Debt Settlement – need advice

Hello – I stumbled upon this blog looking for any advice before I sign off on the offical paperwork for debt settlement. My situation might be like none other, but I currently owe credit cards 103,580.00 – yes, you read that right. I am a homeowner with a mortgage of over 475K as well. I am absolutley unable to make minimum payments anymore or I risk losing my home. I am 1 month behind on my mortgage becuase i was trying to pay off some of the credit cards instead. I consulted a debt consolidation firm who told me other than filing for bankruptcy, debt settlement might be my best option. I am at the point where I already dug myself in the grave with my debt and don’t know what other route to take. Has anyone done this before ??

Before you sign, several things you should know. If you are current on your CCs, they will not settle. The company will have you pay them and they will ‘hold’ your money until you are sufficiently behind that the CCs might (keyword here is MIGHT) settle. Then, once your credit report is hosed up, and if you are still with the company, they will try to settle with what you have ‘banked.’ The settlement company may or may not charge your a fee or commission. Now, you can do the same thing yourself and not risk dealing with a 3rd party.

Pay your mortgage first! CCs can wait. Read this forum and others to see which ones will not settle easily and decide your best course. Your credit report will get hosed regardless, but you might be able to come out better if you do it yourself. Go to ClarkHoward dot com and find his drop dead letter and send them to each of the CCs you owe if they start harassing you. You must send it either return receipt with the USPS or overnight it with either FedEx or UPS. I use FedEx which gets to be fun because you have to get an actual street address from them and not a PO Box. I usually tell them the only way I am sending money is via overnight which requires a street address and they always comply. Also, watch this video:

The last one I had to deal with, was not a CC but a Collection Agency working for a national gym we stopped paying on last April. Just before Christmas the debt of $800.00 went to over $1k. I called and offered them $200, they countered with $480. I said the best I could possibly do was $250 and they said the could not come below $372.57. I told them that was my best offer of the week and if they did not take it, I would call back the following and offer less, she gave me a snotty remark as I hung up. I called 2 weeks later and again offered $200 and they said they could do $250. I had them send me a settlement letter to this effect that they would report the debt as settled. Done.

Thanks for your reply !! I know its extremly risky..its even borderline crazy !! My main Creditors are the big boys..Chase, BofA, Capital One and lastly Discover ( i heard they are hard to settle) but we’ll see what happens..My house will definitley come first..I am so scared for some reason. The luck i’ve been having lately is terrible, and my luck nobody will be willing to settle..and I am current on my payments right now. i am going to call the debt settlement company and tell them to hold off on calling them and sending them letters..hopefully they will know that they need to do that.

2nd Mortgage Charge Off

I have a 2nd mortgage with GreenTree Financial Services. This is at 12.5% interest. I had always paid ahead and last June knew that I would be heading for financial trouble due to husband’s surgery and job loss following. My huisband is on unemployment — collecting about 25% of what he previously brought home. anyhoo.. In may I made June’s payment — in June I called to discuss options for modification or lowering interest rate. I was told that I was not behind and they would not review it if I was on time… so I get behind as I expected to — then they would not talk about modification because I had not made 3 payments in 90 days. This is set to “charge – off” this month. Because this is a 2nd mortgage — does this mean they can foreclose on my house ?? Can anyone point me in a direction to get questions answered. I can not afford a lawyer or to loose my home.

The first rule is to stay in constant communication with your mortgage lender and make sure you document all of your conversations. Keep a written log, along with the paperwork received. Any mail you send to them, send it certified so you have a written record.

For the 2nd mortgage lien holder to complete the foreclosure process, they would need to pay off the first mortgage lien holder. So your first actions, (if not already taken) is to communicate to your first mortgage holder and advise them of the status of the second mortgage. They may offer some solutions in terms of modifying your mortgage.. if the second mortgage holder would accept a reduced pay off…and….. there are many other factors. The bottom line is that you need to talk to them right away to see what assistance they may be able to offer. Again, document everything.

You also need to contact a local non-profit agency that offers free distress mortgage counseling and can provide you with additional information. The last recourse to protect your equity and possibly stay in your home would be filing Bankruptcy. You will need to talk to a lawyer about that option. Most reputable firms will give you at least 10 to 15 minutes of free advice. This should always be your last resort … but based on the aggressiveness of your second mortgage lien holder .. you need to get all the facts… get all the documents and have your Plan A, Plan B, etc. in place.

