityCell Phones (emergency, and the aforementioned business)GasolineCar InsuranceKids swim lessonsGroceriesOut of everything we used to have, we've dropped:CableNew clothes (until the pants I'm wearing physically tear apart from wear, though we keep our clothes in nice order, they just wear out over time)Meals out (we went out for Mother's day, that was the first time in months)Saving/investmentAny other random luxuries you can think of...The more this going backwards happened, the less we were able to pay down, till today, we're pretty much stuck where we can't pay for everything and still buy groceries.  So it's pretty much come down to the point where we've got to buy food first, utilities, the mortgage, then the other bills.I've spoken with BOA about settlement (I'm on a payment plan with them now), and they originally said right off the bat they'd do $15,000 (60%), I said there's no possible way I'd be able to come up with that, they said "come back with what you can", I offered something like $2700 (11%) of the balance, which was stretching, they obviously turned that down and said "we can do $9500 (40%)".  I waited a little while and called back, offered $3500 (15%), and they pretty much said they can't do that, and can't do any lower than $9500.I know they're able to do less than $9500, but don't want to, what is the best solution in this case?  How can I get them to work with me to get the amount lower?  And what's the typical amount on the dollar that a collector is going to pay on the dollar for this amount debt ($23k)?  I know they're not going to settle for less than they can sell it to a collector.As for more specifics, we'll be a little over 60 days past due coming up here, and I'm going to have to miss this month's payment too, to pay for the necessities.  At this point I could really care less about the credit if it's going to keep my family afloat, but if I can salvage as much as I can, the better.  And if I can get rid of this bill once and for all by stretching a little bit, then I can pay the other bills without a problem.

Posted on June 3, 2009 at 11:55 am The amount BOA would settle for depends on how far past due the account is. I know that typically people can get lower settlements than what they are offering you at this time if the account is further delinquent. If you miss another payment or two, I'd be willing to bet that if you call them back and submit another offer for a lower percentage they may consider it strongly. They do not want the account to charge off, which happens after 180 days past due (6 missed payments). At this point, they write the debt off as a loss to the IRS to get a tax break. After that point, the debt is no longer a solid asset to their books so they typically assign the debt to a third party collector after that. Ultimately, you can consider handling this yourself, or you may want to see if there is a settlement company out there who has a long history of working with BOA directly to negotiate low settlements. You can fill out a form on DestroyDebt.Com for a free consultation if you aren't too sure what to do.

Posted on June 9, 2009 at 2:12 am Hello,I'm going to make this quick.  We're trying to settle with BOA right now and they told us that they could go no lower than 30 percent.  We're a little over 30 days from charge off.  We're going to try to get them lower so I'll post again if we bring them down further.  By the way, 30 percent ends up being 9650, so maybe they're looking for numbers rather than percentages...

Posted on June 9, 2009 at 7:13 am I would say that settlement amounts are most likely determined by multiple factors. For example, a lot of creditors will accept lower percentages if the balance is very high. Or, BOA for example, will accept lower percentages right before the debt charges off, while with some creditors the best percentages are offered in collections. Another factor of course is who the creditor is- some are better to negotiate with than others. And then there are other things to consider, such as, how old is the account? Or, have any balance transfers or cash advances been made recently? All of these things may have an effect as to how low the creditor is willing to settle for.

Posted on June 9, 2009 at 7:15 am Thanks for the info.  I was about to call them when I remembered that I had asked on here last week, but completely forgot to check.  Right now we just went into 60 days past with them, because I just shifted my thinking from "save my credit" to "screw my credit, keep the family fed and the necessities paid first, then pay the unsecured debt".

Posted on June 9, 2009 at 7:19 am I think prioritizing is a smart thing to do. Most of us would agree that food on the table and a roof over our heads is #1 on that list so I can't really blame you. With that being said, if you are only 60 days past due right now, it is not the best time to settle as you are not far enough past due. From the creditor's perspective, there is a chance that you could still catch up and bring your account current again, at which point they could continue raking in the interest from your monthly payments each month.

Posted on June 17, 2009 at 8:29 pm You're going to love this.They call me when I went past 60 days, I talked to the lady, real nice.  I mention how I'm not going to be able to pay it, explain that I just shifted my priorities from "keeping a good credit score" to "keeping food in the kids belly", she said "ok, I see where you're coming from, how you've been trying to work with us..."She said they just changed their policies so that they can't offer barely any debt settlement at 60 days past due, and kinda actually said "you might just have to wait a few more months before they'll talk about your settlement you offered..."So, it's pretty much a waiting game now.  Check back in a month or so and say "Hey, I think I can still do that 15%..."

Posted on July 16, 2009 at 3:41 pm Exactly. I am not surprised to hear that at all. Typically they will open up the door to negotiating around 150-180 days past due so hang in there for now. And if you need additional debt settlement suggestions let me know and I will be glad to help out.

Posted on July 20, 2009 at 9:25 am So- for suggestions for settlement- do you have any for me if my accounts are being handled by junk debt buyers for collections? Any advice would be greatly appreciated, thank you.

Posted on July 28, 2009 at 12:22 pm Junk debt buyers tend to offer lower settlement percentages since they purchase the debt for such a cheap price, sometimes as low as 5-10 cents on the dollar. If you have any money that you could put towards a settlement, that is what I would suggest. You can also fill out a form on DestroyDebt.Com to get matched up with a qualified provider if you aren't comfortable handling the negotiations on your own, or don't have the time to get the job done.