Hello,

I recently joined the above company to try and get my credit card debt under control. I owe abot 25K in credit card debt and can barely make the minimum payments. I have been a member since June and part of the program is to stop making payments and use these delinquent payments as leverage to reach a settlement. How likely is it that they will sue me and how long does a CC company usually wait to do that?

Any help would be greatly appreciated.

Fr_Chuck

I would say that not paying to try and reach a better settlement is first destroying your credit even worst, and at that large of debt, esp if you have a job, you can consider they will sue if they think they can garnish your wages, instead of taking a lower settlement.
And normally the lower settlements only work if you can pay the balance in full, not payments.

I would say that I have issues with this sort of company and arrangement

Creditproblem

Thanks for the response. I agree that it will and has ruined my credit but I was already missing payments or just barely paying the minimum. Do you know how long it takes before an attempt to garnish my wages typically takes?

I am currently making payments to the consolidation company but just not the amount I would have been paying to the CC company. After making the payment the money is then held in account in my name. When I have enough in my account, the consolidation company will then use this money to negotiate a settlement.

DrJizzle

First of all, good settlement companies work. Most likely, the payments you are making are not being given to your creditors. They are being saved in an account until they reach enough to pay off a settlement in full.

Your credit may be taking a slight hit, but if you were already falling behind, the damage was most likely already done. And once you have completed the program, your credit will likley be better off than it was before. (I have numerous case studies to show how just completing a settlement program has raised clients scores anywhere from 20 to 120 points).

As for getting sued, its hard to say. Who are your creditors & how much is owed to each? What state do you live in? Are you an employee or self-employed? Are you a home owner? How long of a program did you sign up for?

Creditproblem

thanks again for your honesty.

I think my credit has been reduced by 100 pts since defaulting in june........

You are 100% correct on the payments, they are going into a special purpose account in my name at a bank until I have enough money in them.
I owe 20K to Citi and 5K to Chase
I am an employee in Mass. and rent.

The program is for 36 months but hopefully only 24.

DrJizzle

Ouch... that wasnt what I was hoping to hear.

This is a problem with MANY of the settlement companies out there: Unrealistic programs.

I would advise to find a way... SOME way... ANY way.... to fund that account FAST.

You dont want to **** around with CitiBank. Or MBNA or Dsicover for that matter. These creditors will still settle but they are going to demand a higher settlement and they just arent going to wait that long for their money.

You have 80% of your debt with Citi. A 24-month program (let alone a 36-MONTH program) is not going to work. The companies I work with would not even take you on as a client for anything more than a 12 month program.

I would advise you start looking hard for about $12K to put in that account ASAP.

Shame on Superior Debt Services for even signing you up in that long of a program. You see, that non-refundable retainer you are paying right now... if you have to drop out of the program, you dont get that back. Most of these companies just dont care.

Do they have any guarantees? Not that it will help keep you from getting sued but how much of your money will you get back if they settle for 100% to keep you out of a judgment - called a stip (stipulated payment).

Creditproblem

not sure about any guarantees. Do you think Citi would be willing to wait if I had my rep from SDS give them a ring to let them know we are working on getting them some money?

DrJizzle

No, not likely. They are very aware of settlement companies and would most likely attempt to drive a wedge between you and SDS. With Citi, companies will usually wait to talk/deal with the collection agencies because Citi is rather unreasonable.

There really isnt a way around them. You just have to play by their rules. Do what you can to fund your account as quicly as possible.

(Im not saying you will get sued... sometimes people make it thru that long without getting sued, but the statistics are against you)

Creditproblem

thanks for the info.

Just so I understand this correctly. Citi has a collection agency obatain there money after a certain time frame? How long does it take before an account goes into collection?

DrJizzle

Most all creditors do. Usually, this will not happen until about 6 months from the last paymen when they discharge the account. However, I have seen Citi move an account into collections as soon as 3 months.