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How successful are debt settlements with major banks? Can the creditor still go after assets(car,bank accts)?

Glendale, CA |

I talked to an attorney for a debt settlement with a major bank on a large balance that I am behind on payments. I recently closed down my personal checking, savings, CD accounts with them and haven't reopened anywhere yet. I have another small credit card with the same bank that I have been on time. I have had health problems that set me back. This bank had given me no interest offer for a year and the reset rate is very high. I asked them for help with reducing the payments and they said no. Credit counseling was not helpful since I still couldn't afford the schedule they gave me. My husband works and living on his income. I am an agent with no income in the last year. I don't want to file BK. I feel responsible and would like to pay a portion of the balance off. Will they be difficult?

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Attorney answers 3

Posted

In my view, bankruptcy is often the alternative, when all else fails to derive an affordable result, such as settlement. If you were to stop paying on this debt, it is likely that they or a debt collection agency will call you and someday sue you in court. However, as my blog posting below states, a judgment against you is NOT inevitable, and there will be plenty of opportunities to consider a settlement, even after a debt collection lawsuit has been filed. My website has so much info on options and explains the process of being sued on an unpaid debt, that it is not the "end of the world" for you. If you want to settle for less and have a hardship, I would start with a call to the company and explain the situation, to see if they will settle for less and close out your account.

Robert Stempler (please see DISCLAIMER below)
www.StopCollectionLawsuits.com
Twitter: @RStempler

NOTICE: The above statements are provided for general information purposes only and are not intended as legal advice or advice of any sort for a specific case or legal matter. If you do not have a signed attorney-client fee agreement with the Consumer Law Office of Robert Stempler, APLC ("the Firm"), then until such written fee agreement is provided and signed by both a prospective client and attorney for a particular case, neither Mr. Stempler nor the Firm will represent you nor will they be your attorney in any matter and you remain responsible for retaining your own attorney and for compliance with any and all deadlines and for any statutes of limitations that may pertain to potential claims. Comments made on a public forum, such as Avvo.com, to not have any confidentiality because others may read them. If you desire a private consultation with Mr. Stempler that is confidential, please go to www.StopCollectionLawsuits.com and submit a free eCase Review.

Posted

We handle debt settlements with major banks on a daily basis. Simply because you were personally not successful at it does not mean banks do not settle. To answer your other question, there are usually two ways a creditor can go after your assets: 1) if you have a bank account with that creditor, they can reach into that account to take money out to satisfy the debt; or, 2) if they get a judgment against you that they can then enforce against you to go after your assets (which means they have sued you and you didn't respond or lost at trial and then a judgment is entered against you.) The best way to try to settle the debt is to talk to a debt settlement attorney who can help negotiate a reduction in the debt and work out a payment plan that you can afford. It is better to deal with the issue now, rather than wait until you get sued.

Asker

Posted

Thank you for your replies. After closing down my accounts with this major bank, I have decided not to deal with bank accounts for a while. Unless, they check what I used to have in my account, and sue me on that, I no longer have any funds that they can garnish. I want to do a debt settlement but worried about the expenses and later being sued and pay an attorney for it too. Vivian, your company handling this on a daily basis, how successful would you say this is?

Vivian Ming Lum

Vivian Ming Lum

Posted

I am not entirely sure to what you are referring when you ask "how successful would you say this is." If you are sued on the debt, then you must respond to the lawsuit. If you don't, they can garnish your wages once they get a judgment against you (not just the bank accounts). You should get a free initial consultation to determine your options now. We can usually get a better settlement before the client has been sued. Plus, it will save you the costs of having to defend against a lawsuit and incur those additional court costs. If you settle now, you would be avoiding a future lawsuit.

Asker

Posted

Thank you and I may be in touch with you. I am now 3 months past due on the credit card and received an email from them asking me to call them by June 29. I am worried about calling them in case I give them the wrong information and it wil most probably be recorded. I am still paying my other 3 credit cards on time since the minimums are affordable. Do you require a trust fund for the debt settlement? If I have the funds to settle right away, could this be done fast?

Vivian Ming Lum

Vivian Ming Lum

Posted

You are correct in not wanting to talk to them. If you happen to get stuck on the phone with them, do not give them any information about yourself. They are just fishing for information to use against you. Please contact me offline at either 310-564-0999 or vivian.lum@mccarthylawyer.com so I can address your other questions.

Posted

I would strongly advise against using a debt settlement company. Often, you will end up in a worse position than when you started. Program fees are often front-loaded, meaning your money won't even go towards settling you debt until the fees are paid first. If you absolutely must go with a debt settlement firm, rather than BK, find one that will only take their fees AFTER your account is settled. Otherwise, try calling a few more times. Sometimes, it takes a different representative, on a different day, to provide you the assistance you need.

Asker

Posted

Daniel Tam, thank you for your reply. I talked to an Attorney on Friday after looking at my paperwork, he said I couldn't qualify for the Chapter 7 because of my husband's income. He recommended Chapter 13 but I don't want to commit myself to 5 years of $1450 payment a month. I can't afford this now and it would be a long road ahead. The other Attorney asked for a $750 retainer fee to start working on the debt settlement case with only the one credit card that I'm behind. He said the final charge will depend on how long it takes to negotiate. So, should I call the credit card company again, BofA, and see if they will settle directly with me since now I'm over 90 days past due? Also, I received a letter from them asking me to call them before June 29. What does this date mean? Is this a scare tactic from them?

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