I SETTLED ANOTHER CREDIT CARD ACCOUNT
Read-on to hear how I did it and learn some new
techniques that may help you in your own settlement negotiations
If you’ve ever put your email address into a website, you have probably noticed that you get follow-up emails every day continuing to pitch you products and services.
Conversely, you don’t hear from me very often. My last set of emails was in July and August to tell you about “The Do-It-Yourself Bailout” Seminar in Los Angeles.
The reason I write to you so infrequently is that I like to have something new to say. Today, I am writing to tell you that I SETTLED ANOTHER CREDIT CARD ACCOUNT.
In “The Do-It-Yourself Bailout” I tell the story of how I settled five of my seven credit card accounts. At the time of writing, I still had two open accounts, “Yellow Bank” with a $17,500 balance and “White Bank” with a $12,500 balance. With added interest during the months I was not making payments, the balances increased to $22,500 and $15,000 respectively.
Last Friday, I settled the Yellow Bank account for only 22%. That’s right, 22%!
If you’re still working on settling your own credit card accounts, read on because there is new information here based on experiences I’ve had since writing the book. Much of this new information will be expanded in a second printing of the book, but as a reader of “The Do-It-Yourself Bailout” I’m sharing it with you first.
For many months, Yellow bank was offering to settle for 40%, or about $8000 when the balance of the account was around $20,000. I didn’t have $8000 and was offering $5000, which they consistently refused with the patent answer, “we have never gone that low and never will.” At the time, a $5000 settlement would have been 25% of the current balance.
After about six months the account went into charge-off and I began speaking with a collection agent working on behalf of the bank. The balance had increased to its current level and 40% was now $9000. I still offered the $5000 and they still refused.
Over the next few weeks, the collection agent called three or four times a week. Sometimes I would speak to him. Others I would not. In all, the conversations were the same. They offered 40%. I offered $5000.
Just last Thursday, as I was out looking for a Halloween costume, I had something very new happen. Usually, whenever a collection agent would call me and leave a message, the message would never contain details. They would leave their name, company and phone number and ask me to return the call. That was it. This time, he actually left a message saying he had “good news.” It occurred to me that it might just be a ploy to get me to return his call. In the end, I figured if it was a ploy, we’d just have the same conversation and leave it at that. I might as well see if he really did have good news.
I phoned back and, sure enough, he said he got approval from the bank to accept my $5000 offer. A 22% settlement.
Of course, you know what I asked for next. A settlement agreement in writing. It was already Thursday afternoon, October 29, and he said the one condition of this settlement was that I had to make the payment during October so it could go on the bank’s books for the month.
I said that if they could get me the letter that day, I could overnight a certified check. Or, if they got me the letter the next day (Friday, October 30), I could do a wire transfer.
The letter came in at 8:15 a.m. on Friday morning, but there was a catch. They said they needed the payment by 11 a.m. Central Standard Time, which is 9 a.m. Pacific Standard Time where I am. I said it would be impossible. I couldn’t do a wire transfer until my bank opened at 9 a.m., which would be past their deadline. They suggested doing a check-by-phone. I had never done a check-by-phone before and, frankly, I didn’t feel comfortable giving a collection agent my primary bank account number with nothing more than a phone authorization to make a withdrawal. I wanted to move the $5000 into a temporary account, and I had to go into my bank to do it.
They then launched into the “sell” again. This offer is only good today. On Monday it will be 40% again. Etc. etc.
There was a lot of pressure here and I knew they were trying to get me emotionally off balance so I would make the check-by-phone payment right then and they would get their money while I was still on the phone and not give me the chance to back out.
I wasn’t having it. I said, “what if I wanted to send this settlement agreement to my attorney to look over before making payment? He doesn’t get into his office until after 9 a.m. Would you tell me that I had to send in a payment on a business deal without the benefit of having my attorney look over the documents? I’m sorry,” I said. “I’m ready, willing and able to make this payment, but I do not like receiving a letter at 8:15 a.m. and hearing that I must make a payment inside of 45 minutes before the start of business, when my bank isn’t open, my attorney isn’t available, and that if I don’t comply the deal is dead. It’s a red flag for me and I’m not going to fall to the pressure.”
So they did! The collection agent put a manager on the phone who said, “let me call the bank and see if I can extend the deadline.” And guess what? I got two extra hours, which allowed me to go to my bank, move the money between accounts, satisfy my concerns about a check-by-phone payment, and close the deal on my terms without fear or anxiety.
Now I can say that I have reduced my credit card debt from $212,000 to $15,000 and saved almost $133,000!
I hope “The Do-It-Yourself Bailout” has been working for you, both in your actual settlement negotiations, and in releasing yourself from the pain, fear and stress of debt.
