It is possible to become haunted by credit card debt. The same is valid for debt collectors. It is true that if you refrain from thinking about it, the problem will eventually disappear.
That’s not true.
The good news is that if you have been receiving phone calls or letters from Chase Bank or someone claiming to represent them, you will need to formulate a game plan before things worsen.
To save money and avoid going to court, you should settle your debt for a lower amount. Here is a description of the process.
Is Chase willing to settle for less than I owe?
Ideally, it would help if you settled your debt directly with Chase. However, if a debt collector has already contacted you, Chase has probably sold your debt to a collection agency that hopes to recoup its losses directly from you.
Your debt is typically sent to collections when it has been unpaid for 120 to 180 days.
You can settle your debt for a lower amount regardless of who you deal with. Chase is better off accepting a down payment rather than spending time pursuing you for the total amount you may not be able to pay.
It should be noted, however, that this is not a guarantee. Chase or the collection agency may not be willing to work with you if you are able can or all of the debt, for instance. Nevertheless, settling is your best option, as it can save you both money and the hassle of dealing with the bank or collectors in the future.
Chase can save you money
The majority of the time, settling your debt will save you money. Even after paying legal fees, 95% of consumers save money by settling. The average debt settlement is 50% lower than the original amount, demonstrating that it pays to pursue compensation whenever possible.
Credit impact of Chase debt settlement
It is impossible to avoid a hit on your credit score when you settle your debt. A central credit bureau prefers to see the words “paid in full” on your debts rather than the word “settled.”
It is only sometimes possible to pay your debt in full. To repair your credit, you should settle your debt quickly.
It would help if you remembered that settling your debts will have a lesser impact on your credit score than paying nothing.
How to settle Chase credit card debt
Your best option if you are buried in credit card debt with Chase is to settle the account as quickly as possible. You can pay your credit card debt speedily and reasonably by following the steps below.
Here are a few things to consider before you settle.
Be aware of your audience
Who are you dealing with? Is Chase directly involved in your case, or are you dealing with a debt collection agency? It is essential, as it can impact the process, particularly when sending a legal answer and making a settlement offer.
Make sure you know your rights
There are legal protections against frequent, unwanted calls from debt collection agencies. For instance, your creditor has a limited period to attempt to collect the debt. If your debt is older than the statute of limitations in your state, your creditor must refrain from pursuing you for it.
The Fair Debt Collection Practices Act (FDCPA) also protects you from unsavory debt collection practices, such as improperly serving you or violating the statute of limitations.
As a result of identity theft, the Fair Credit Reporting Act (FCRA) should protect you and prevent you from being held responsible for any debt.
The knowledge of these rights will be helpful if you are sued and may even prevent you from having to settle the case.
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Follow these steps to settle a debt with Chase
To settle your debt with Chase, follow these three steps:
- Chase should respond to any lawsuits filed against it.
- Send a settlement offer to begin the negotiation process.
- Obtain a written settlement agreement.
Step 1: Chase should respond to any lawsuits filed against it
If Chase has sued you for a debt, you should always act promptly.
Upon receiving notice of a lawsuit, you will be required to file an Answer document with the court, Chase, Chase’s attorney, or the debt collection agency. You must respond before your state’s deadline to avoid losing the case automatically.
You may be held responsible for the total amount of the debt if the court renders a default judgment. You will no longer be able to negotiate a settlement once this judgment is rendered.
You should file your Answer even if you have contacted Chase or the debt collection agency. A debt collector may agree to a verbal settlement, then sneakily request a default judgment behind your back.
If you file a formal Answer, you ensure that your response has been written and that you are trying to settle wi:th the court.
Step 2: Send a settlement offer to begin the negotiation process.
If you have filed an Answer to any pending lawsuits, you are now in a position to make a settlement offer.
You should make your first offer at approximately 60% of your total debt. For example, if you owe $6,000, you may offer to pay $3,600 ($6,000 x 0.6).
If you are sending an email settlement offer, please use the following template:
“I see you’re suing me for $6,000 for [case number]. I don’t have that kind of money and I don’t agree with the amount. But I do have $3,600 that I can pay within 30 days to settle the debt in full. Let me know if you accept.”
Typically, companies such as Chase (and the collection agencies they hire) will present a counteroffer, which you may accept or reject. Negotiations may take several rounds before an agreement is reached.
You still have options if you can’t afford to pay off as much as 60%.
Chase will ask you about your income, expenses, and budget as part of the application process. As long as you can demonstrate financial hardship, such as unexpected medical expenses, job loss, or a reduction in work hours, Chase will be more likely to settle your debt for a smaller percentage.
Step 3: Make sure you have a written settlement agreement.
To ensure that the debt collectors can refrain from reneging on the agreement, insistence on getting the final settlement agreement in writing is essential.
The settlement agreement is usually drafted by Chase or the collection agency on your behalf. It is essential to carefully review the document before signing it. Only sign a contract if you are sure that you will be able to abide by its terms.
You should only submit your settlement payment once you have received a written copy of this agreement.