Second mortgage debt settlement!
A couple of months ago, I told you that I had received an unexpected collections letter in the mail, stating that we were 30 past due in payments on our home equity line of credit from the house we sold last summer.
If you read the post, you will realize that while I was aware that we owed this debt, I had not received any communication telling me where to send the payments.
Over the past few months, I have been working on getting balance and payment information from the collections company. They continued to be difficult to contact: phone conversations were vague, messages went unanswered, emails seemed to disappear into thin air and – most frustrating of all – I seemed to talk to a different employee every time I called. Furthermore, if someone from the company left me a message, they would never leave an extension. I could only call the main operator and then try to get transferred to a representative, of whom I was never certain of the name. The other interesting thing is that the only piece of USPS mail that I ever saw from them was that one collections letter back in April.
Ironically, I acted more like a collections agency and they acted more like a debtor throughout the whole thing. I kept calling and telling them that I was intending to pay the debt, but I needed to know exactly how much was owed, how much the payments would be and exactly where I should send them. Seemed like simple requests, but since no one would return my calls and since I had to start at square one with multiple representatives, I still had not sent a payment as of the middle of July.
I think they must have thought I was stalling and trying to avoid the debt because I got a phone call about a week and a half ago with a representative on the other end offering to settle the debt and asking me to make an offer! You could have knocked me over with a feather – I had just told someone from their company that I “am good for the debt, just give me the details” a week earlier, but the person never sent me any documentation or called back . . .
So, I thought, “why not try?” and offered a lump sum of fifty percent of the debt that we owed, never expecting that it would fly. They accepted! I never requested debt help or mediation. I never intended to pay less than what I owed, but when they agreed to settle for half of the remaining balance . . . what could I do? I have a signed letter in my hand that states that if I can get the agreed-upon sum to them by September 2, 2010, they will consider the balance “paid-in-full”. Mrs. Stew and I are pretty happy!
Now, before you try this at home, there are a couple of things you need to know:
- For some reason, the fact that our payments on this line of credit were past due never made it to our credit report. We currently have “excellent” credit. That is most likely due to all of the confusion surrounding the sale of our home and possibly some incompetence on the part of this debt collections agency. I doubt if anyone else could replicate the exact sequence of events that put us in the place where a creditor was asking us to settle a debt without negatively affecting our credit score.
- If for some reason, #1 changes and our score gets dinged, I will take it. The chance to settle this debt once and for all is too good to pass up.
- Frankly, our credit score can drop to 500 for all I care, we have no plans to borrow any more money, ever.
- Coming up with several thousand dollars in a month is going to be a challenge. We typically have one to two month’s worth of expenses in our emergency fund. However, it just so happens that I recently took advantage of a couple of 0% APR balance transfer offers . . . so we will use that money. It puts us in the position of possibly not being able to pay off the credit cards when the normal APR resets, but even at 14 or 15 percent we will be better off with half the balance.
Ultimately, the credit for this turn of events lies with a sovereign God who cares about even the most inane details of our lives. He never promises to make us rich, but He has promised to meet our needs. Settling this debt is a great need and we thank Him for working things out according to his plan.
Article by Stew
Photo by Casey Serin