Debt Renegotiation Help

Trying to Renegotiate Debt When Not in Default

I owe a tiny bit more than $17,000 to a major bank. I am currently making the minimum payments on it and am not in default.

I should be getting about $10,000 returned to me from income tax between myself and my boyfriend. I would like to speak to the bank and settle the debt and pay one lump sum of all of this immediately instead of the $17,000 over time.

I know with bankruptcy the courts force the banks to accept, but can I negotiate this myself?

Candace

In my experience, the bank probably won't want to listen because you are not in default yet. But it is worth a try because banks are facing an increasing number of "stealth" bankruptcies, ones where there is no prior warning that the creditor is in trouble.

When you call the bank, the first person you speak to will probably be of no help. Try to talk to a supervisor or get transferred to the bank's "work out" department.

This department has nothing to do with exercise. These are the people empowered to settle outstanding debt.

Because credit counseling is now required before you can file for bankruptcy, it might be a good idea to go through a session with a counselor approved by the court. S/he might be in a better position to bargain with the bank over the debt.

On another topic, why is your tax refund so large? You are giving the government an interest free loan.

I know that lots of people like to get a big check at tax time, but it makes more sense financially to adjust your withholding so that you are close to even when you file your return.

In your case, you would have had an extra $192 or so a week to work with.