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ok here is my question regarding debt snowballing...

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myself and my wife have about $76,000 in debt between credit cards, car loans, student loans etc. I have a bunch of credit cards with small to medium balances. I just read "The total money makeover" and we are on board and just did our budgeting, and emergency fund. I just did our debt snowball chart. My question is... my credit is shot to hell as it is... should I look at settling a lot of my smaller to medium balances and getting them out of the way so we can start tackling the larger ones? Any input would be greatly welcomed

Are your balances current or late? Creditors will usually not be willing to settle for less as long as you are making your payments. You would need to not pay them for probably 120 days or more. Then you would need to try to settle before they charge off the balances at 180 days.

Sub: #1 posted on Thu, 07/10/2008 - 07:24

alias1958 alias1958

(Posts: 1230 | Credits: 79.88)

most of the small to mid balance ones are in between 90 and 180 days late

Sub: #2 posted on Thu, 07/10/2008 - 07:27


Try settling the most past-due ones first. At this point, what have you got to lose?

Sub: #3 posted on Thu, 07/10/2008 - 16:16

unclewulf unclewulf
(Posts: 3173 | Credits: 315.03)

What I would do is save up some money like $1000 and I would make a chart. The first column I would list of all the debts from smallest to largest like you have done. Next I would list each debts deliquency period. In the last column I would list how much you were willing to settle each debt for. I would then review my chart and start making settlement offers to each company starting with the smallest amount first and then go up the list. I might bump the order around a bit if some of them are approaching that 6 month charge off mark.

When I called the company I would say I have an oustanding balance I am willing to settle today for XXX amount of dollars based on your list. I expect for you to send the offer to me in writing prior to issuing payment and then I will pay by a cashiers check via certified mail return receipt requested. If they accept then settle. If they do not accept then move on up the list. This method gives you some bargaining power because you can basically tell the company hey I have some spare cash to settle but if you don't accept it then I will gladly make the offer to one of the next 100 credtiors on my list that I owe and it might be another year before I save enought money to make it back to you.

Don't waste a lot of time on the phone arguing with some schlep becuase they really don't care and their real job is to just harrass you. I would give them at most 5 minutes. State your offer and tell them to put it in the notes and unless they are calling to accept the offer then don't bother calling. If they do call refer them to the notes and hang up.

Sub: #4 posted on Thu, 07/10/2008 - 20:26

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(Posts: 1078 | Credits: 137.97)

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