Credit card debt settlement

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Credit card debt settlement

Postby John2447 » Sat Jan 10, 2015 5:07 pm

I have contacted by Debt Settlement Company to settle my credit cards debt of about $65K from 4 credit cards. Debt settlement company has assured me for settlement for 60% of total debt. Currently, I am paying minimum and none of them i am paying any penny for interest. All these debts are through balance transfer with 0% APR promotion offer expiring from next 6 months to 15 months. It is surely very high debt for me. My credit score is about 725 and FICO score about 685. I have never defaulted and I don't have any negatives on my credit score. I don't have good ideal what should I do.

Offer from Debt settlement company is
I will deposit money some pre fixed money into FDIC insured institution every month into ESCROW account owned my me.
They will settle my debt in less than 60% for sure. Though nothing in written.
They will not charge me any fee to settle this debt.
They have provided me Address and phone number which they asked me to change so Creditors don't bother me and all communication will be directed to Debt settlement company.
I am prepared to settle this whole debt with lump sump money if settled under $40K within 6 months which company is saying they will negotiate it for me.

Please advise me negative side of this offer which might damage me. I have read a few posts and they say that this deal might damage my credit score by 60 to 100 points.
But I am not looking to buy any costly thing in next one year.

Second question how it would impact my credit score once credit cards are fully paid off within 6 months on negotiated deal with card companies? If there is negative entry for how long this would appear on my credit profile.

Would it impact my job search? I have high profile contract job with more than $150K/year income and next few years. I am just stuck for time being in bad situation.

Your sincere contribution at the earliest will be highly appreciated.

Thanks a lot in advance.


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Postby lobbythis » Sat Jan 10, 2015 10:11 pm


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Postby ingramjuan » Sat Jan 10, 2015 11:13 pm

Not knowing all the facts, but based on the information written this seems like a scam?, however if not I would suggest getting an attorney to review the fine print.
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Postby takeshi » Mon Jan 12, 2015 10:05 am

John2447 wrote:If there is negative entry for how long this would appear on my credit profile.

IIRC typically 7 years.

John2447 wrote:Would it impact my job search?

Possibly. Some employers do credit checks but not all do.

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Postby Vattené » Mon Jan 12, 2015 2:42 pm

My gut reaction to this also makes me wonder if it is a scam. Sorry I can't be much help, but I would strongly urge you to at least get absolutely everything in writting about this deal before taking one step further.

What exactly do you mean when you say you have no negatives on your credit? I would take this to mean that you haven't filed bankruptcy, no account has ever been charged off or sent to collections, AND you've never even been late on any payments (even as little as 30 days late). If any of those are true, then it would show up on your credit report. Have you recently gotten your credit reports (true, full reports from, not anything else from any other source - even going directly through a credit reporting agency, they are more interested in selling you some score than providing the full, free credit report {which has no score} to which you are legally entitled)? You should look at reports from each of the three bureaus - Equifax, Experian, and TransUnion - as each keeps their own report on you. Doing so will let you know for sure if there is anything negative (or inaccurate) on your file.

I may be misunderstanding your OP, but something isn't adding up. It just makes me skeptical that you would be getting an offer to pay a percentage of what you owe from a "debt settlement company" when I am lead to believe from your OP that all of this $65K is from credit cards that are open and in good standing. Is that the case, or is this from debt that has been charged off and sold to collection companies? If it is the former, the credit card companies still own this current, in-good-standing debt and no other company has any legal right to it (this is definitely a scam). If it is the latter, then you've racked up credit card debt in the past and the credit card companies have written it off and sold it for someone else to try to collect on (in which case your credit profile should have negative marks on it). You may be dealing with a legitimate debt collector, but you should still be VERY careful in how you proceed because they are notoriously sketchy. Many don't follow the law, you could get harrassing calls after you think everything is settled, and banks have even been known to sell off bad debt to multiple collectors, so different people are trying to collect on the same thing. To the extent we can help you, more information would be beneficial.
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