If at all possible, to protect your credit and ease the stress … consider the possibility of selling your home prior to foreclosure or filing bankruptcy.
Again, document everything.. get good advice…and continue to pray. It really does change things.

I need some advice

First thank you for listening to my story.

I tried reading thru some of the stories to see if any was like mine, a couple are but I just need some advise.
I had 5 cc’s for a total of about 17K all together, I stop paying on all of them around 2008 due to i lost my job and couldnt afford min bal whatsoever so n e way they are now written off.

One collection agency sent me a settlement offer, the original bal was around 6K, and they wanted to settle for 2K, i think this is a great offer due to now i am able to pay back some of what i owe, but my question is, since they sent me a settlement letter, what do i do next, i know i have to reply, but what do i say in the letter, is there any way once i pay can i get it removed from my credit report?

How a credit card acted

I find myself between jobs. i have no debt at the moment, having paid all my credit cards. i was treated strangely by one card by the following situation.they sent a super high value card, with a very high or no limit. it turns out that where i am living, for any use of a card you have to enter a pin number. that makes it be considered like a cash advance, which is subject to a higher interest rate (19% versus 13.5% for regular purchase.) you cannot buy the simplest thing where i am unless you have the pin. so i innocently asked for the pin to be mailed to me, the typical procedure of the past. that put me through to a grilling by a financial employee asking me many questions. since i mentioned i was between jobs, he wanted to know my other assets. i was uncomfortable so i hanged up. when i next looked at the account in the computer, i noticed that my other card with the same institution, which had a limit of about $9,000 now has a limit set at $800. that makes it practicably unusable.

This is very common now. If you are considered a higher risk they cut your limits. I have a friend whose limited were cut so low that had she used the card again she would have gone over her limit and been charged the higher interest fee. I think that the banks are so use to all of us charging everything that now that we are becoming more responsible with our credit they are trying to find other ways to charge us.

When I was in college our bank use to charge a check fee so like twenty five cents per check and a dollar a month for the convience of using checks. I don’t think that things will come to that because of the internet but I think that using the internet might start being charged within the next five years. So yes for now we’re saving on stamps which is putting the post office in financial trouble and flowing down to it’s workers. But I see the banks making money of this in the near future.

We pay off our credit card that we use online every month but I’m watching the statements closly looking for hidden charges.

Personal Finance

Hi everyone,

I am new to the blog. My goals are to create financial freedom for myself by 30. My biggest obstacle to creating financial freedom is controlling my spending habits. I have terrible spending habits. What information is out there to help people who spend without a conscious? I am good at financial planning. I started investing and to protect my money from my bad habits, I set up a ROTH IRA where I put most of my savings so that I don’t have immediate access to it. Thank you.

financial freedomI’d recommend reading the book “Total Money Make Over” by Dave Ramsey. He has some pretty powerful stuff in there. It really turned my hubby and I around. I wonder what you mean by financial freedom if you want to reach it by age 30 and you have not so good spending habits right now. If I can understand that better I might be able to give better suggestions.

In the meanwhile that Ramsey book is a good start but the immediate solution to control your spending habits is to put yourself on a budget. Create one and then follow it along as the month goes by. Once you begin tracking where your day to day money goes you’ll be able to control it better. And the way to do that is to create not just a budget but one that you can keep updated frequently.

To me, financial freedom means that you are generating enough income from investments to cover your living expenses. That is, you no longer have to work. If you can get there by age 30, you are doing well.

I believe that one of the best ways to get financial free is by buying stock in quality companies and keeping them for the long run. Stocks like Chevron, Apple and Berkshire Hathaway come to my mind. Another thing, I would consider, but it is not something I have done, is to buy investment real estate.

At the same time, financial freedom means something different for each person.  To me right now it means being able to pay my bills and feed my kids and sticking to my very limited budget.  I have a 401k at work so hopefully when retirement comes I’ll be okay.  Got a holiday saver account that will give me cash for Christmas shopping.  Put some of my tax refund into a CD that will mature next August so I can take my kids to an amusement park and stay in a hotel instead of making the long drive there and back the same day.  I can go to bed at night and not worry about how the bills will get paid, what my kids are going to eat tomorrow, or if we’ll be able to have any kind of vacation this coming summer.  For right now at this time of my life this is my financial freedom.

