Author Topic: Service/Company that Negotiates Down Credit Card Debt?  (Read 825 times)

jake1988

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Service/Company that Negotiates Down Credit Card Debt?
« on: May 07, 2019, 08:02:43 AM »
A family member has asked for my help to go with him during his divorce proceeding and as part of this process attend these "pre-trials" thus far and to the trial if it goes there. He has asked for my opinion/support along the way regarding how to potentially settle the divorce and part of this was understanding the finances of the marriage at a high level.

Long story short, there are 3 credit cards with a total balance of $12K and a line of credit / consolidated loan as well that totals about $13K for a total of $25K of this type of debt. From my understanding, the $13K is essentially other credit cards that got consolidated into this loc that I believe has a lower interest rate. All of the loans/CCs are in his name and will be his responsibility moving forward (long story), I haven't seen the paperwork, but he mentioned he is paying $700 per month on "all of the debt" and referenced it being the minimum payment.

My question is aren't there companies/services that will work with people in his situation to try and lower the amount owed to the credit card companies? This is an area I know absolutely nothing about and have done some Googling, but still getting caught up to speed and am trying to understand this better as he has been making minimum payments for a long time and is making no progress, nor realizes it either. Not sure if this changes anything, but I believe he has been making payments, just minimum or small payments to the CC companies, so it's not like he is a no-payer that hasn't sent them any money (which I would think would actually encourage them to want to settle/lower the amount due if he was a no payer vs them taking minimum payments for the next 5000 years).

A very off the reservation idea, but would bankruptcy be something to consider? Given his income ($45K) and CC behavior and if his divorce proceeding goes to court that will be another $5K-$10K in legal fees, I just can't see this ever changing/being resolved. Even if this was a possibility, the understanding is not there and it's clear any help/guidance from family does not register, which is a different, overarching problem as well.

Enigma

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Re: Service/Company that Negotiates Down Credit Card Debt?
« Reply #1 on: May 07, 2019, 08:58:56 AM »
I have a couple of friends that are going through divorces.  First, the divorce itself is sometimes a war in which there is a ton of collateral damage.  Saying it may cost 5-10k in more legal fees if it goes to court doesnt give me a warm and fuzzy about the situation.  Until his divorce is final it is hard for him to plan the financial future.  As for his credit cards.  If he knows those will be his and his alone...  He could find a 0% credit card with a rollover option.  Even if the fee is 1% it would help him get everything down to 0%.

Many of the companies/services offered are nothing more than letter writing to the credit card companies in the hopes they write off debt, clear up issues, and lower interest rates.  This is something that he can do on his own as well.  If he calls up the companies and tells them that he is goign through a life-crisis of a divorce they can sometimes lower the rate for a specified time.  If he has been a long time customer they may want to keep him for the future benefit of him banking with them.

Best thing to do is finalize the divorce and then plan the financial recovery.

jake1988

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Re: Service/Company that Negotiates Down Credit Card Debt?
« Reply #2 on: May 07, 2019, 09:16:36 AM »
I have a couple of friends that are going through divorces.  First, the divorce itself is sometimes a war in which there is a ton of collateral damage.  Saying it may cost 5-10k in more legal fees if it goes to court doesnt give me a warm and fuzzy about the situation.  Until his divorce is final it is hard for him to plan the financial future.  As for his credit cards.  If he knows those will be his and his alone...  He could find a 0% credit card with a rollover option.  Even if the fee is 1% it would help him get everything down to 0%.

Many of the companies/services offered are nothing more than letter writing to the credit card companies in the hopes they write off debt, clear up issues, and lower interest rates.  This is something that he can do on his own as well.  If he calls up the companies and tells them that he is goign through a life-crisis of a divorce they can sometimes lower the rate for a specified time.  If he has been a long time customer they may want to keep him for the future benefit of him banking with them.

Best thing to do is finalize the divorce and then plan the financial recovery.

You are correct, WW3 and all the cards are stacked against him, truly a sad situation and some very unethical things being done from her side, he has taken the high road and I've mentioned to him numerous times, she has some serious karma going against her in the future. Divorce truly brings out the worst in people, experiencing that firsthand, if there is a dollar to be taken, you really see what people are made of in these situations. The $5K-$10K I referenced is what his lawyer said it would cost approximately for her fees if it goes to court to cover prepping for court, attending, and all of the steps alongside that. She was upfront about that to help us analyze if a settlement offer is made and how to view it considering the alternative of going to court.

jake1988

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Re: Service/Company that Negotiates Down Credit Card Debt?
« Reply #3 on: May 07, 2019, 09:17:59 AM »
I did some research and called and talked to GreenPath - www.greenpath.com

From what I have learned thus far there are a few roads someone can go down in this situation - actually this graph summarizes it best. https://getoutofdebt.org/get-out-of-debt-calculator

Cassie

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Re: Service/Company that Negotiates Down Credit Card Debt?
« Reply #4 on: May 07, 2019, 10:37:55 AM »
Consumer credit is a nonprofit that can help him.

Saving in Austin

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Re: Service/Company that Negotiates Down Credit Card Debt?
« Reply #5 on: May 07, 2019, 05:45:23 PM »
National Foundation for Credit Counseling
(800) 388-2227
www.nfcc.org
As the nation's largest financial counseling organization, the NFCC Member Agency Network includes more than 700 community-based offices located in all 50 states and Puerto Rico. More than three million consumers annually receive financial counseling and education from NFCC Member Agencies in person, over the phone, or online. To locate an NFCC Member Agency in your area call 800-388-2227. Para ayuda en Espaņol Ilama al 800-682-9832.

lindadiane1130

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Re: Service/Company that Negotiates Down Credit Card Debt?
« Reply #6 on: July 21, 2019, 12:17:48 AM »
The main thing I have to offer is personal experience negotiating credit card settlement for myself.  I had to do this as I had been off work with an injury and could only manage part-time upon return (50% reduction in income).  I watched a ton of youtube videos and found actual sound advice from Michael Bovee.  I bought a couple of e-books for extra research, but his videos on the subject were spot on.  I was able to eventually settle three separate credit cards for less than 30% of the original balance.  Your credit takes a hit, but it is temporary and as the guy says  "you don't have a credit problem, you have a debt problem".  Last account was settled a few months ago.  I applied for a Capital One card to begin rebuilding credit (vow to never rack up $ again, but following best advice to rebuild credit), got approved and also approved for PC Financial.  Back in the day there was actual help from non-profits and such, but those days are long gone and anyone offering to settle debt for you is in it for profit.  It takes a while depending on the creditor, but if I did it, anyone can do it...

secondcor521

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Re: Service/Company that Negotiates Down Credit Card Debt?
« Reply #7 on: July 21, 2019, 06:21:17 PM »
He can do it himself - just call up the credit card companies, explain the situation, and ask what they can do for him.  They may lower interest rates, may allow him to skip some payments (not smart in the long run, but maybe necessary in the short run), and may lower the balances.  Although if he is current, they will very likely not reduce the balances.  And he should try to stay current.

Additionally, he should try to resolve his divorce via mediation.  Mediation can be multiple times faster than a court trial, is definitely cheaper by multiples, and it is a lot more certain than a court trial.  It is probably also less stressful.

Filing for bankruptcy would royally annoy his divorce attorney and would probably mean he couldn't get a fair shake from the legal profession in his town for decades.  Besides, even if he ends up $35K in debt from credit cards and divorce costs, he can dig out of that in a few years if he buckles down and lives very cheaply.