Question I live in Massachusetts, am unemployed and owe $40,000 on 4 credit cards plus a personal loan. I haven't made any payments in 2 months. I own a condo worth $240,000 and owe $60,000 on the mortgage. I have some money in the bank and just got a large credit line against my condo.
Question: How do I best pay off the credit cards - can I get discounts for paying them off? Do I call and make an offer or wait for them to sue me and make an offer on the resulting judgment? My understanding is that people pay off judgments at a big discount. Should I have someone represent me?
Charlie
Answer Charlie,
Your credit card companies will most likely not give you a discount for offering to pay them off. Unless you explain you employment situation and since you haven't paid them in 2 months they might want to settle for less. It really depends what banks you are working with.
There is a company that I use to work with that can negotiate for you to settle with the creditors. Check their website www.freedomdebtrelief.com
using a debt settlement company will save you a lot of money since they constantly make deals with the creditors and have better leverage.
I don't recommend waiting for the creditors to sue you. Especially since you have good equity in your house, even though your debt is unsecured you just never know how it might turn out. Of course in the worst case you will have to pay 100% plus interest and penalties from the time you stopped paying them.