To someone financial freedom means:

  • Being able to provide my children with the best education that money can buy K-12 such as private tutors, homeschooling, or great private schools
  • Being able to choose to stay home without having to worry about surviving on one income
  • Being able to travel extensively with my kids without having to worry about money
  • Having absolutely no debt: No mortgage, no car note, NOTHING
  • Being able to invest in several charitable projects in Africa that build the infrastructure of the community: I would love to build educational institutions in Africa that improve the intellectual resources of the community
  • Having several properties in New York, Amsterdam, Paris, and two homes in Uganda

New to this game, how do you play?

Howdy. This is all new to me and while I know many of options out there, how do I determine whats right for our family?

Nutshell: DH is a carpenter. Out of work since 11/08. I was laid off 3/09. On unemployement and savings/credit cards we had been actually doing quite well (not much on cards, not late on anything)
until 12/09. We re-fi’d last year and it helped a bit but we didnt qualify for the loan modification because DH’s unemployment is ending soon.

We have been hit with some financial setbacks that have caused us to at this point miss two mortgage payments. ( oh and the taxes went up so mort is now $300 more out of our reach a month)
and DH finally found a steady job (yeay!)

But.. with the mounting debts, higher mortgage, and much lower income, there is no way we can make it. (in the hole $400 each month and we have run out of savings and room on credit cards)

We could ditch the house and that would help alot but if we are going to trash our credit, is there any incentive to NOT also file bankruptcy? Even with the loan modification its not enough we would have to do that and Bankruptcy to stay in the house and afford it.

on the flip side if we only file bankruptcy its not enough to make our budget balance (we dont owe much on cards thankfully)

and we did the math.. the cost of a rental where we need to live and filing bankruptcy would allow us to save almost $900 a month!!! (based on what we are making now)

I have never known anyone to do this (that is still alive) so I have no idea how to navigate the options.

any input is appreciated!

Any advise on consolidating?

I’v been looking into doing “debt consolidating” I have about 3000.00 in collections and another 3000.00 that i pay on time in CC and such that i want to clean up. Has anyone had any experiance with debt consolidating, or have any advise?

Unless you are willing to cut all credit cards and swear to never use credit again and can keep that oath, DO NOT DO IT!!!!!!!! Let the voice of other’s experience talk to you. You will find yourself having consolidated your current debt into one nice, neat, little payment and start thinking, hey – I can buy that on credit. Next thing you know, you are back in the same boat, only there is more water inside the boat this time! The only way to do it is to get rid of the credit cards.  I had over 16,000 in credit card debt and went through a credit counceling place and with that those cards are closed and you can’t have a card through them again.

You just don’t have a lot of debt (although I’m sure it feels like you’re completely under water). You can totally do this on your own. To that end, you’re better off NOT consolidating. It will make your credit even worse because the first thing they advise you to do is stop making your payments. You have a couple of good options though.

1) Keep on keepin’ on with your current payments.
2) Call the collections co and ask to settle for a lower amount. This will only work if you have cash stored up to give them.
3) Call your credit card co and tell them that you’re in hardship. Ask for a lower rate.
4) Take out a personal loan from a credit union or an online place to consolidate gracefully.

I’m assuming that you’ve destroyed the credit card so you aren’t still using it.
Right? :)

The good news is that you’re in charge at this point. The collections stuff has already hit your credit report so it’s not like you’re trying to prevent them from reporting. Use this power to your advantage. You’d be surprised how much you can do on your own. Google things like “work with credit card companies” or “how to settle a collection” and you’ll get some good advice.

I personally do not use any of my credit cards anymore, and my two bigger balance ones iv called and had the interest rates lowered.  It just seems like I don’t get anywhere even paying much more than the minimum.  I’m just trying to get my stuff straightened out the right way.

Spouse being persued for part of debt?

Hi, I am a newbie. I’m going thru a bankruptsy in OR, and the legal aid group asked for my x spouse’s details, age, name, etc..they sound like they are going to go after him. I’m going to do the full on request for hardship around college loans if I possibly can and the only thing I can think of is they could go after him for part of the interest that accrued on them during our marriage, has anyone experience with any of this? Or could they go back over the divorce paperwork and go after him if they think it wasn’t fair. He apparently just wanted a green card, and left me in very very poor straights during the divorce, I negotiated with his lawyer, I was so poor and got only 2 grand and made him take his credit card debt from very man restaurants(excessive purchases of food to impress others as well).

