Creditors will settle for less than what you owe, but only if you have the money to pay them when you settle. It doesn’t sound like you do–at least not until you get your settlement.
Also, something to think about, is it wise to spend your settlement on paying off the cc companies? If you guys don’t have any reserve, are you going to be able to afford the nurse, etc? What if something happened to you?
Here’s what I would consider if I were in your situation.
1) Stop answering collection phone calls. You have enough stress going on right now. Let your answering machine take their calls until you can get a plan together that is stable and the best you know you can do.
2) Do you have a written budget? Pay the house, utilities, minimum food bills first. Then if there’s anything left, divide it by percentage among these guys. If there’s not, tell these guys there’s not. The worst they can do is trash your credit, but to be honest, it’s too late for that so who cares. Now, you can only do what you can. And that’s your decision, not theirs.
3) Send your creditors a certified letter explaining your situation.
I once heard Dave Ramsey say that when he got into major debt, he was paying some creditors a couple dollars. But he had made a chart of all his debts and what percent each debt was toward the total. He also had his budget on paper. With each payment, he sent them his budget and the debt chart to show them that he was sending as much as he could.
4) No credit counseling. Basically, you’re paying someone else to do something you can do on your own, using google for advice and tips. Here are a couple good URLs re: creditors/collections
This is going to be a tough road, so honestly, take care of you and your husband first. That’s what’s most important.
Has anyone read his Transforming Debt to Wealth book? I have read a lot of pros and cons on Internet about his program. Primarily, I am just trying to learn techniques for bringing down debt faster. Here’s what I’ve learned, for example, from Dave Ramsey, etc.:
1. Debt Snowball (either starting with smallest balance, or starting with highest interest).
2. Using compound interest to your benefit by paying either every two weeks, or every week, which saves a lot of interest.
3. I downloaded an Excel file from this group that lets you plug in balance, interest rate, and number of payments to see how long it will take to pay something off.
Does anyone know if John Cummuta, or other gurus out there, have other “techniques” that can help get debt down a little faster?