opinions on debt negotiation ?

Edwards Finance > Debt Management

Q. I have been researching on options for debt and have been finding the info here very helpful. I guess you can say I would be a prime candidate for BK as I have no assets, little income, etc. but I am determinded to explore all other options first. I have contacted one of those debt negotiations firms that claim they can get your debt reduced by about 50% for a 12% fee. The only downside being I will be reported late for the months it takes me to save enough money to make a settlement however, my CR will read "settled in full" upon completion. I have also been reading a book that claims I myself can negotiate with my creditors and possibly settle for 20-30% if I can convince them I am seriously on the verge of BK and have no assets that they could stand to collect. The key word being CONVINCE. It claims that this is all they would stand to collect otherwise if it were turned over to collections, etc. Has anyone ever been successful at this? Tried? If these DN people can do it, and apparently they can from what I've checked out, why can't I? And yes, I have a friend that could and would loan me the 20-30% to pay them off upon agreement. I have excellent "people skills", however, not too good at being firm with someone on the phone. Any (constructive)advice? I am pre-tty far in the hole....

A. It is very unlikely that you would be able to settle with credit card companies for 20-30% of the balance owed. Even 50% is unlikely unless all the accounts have been written off. You can try to settle it for yourself. Debt negotiation companies charge you an outrageous fee. And they do not carry more weights than you do. Yes, 20-30% settlement with cc is extremely rare. 75% settlement after 3-4 months delinquency or 65-55% settlement after more than 6 months delinquency is the standard. Many would simply refuse to negotiate.

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