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Credit Card Settlement - Guidance for negotiation on acceptable amount (% to principal or balance owed)

Morgan Hill, CA |

Addressing a lawsuit re credit card debt (2nd/3rd debt buyer). No employment income at the moment and would qualify for a BK Ch7. However, trying best efforts to produce a little amount and would like to get a feed from negotiation experts on the lowest % acceptable out there. One credit card company accepted a 10% to principal settlement in the past. However, I am now dealing with a debt buyer who won't accept 10%. Would appreciate some guidance moving forward. Thank you.

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Attorney answers 5

Best Answer
Posted

Hi,
If I were in your position, I would file an answer including affirmative defenses and possibly counterclaims as in my experience this will stop most lawsuits from proceeding. The collection agency's lawyers are usually in the business of getting default judgments and have no interest in litigating these types of lawsuits with pro-Se defendants. I would demand to depose the debt buyer's officers as they will try to avoid this at all costs. Then you can probably do a low settlement to get rid of the case. I would also negotiate to have the account stricken from your credit reports as part of the settlement. Good luck. You can contact me if you have additional questions.

My response does not constitute legal advice and we do not have an attorney/client relationship. You may contact me for more information at 845-290-9678 or at dkatz@dkatzlaw.com.

David M. Katz

David M. Katz

Posted

More directly, I would consider a 20% settlement decent in most circumstances.

Asker

Posted

Hello Mr. Katz, I like your approach and just wondering about the "hows" of the approach. Could you help give specifics, ie. how to depose the officers, counterclaims, and any other relevant info? I filed Answer to a previous lawsuit sometime May this year, then found a pro-bono lawyer who negotiated on my behalf. I was just wondering if you know someone licensed in CA who could guide me in replicating your approach (with reasonable charge for low-income families like myself. Thank you.

David M. Katz

David M. Katz

Posted

I have no contacts in California regarding debt settlement.

Posted

There is no set amount or "guidance" to offer - they may not be willing to settle at all. Given your situation, if I were on the other side, I'd be curious - you have no income, yet you can come up with a sum of money to pay off a percentage of the debt you owe? I'd be suspicious. That said, you can always make an offer and see what they'll do.

We can be reached at 507.334.0155. Our web address is: www. corbin-law-office.com. Answers on Avvo are not to be considered a response to a specific legal issue in a specific jurisdiction - they are to be considered only general responses to hypothetical scenarios posed by the questioner. For specific legal advice, please consult with a licensed attorney in your jurisdiction. No information contained herein should be construed as a solicitation for business, an offer to perform legal services in any jurisdiction in which the attorneys of Corbin Law Office are not licensed, or the dissemination of legal advice. No creation of an attorney-client relationship should be assumed or implied. We are a debt relief agency. Corbin Law Office helps people file for bankruptcy relief under the bankruptcy code.

Posted

I agree with the prior comment. Companies are all over the place as far as what their internal policies will allow them to settle for. Some would rather write everything off rather than settle for a small amount. It sounds like you are trying to avoid a Chater 7. However, from a credit score perspective one year from now, your credit score will be in a better place if you discharge the debt now and close the issue, rather than leaving the issue open and unresolved. Many times a person's credit score is higher a year after bankruptcy than before they filed bankruptcy. It may be the best option to hire a very affordable Bankruptcy attorney.

Information I provide in this forum is not legal advice. The information provided is only general information that may or may not apply to you and may or may not be based on current law. I am NOT YOUR attorney. For specific legal advice you need to contact an attorney and enter into a retainer with that attorney.

Asker

Posted

Thank you, your advice is very helpful. I will definitely consider BK option.

John Ryan Charles Burt

John Ryan Charles Burt

Posted

No problem and good luck. If you need more information, you are free to contact any attorney that responds to your questions for a free consultation. John Burt john@inhouseattorneys.com 949-705-6612

Posted

it depends on many factors (debt buyer, amount owed, any positive facts re provability of case, whether debtor has lawyer!!!! and whether they are aggressive, collectibility, time of the month, etc.)

You really should talk to a collection defense attorney. I handle these cases all the time. You need to defend the lawsuit and avoid being held in default.

Kevin Sullivan
'415-441-1052

Posted

Have you thoroughly explored the bankruptcy option with an attorney? Do you have significant other debts apart from this one? While bankruptcy is certainly not always the best option, particularly if you have substantial non-retirement assets, it would make sense to contact an experienced debtor's attorney to review the pros and cons given your situation. Many seem to believe their credit will be forever ruined or that seeking bankruptcy protection is somehow shameful. Walt Disney filed bankruptcy, and American Airlines certainly does not feel ashamed of having sought bankruptcy protection.

This comment is offered as general information only and does not create an attorney-client relationship.