I have pretty significant (for me anyway) credit card balances due to an illness relapse from MS. I am getting on top of it and will be working with a non-profit that helps reduce credit card fees / percentages.
However, when I spoke to a lawyer, they said that I could pay him to negotiate the balances. In doing some research on that process, I found it was something I could do myself. It sounds like they won't reduce the amount owed without you relapsing on payments but waiting a month or so after a missed payment they might negotiate. I know that they will close the card after I pay whatever is negotiated and that it would negatively affect my credit score. I am not worried about that because I have my home and my vehicle. My credit score was higher than 800 before the relapse and has dropped because of overall amount owed. My thoughts are I could try to negotiate the high balances cards (we're looking at a couple at $10,000) and those can close out and I will pay off outright any cards I want to hold on to. I have a home equity loan from my bank I have never touched that could help with those payoffs.
I want to ask if anyone has had success in negotiating down credit card balances and if so, how the process went for them.
Thank you in advance.
EDIT: It was asked what my credit score is. Now it is sitting around 725 I think TransUnion.
Success with negotiating credit card balances?
byu/Nebrix inCreditCards
Posted by Nebrix
2 Comments
> It sounds like they won’t reduce the amount owed
Correct, they likely won’t arbitrarily reduce your balance when you’re not in default. You can (and should) negotiate a hardship repayment plan, though.
> I know that they will close the card after I pay whatever is negotiated and that it would negatively affect my credit score
The act of closing a paid-off card won’t in-and-of-itself impact your credit, assuming it was in good standing. The defaulting on payments in the first place and the subsequent derogatory marks that last 7 years on your credit report will sure tank things.
> has dropped because of overall amount owed
It’s dropped because of high utilization, which resets every month with the “standard” FICO scoring. If you hypothetically pay your balance off today, your score would completely rebound next month and it would be as if nothing happened.
> My thoughts are I could try to negotiate the high balances cards
So your plan is to miss payments intentionally and suffer the long term credit hit for the *chance* that they would negotiate your balance? There’s no guarantee that they’ll do that, and there’s no guarantee that they won’t just sue you instead and garnish your wages.
>It sounds like they won’t reduce the amount owed without you relapsing on payments but waiting a month or so after a missed payment they might negotiate.
That’s unlikely. People who miss a single payment often still repay in full.