Posted on August 17, 2009 at 12:45 pm I've been dealing with BoA for about 5 months now, we finally did a pre-planned family budget and assigned a dollar to everything before it came into our account.  We prioritized everything that had to get paid, sorted out the "four walls" (food, shelter, utilities, and clothing), then put the debt payments in order of priority next, and it came out that there was no money left over to pay BoA.So, not wanting to just not pay them, I call BoA and say basically "Hey, we've been going backwards every month, but credit has allowed us to stay 'afloat', but it's not getting any better.  We prioritized our budget, and after groceries and such, there's no money left over to pay our debt with you guys right now.  Can you do a Settlement?"Balance was $23k or so.  We went back and forth, they said they could take $15k right off the bat, I knew that was literally impossible, short of someone buying my 1990 beater car that's worth maybe $1000, and giving me $15k for it (aka not likely).  I said "we can probably come up with around $1700 cash right at this moment".  That wouldn't fly, so they said, "well, just hold off on your payments you've been making, and bank some of that money, then maybe you can do a larger settlement later..."That goes on for a few weeks, eventually they say $10k is the lowest they can go, which again wasn't do-able.  I came back with around 18% that I could come up with, skipping other payments to pay them off, etc.  Just about 2 months ago they said something about "we can't do a settlement yet, there's new regulations that just went into affect, you'll have to be at least 90 days past due, so just wait..."They call a few times in the last 2 months, I mention the settlement, they keep saying "can't yet", yadda yadda... BUT, one lady says "if you wait a little while longer, you'll probably be able to settle for around 20, maybe 25% of the balance".  So fast forward to today, they call and now they're claiming that they can't do less than $11k, I tell the guy "I'm sorry there's nothing I can do, we can't keep making the payments going forward, it'll bankrupt us.  But we can skip other payments to come up with an amicable settlement that we both agree on, and you guys will get some payment for the balance, and we won't have the balance to worry about going forward"...The guy says "sorry can't do that, do you want me to just mark you down as 'unwilling to pay'?"  I reply "No, you can mark down 'unable to pay'.  It's not as if I have the money just sitting around somewhere..."  I think this tipped him off because then he says "ok, hold on a second..." then about a minute later someone else comes on the phone and plays the tough guy, like "So I understand you're unwilling to pay your balance, why is that?"  I reply "no, we're unable to pa...." {he cuts me off} "so why are you asking for a settlement then if you can't pay?" (I can see where this is going, trying to get an emotional rise out of me, so I do my best to stay calm and not fall into their game...)  I explain to him again "Sir, we can't keep making the payments going forward.  But we're willing to settle if..." {interrupts again} "How can you settle if you don't even have the money now?"  I'm about to rip this dude's nuts off through the phone, but I know he's just, as Dave Ramsey calls him a "bottom of the barrel collector", who in 2 months probably will have a different job because he hates what he does so much right now...  This time I tell him "Sir, I've been calm with you, if you could, let me explain to you..." I explain the situation, with a lot of loud "mmm hmmm"'s coming from the other end of the phone.Long story short, he keeps trying to play hardball, tells me "there's no settlement offer listed on your account or in your notes..." even though about 8 or 10 unique individuals over the past few months have read those notes back to me from my account without me telling them about it (aka he was *lying*).  Eventually he started trying to say "listen, we loaned you money, you agreed to pay, but you're not willing to pay it?" to which I replied, "Sir, I already told you the situation, I'm trying to solve this going forward for both of..." {interrupts again with some hardball crap}At this point I say, "Sir, I've been calm with you, and very polite to everyone else at Bank of America.  Every time you call, I pick up the phone, and I've personally called you guys multiple times to try to resolve this issue for everyone.  I know the game you're plaing with me right now, but if you keep interrupting me and everything you're doing, I'm going to hang up on you"  To which he replied "Well then hang up now..."  I again resumed explaining my situation, and he repeated over and over "Well hang up now, hang up now... hang up now..." so I calmly said "Ok sir, it's been nice talking to you, thank you for your time".Dave Ramsey was right... every other person I've talked to there has been pretty nice.  They're firm, but they're pretty nice.  But this dude, and the guy who transferred me to him to play their little game... scum man... scum.Anyhow, what the heck are they talking about, new federal regulations, etc?  They keep saying "in 2 months this will go right to charge off..." is that really all that bad for me?  I understand collectors (though they're filled with even more scum than the credit card companies) are often willing to accept a settlement for less than the credit card companies, because they paid probably thirty cents on the dollar for the debt?I really don't care who I deal with, and if they try to sue us, I'll show our budget, and they'll find literally about $50 left over every month that we're banking into building an emergency fund (now currently up to a whopping $300!!), so it's not like they're going to get any money garnishing, and there's no assets to take (the house is worth less than we owe, the kids eat all the food every two weeks, I drive a $1000 (probably less) beater, and the minivan is maybe worth a few thousand dollars (though it's the only source of transportation for the family, so I doubt a judge would award that).All I want is to figure something out that we can pay (skipping other payments for a month is one option, to pay a settlement), or something so that they're satisfied, and the debt is gone (or on its way out).  Any suggestions?

