Can I negotiate a settlement w/o a missed payment?

[crucifixion]

What is the name of your state (only U.S. law)? CA

I have $50K in credit card debt (2 BofA, 1 Chase). I am in the process of buying a house and got about $50K from my parents as help for a downpayment. By doing a FHA loan, I only need 3.5% down, which essentially will leave me with about $30K free to do whatever.

Iniitally, I was just going to pay the $30K to my credit cards and just end up with only $20K in credit card debt, and continue making my payments on time, like I have always been doing.

However, I have another house, which I am going to stop making payments on as soon as this new house closes. So now my credit (720) will fall thru the floor as my first house goes into foreclosure/short sale.

So I started to think: since my credit is going to get messed up anyway, why not take another hit and settle my $50K credit card debt?

That brings me my question: Can I call up my cards now and negotiate a settlement for 50% of the balance due?

Should I do it now when my credit is great and I have zero missed payments to anything?

OR

Should I wait till after my credit drops from the missed payments on the house and tell them I'm going to start missing my credit card payments too so lets settle now

OR

Should I wait till after my credit drops from the missed mortgage payment AND start missing payments on the card to negotiate? At that point my credit will be really F'd up. At least if I only did a short sale, my credit may drop to 300 and after a year or two of great credit should get it up to 600. But if I do a shortsale, and then miss credit card payments, my credit may get so bad it will never get repaired

Not sure what to do. I really don't want to pay $30K in cash to the card companies and still have $20K in debt, even tho that is the right thing to do.

 

[ecmst12]

You could use the 30k to continue the mortgage payments on your old house until it sells, and prevent your credit from falling into the toilet from a foreclosure.

 

[xylene]

You are basically up to your eyeballs in debt.

You should consider a bankruptcy as one option.

You should talk to a debt professional.

There are so many things unsound with your plan, and your thinking about debt, that is is hard to begin.

For one, you are basically bordering on fraud.

 

[crucifixion]

You could use the 30k to continue the mortgage payments on your old house until it sells, and prevent your credit from falling into the toilet from a foreclosure.

Yeah but I'd still be in $50K credit card debt. I'd have a great credit score, but big deal. I'm willing to trade my credit score for being debt free (or close to it)

 

[crucifixion]

You are basically up to your eyeballs in debt.

You should consider a bankruptcy as one option.

You should talk to a debt professional.

There are so many things unsound with your plan, and your thinking about debt, that is is hard to begin.

For one, you are basically bordering on fraud.

I also make $95K a year, so I wouldn't say I'm in my eyeballs in debt. Its somethign thats always on my mind but I am making my payments on time and still have money for living. If I wasn't paying down my credit card debt, that money would just go to either savings or entertainment.

But I am interested in the many things you think are unsound with my plan. Aside from being unethical perhaps, what else is there? I dont care about my credit score at this point. I have great credit that I protected for many years but now its time to convert that score into getting as close to debt free as I can.

 

[TigerD]

This poster has been planing going bad on his debt for quite some time. Even last year he sought advice on potential judgment consequences of stopping paying on his mortgage.

This isn't someone in trouble. This is a person planning to steal.

DC

 

[crucifixion]

This is a person planning to steal.

DC

How so? Please explain to me what in my scenario constitutes a plan to "steal"

 

[Zigner]

How so? Please explain to me what in my scenario constitutes a plan to "steal"

Maybe this?

However, I have another house, which I am going to stop making payments on as soon as this new house closes.

 

[crucifixion]

How is that stealing?

I'm making a business decision to walk away from a house and let it go to foreclosure (or short sale if that works).

I am not "stealing" anything. I am just not making payments on a house I can't afford.

 

[Zigner]

How is that stealing?

I'm making a business decision to walk away from a house and let it go to foreclosure (or short sale if that works).

I am not "stealing" anything. I am just not making payments on a house I can't afford.

You are making plans to put yourself in to a position where you won't be able to afford it.

Disgusting...but that's just *my* opinion.

 

[VeronicaLodge]

Yeah but I'd still be in $50K credit card debt. I'd have a great credit score, but big deal. I'm willing to trade my credit score for being debt free (or close to it)

OMG! you bought stuff for that 50k, you borrowed it and promised to pay it back, now its too much trouble for you? seriously? pay your effing bills!

why are you buying a new house when you already have one and are letting it go into foreclosure?

oh and as for your question about stealing? this pretty much answers it. 50k is what you are stealing. you bought 50k worth of sh*t and don't want to pay it back because you would rather spend your money on entertainment???? are you for real?

 

[ecmst12]

How much negative equity do you have on the house you want to let foreclose?

 

[crucifixion]

If its possible to negotiate a settlement of the $50K (which means the company AGREES to take less) then thats not stealing. They would AGREE to it. If they say no, then oh well I keep paying. That's why I'm asking can I negotiate a settlement without a missed payment. I probably wont be able to, but I am just exploring my options.

As far as the first house, owe $450K and value may be around $375K so I should be able to short sell it. But with short sales, the bank won't even talk to you UNTIL you miss a payment. I'd rather not even miss a mortgage payment, but I'd have to in order to do a short sale.

 

[Zigner]

If its possible to negotiate a settlement of the $50K (which means the company AGREES to take less) then thats not stealing. They would AGREE to it. If they say no, then oh well I keep paying. That's why I'm asking can I negotiate a settlement without a missed payment. I probably wont be able to, but I am just exploring my options.

As far as the first house, owe $450K and value may be around $375K so I should be able to short sell it. But with short sales, the bank won't even talk to you UNTIL you miss a payment. I'd rather not even miss a mortgage payment, but I'd have to in order to do a short sale.

This is a question you should be asking your bank. It's not a legal question.

 

[Gail in Georgia]

Look Bub...you make $95K a year, you're $50K in credit card debt, mommy and daddy are attempting to bail you out by giving you $50K....and you're wondering how much you can screw with the credit card company?

Oh no, you're not in debt up to your eyeballs.....

Gail