Guess where I am?
Guess where I am?
Thank you to the Avalon Shores family for always using red solo cups to enhance our holiday spirit.
In my last post I alluded to how the banks are used to us sub-par credit rating consumers and how we can now get access to credit products; like the “Holiday Loans” offering. Let’s talk now about getting out from under delinquent debt without paying someone to do it for you. This is for those who are already delinquent and unable to pay the monthly payments or the balance. I do not promote intentionally not paying your debts.
Believe if or not, banks are very used to taking less than the balance owed, “settlements”, on debts. Think $.20 on the dollar, or said another way “you owe $4,000 and they accept $800 “. And NO, please do not pay someone to do this for you like a credit counseling service or attorney or anyone else that wants to charge you. It is absolutely, 100% free to do this yourself.
If your accounts are already delinquent and you are unable to pay them going forward give the bank a call and discuss your situation letting them know you are unable to pay. Depending on how delinquent the payments are, the bank may offer you a settlement if you can pay a portion of the balance within a few days. Usually before the end of the calendar month as that is when accounts age to the next month of delinquency. Typically, the first offer they make you is not their best offer so never, never, never, and I do mean NEVER take the first offer from the bank. I don’t care if it takes a lengthy phone call of back and forth or what they tell you; they can ALWAYS go lower. Keep that in mind as you begin the negotiating.
If the account has been sent out to a collection agency on behalf of the bank, the same rules apply. They will typically offer you a settlement right off the bat in a collection letter. Again, never take the first offer. You are already in collections and your credit score is being affected, so the least you should try to do is make the credit score ding worth something.
There are certain tax implications of settling your accounts. You will be required to pay unearned income taxes on any amount over $600 that was written off on that year’s taxes so keep that in mind as well.
I have helped and guided many people through this process so if you are interested in learning more please send me an email, I will be happy to help in any way I can.
This post does not take the place of paid financial advice, and it is intended only as a personal experience.
Thanks for reading,
Adventures in SoCo is a blog for those living in and around Southern Anne Arundel county. It IS a different world down here.
Happy Holidays to everyone!!! This is my first blog post and I hope folks will enjoy it and take something from it.
So I saw a sign the day before Christmas at a bank offering “Holiday Loans”. I ask why anyone would take a loan out for gifts that probably are not necessary…nice to have but not necessary..to go further into debt to the banks and finance companies out there. I realize it is social convention to give gifts, but if you need to take out a loan to do it, I for one would rather just be given a thoughtful card.
Let me start off by stating I have been guilty of this for the last 20 years at least, however there has been a shift in my thinking. I no longer subscribe to that line of thinking, and yes I still give gifts that are useful and wanted, at least that’s what my family and friends tell me.
This brings me to outstanding credit card debt. Many of us have at least 6-8 credit cards in our wallets, not a new fact. But what about those of us who are behind in those debts and facing collection calls and letters to no end and charged off ratings on our credit report…Oh no, not the dreaded credit report that is supposed to scare us all to death. Let me be the first person out there to tell you it is NOT the end of the world if your credit score is sub-par, just ask someone like me who has a sub-par rating. This after spending 25 years managing collection call centers for banks.
We are staring at the 8th year since the housing bubble and the economic downturn, so that means banks are used to sub-par credit and they are more used to seeing recent bankruptcies and foreclosures and charged off credit cards. There are now so many of us now with sub-par credit that they have created financial products for folks like us. Remember, banks are businesses and to stay in business they must make loans and offer credit. So we are now such a large group they can no longer avoid us.