Posted on August 17, 2009 at 1:05 pm Hi Barwick- sorry to hear about that frustrating call the other day. It sounds like you did your best not to let some unprofessional collector get the best of you. So here is the deal with Bank of America- what they are telling you (the first few people you spoke with) is fairly accurate. The closer you are to the debt charging off (180 days/6 months past due) the lower the settlement offer will be for them. And considering your balance size, you should be able to settle the debt right before it charges off for roughly 20%. The reason they don't settle for lower percentages when you are 90-150 days past due is because you aren't too far behind yet. They are hoping that there is a chance you can catch up on your monthly payments, so they can bleed you out each month at a default interest rate. They make more money that way. So, step one is to determine how far past due you are. Take a look at your statement and see what the date was when you missed your first paymnent. The day after that, you would be 1 day past due. One month later, 30 days past due etc. You want to try and settle the debt at some point between 150-180 days past due. And, BOA will often settle the debt over 3-4 months (you don't always have to pay the settlement in one lump sum). So you want to offer that percentage over a few months to give you some additional breathing room. If you need help with your situation, feel free to ask some more questions on the forum or fill out a form on the website to get a free consultation. I will be around today if you need some additional insight but I hope that helps for now.  

Posted on August 17, 2009 at 2:07 pm Thanks Steven.  That's some great information.Right now we're on a payment plan with them at like 4.5%, they said normally after missing a few payments you go off it, but they (the nice folks I get when I call them) said lately they've just been keeping people on it.  So we're not racking up thousands of extra interest between then and now...They did mention the 3-4 months thing a few times, which might help, but we're still in the situation where we don't have the money to make the "monthly" payments over 3-4 months, so a one-time lump sum would probably be best (where we talk to the mortgage, 2nd mortgage, student loans, other credit cards, etc...) and say "Look, we've got to get this other account paid off, can we skip this month's payment?"We'll see where they stand, I feel pretty crappy in the first place about this, but knowing that they rape us through the federal reserve's "fractional reserve" scam makes me feel not quite as bad, but still... I signed for the debt, I should pay it, just can't right now...

Posted on August 17, 2009 at 2:23 pm I totally understand. I wanted to clarify one point though just to make sure you understood what I was saying in regards to a lump sum vs. structured settlement. Specifically, if you settle for 20% of the total debt amount, they may allow you to spread that 20% out over a few payments. So, let's say you settle for $5,000. Instead of paying them $5,000 all at once, you may have the option to make 3 payments of $1,667 or maybe even 4 payments of $1,250. Just something to consider- that would be referred to as a "structured settlement." You may have understood that from the get go but it is something I wanted to touch upon again. Most people, if they can, would prefer to pay out the settlement amount over time as opposed to all at once, but whatever suits you best if it comes to that point.