I have no answers for you. All I know is that in my own divorce my ex accepted full, sole responsibility for a vehicle we’d bought during the marriage. He stopped paying for it and the people that held the debt garnished my wages. The only way I can stop paying for his van is to declare bankruptcy but right now this is my only real debt. But the judge set a monthly payment, which beats the weekly garnishments. The van was bought during the marriage and both our names were on the original purchase papers. No clue if this will help but this is my experience. Oh, and I’m in Michigan.

I also have a question for all of you. I am a stay at home mom and my spouse works full time. Id like to find a way to bring a little xtra money into our home. I have a bshs degree, and can do just about anything. Does anyone have any ideas or know of any jobs that can be done from home. I don’t want to pay to get a job only to have it not make anything. Everything I look up is a scam. Any and all ideas would be appreciated.

Yet Another Collection Agency Question

Is there anyone out there dealing with Central Financial Control collection agency? They’re located in Anaheim, CA. I’m having the worse experience with this collection agency. I researched this collection agency on (Better Business Bureau) and they have an “F” rating.

I had an outstanding medical bill that I thought was paid by my insurance. I later found out I was responsible for this payment. I received an invoice saying I owe $700. I sent my credit card information with the invoice back to the collection agency for payment in full. Months went by and I received a letter saying, I was reported to the credit bureau. I started to research and discovered the collection agency never charged my credit card. Maybe my payment got lost in the mail. Anyways, I contact the collection agency by letter.

I told them what happened. In my letter I stated I will pay the balance only if they remove the negative item from my credit report. It’s been over 30 days, so I contact them by phone. I spoke to a representative and she stated that she received my letter and because I called she will rush the process. It’s been about 3 weeks and I have not heard anything. Have anyone else experience? What should I do now? Any suggestion?




I have no love for collection agengys,you have to legal right o tell them not to contact you anymore. My question is how can you not notice a 700$ charge not showing up on your credit card a 7$ charge not eing noticed but not a 700$ one the fault is as much yours as there. Never just assume anything that letter probley got lost at some point in the chain, probley by our postal service. It’s possible. When you make a payment with a credit card it takes weeks before you receive your next statement. So weeks went by and by that time the collection agency had already sent a letter to my home. I never ever had problems with lost mail. To be honest I think someone in the collection agency misplaced my payment. As I stated in my original email, this particular collection agency has a poor business rating according to the Better Business Bureau. So I wouldn’t be surprise if some incompetent employee misplaced my payment.

Always send letters to collection angencies by registered mail. That way they have to sign for it. Also too, I understand that you can contact the credit bureau and ask them to validate the debt. If they do not respond in 30 days, the credit bureau must take it off your report.


Success Story Of The Month – Family First Mortgage

home-mortgageBetween all the ads and information, sometimes it’s nice to share some of what we do! If you have a sucess story, or a better one.. LET’s HEAR IT!!!


Mr. & Mrs. S. of Murfreesboro, TN came to us from a realtor seeking a guaranteed payday loan to buy a new home because they were planning on walking away from their current home due to the following. They were paying OVER $1600/month on 3 liens and the 2nd lien had a $600/mo payment with a rate of 16% and they were 30 days late on the 2nd at the time of application. Believing they had no other options they were willing to give the house away or let it go into foreclosure if we could help them buy another.

Added to this:

  1. They filed CH7 Bankruptcy 2 years prior
  2. Mrs. S. currently has a life threatening illness, which reduced her income to a small disability payment.
  3. At the time of application, Mr. S. was temporarily out of work on disability, due to an injury which reduced his qualifying income to ½ his normal monthly income.
  4. Credit score was 565 mid, at the start and dropped to 535.
  5. The 2nd mortgage rating went from 1×30 to 1×60


  1. Convinced our client that we could help them & not to walk away from their home.
  2. Qualified them for 100% financing in a cash-out refinance
  3. Negotiated a reduced payoff with the 2nd mortgage holder
  4. Secured a fixed rate that was lower than their advertised rate with out investor
  5. Secured 100% financing despite the 535 mid score and 1×60 late on the 2nd mortgage, either of which automatically disqualified them for 100% financing
  6. Saved them over $600/month in their mortgage payment & paid off every debt they had
  7. Provided them with $3000 in cash back at the loan closing
  8. Setup the 1st mortgage payment so that they got to keep over $3000 that would have gone to mortgage payments.
  9. Got a REAL BIG HUG from a good ole’ boy from Tennessee at the closing
  10. Charged them less than 2% in total broker fees for our services

When we say No Is Never an Option.. .WE MEAN IT and WE DELIVER!!