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Hi there, I'm Michael Bovee with Consumer Recovery Network and
welcome to our YouTube channel.
Today it's been brought to my attention anyway,
that I should discuss more creditors specifics.
I talk a lot of generalities,
debt settlement in general, debt consolidation in general,
dealing with debt buyers and credit reports.
But let's narrow down our focus to specific entities.
And I want to start with Discover Bank and dealing with
them when you can't afford your credit card payments,
because they're pretty unique.
In fact, currently, at the time we're recording this,
they're probably the most unique in how they deal with you,
their customer when you're unable to keep current.
First of all, it's pretty standard for all banks to offer
some form of hardship plan or reduced interest rate plan
through a non-profit credit counseling agency.
If you're struggling with more than just Discover, I would
highly recommend that you call the hotline and press one.
And get connected to the largest national non-profit credit
counseling agency.
And find out how you can you can consolidate more than just one
bill and get your payments lowered.
Or at least potentially find out what they can be lowered to.
It's a free call, so
it's worth the effort to get an exact quote.
But if you're just dealing with Discover and you want to get in
touch with them about, hey I can't pay this month's bill or
I wasn't able to pay two weeks ago when it was due.
If you're not quite, or
too far along in delinquency, calling them can yield a result.
And the result could be exactly what you need.
In other words,
let's say your minimum payment to Discover due is 400.
You didn't pay it two weeks ago, you're already late.
Calling them and discussing your options to lower your monthly
payment could yield something like this.
Let's say your interest rate's 18% and
they're willing to drop it down to 0.9%.
Yeah, they do it, right?
It's specific, you can't say that they do it with everybody.
You might qualify for it though.
And having that discussion
with them is a worthwhile thing to do.
Let's say that you can't amortize your repayment,
your balance to Discover is 10,000.
Amortize that over sixty months and that's still too much for
you and you can't afford it.
Discover does some things very unique than any other credit
card issuer currently.
They offer what's known as a 60/60 plan.
You have to qualify for it, it's not for everybody.
They're not going to extend that offer to everybody.
You have to be actually months sometimes behind with payments
before they can qualify you for it.
So obviously this starts with a phone call to Discover.
Can't do, can't qualify for
a full repayment of your debt over 60 months or
a temporary hardship plan, it's still too high for you.
What if you took your balance, your $10,000 balance and
suddenly now it was reduced to 6,000.
So only 60% of what you owe and
then you amortize that over 60 months.
Now your payment's even lower than it was amortized over
a $10,000 balance for 60 months.
You've reduced it close to half or 60%.
So they call it the 60/60 plan.
A bunch of creditors tried to test this out,
didn't really last long.
And Discover's the only one that really stuck with it, or
at least publicly that I know of.
So there's another option.
Now after that, if you've fallen behind with Discover to
the point where they're charging your account off.
You haven't paid in six, seven months, they're gonna
subject your account to many different types of collection.
They are one of the more litigious banks in the nation.
So while I favor them in how they work with their customers
early on in your delinquency, they're one of
the more aggressive ones after you pass a certain point.
And that point is typically around the seventh
month that you haven't paid them.
Your risk of being assigned to a collection attorney,
somebody who specializes in your state and
collecting through your courts.
That's an escalation that sometimes leads people to
having to file bankruptcy, or having to focus their attention
on dealing with Discover and settling with them early.
Because getting sued and having the risk of your wages exposed
or your bank account levied, even property liens.
It's something you want to prevent when you can.
And you can,
actually you can negotiate with Discover directly before they
ever place that account with a collection attorney or
a normal contingency debt collector, the most common type.
Who just calls you and writes you letters to try and
get you to pay.
And if can't over a certain number of months,
Discover will just yank it back and
send it out to another collector or to the attorney.
Prior to any of that, around month six of nonpayment,
you can reach out to Discover directly.
And discuss with them what you might be able to do in offer of
a settlement in full, but for less than what you owe.
My data, what I keep track of and
what the consumers that I work with or talk with or interact
with on our other YouTube videos or on our website.
I do have a dedicated page up on the CRN site
dedicated to just Discover and settling with that.
That data suggests that your targets are usually
gonna bottom out at 40% of what you owe as a settlement target.
There are times where they're going to want more and
you may be one of those profiles.
Some of the reasons that a bank might want to try and
collect more from you in a settlement for
less than what you owe, than say someone else.
Is it's consistent across all debt collectors really in banks
is, is that you might just look more collectible to them.
You look like somebody who can afford to pay more.
So they have actually a kind of scoring model,
they'll draw a line at a certain percentage for you,
your neighbor might get better.
So if you're prepared to go as high as 50% in negotiating with
Discover, that's a very realistic target for
a lot of folks out there.
So keep that in mind, when you're reaching out to them,
all of these things that I've discussed with you are something
that you can directly discuss with Discover.
And by the way you can directly discuss
how to resolve that with one of the debt collection agencies or
attorneys working with Discover to try and get money from you.
So you are empowered to do a lot of things and
work within your means.
But never, and this is the last thing I'll end with.
Never agree to do something to resolve a debt with Discover
that you are not confident 100% that you can follow through on.
Because you are wasting money towards either some repayment
plan long term or even a monthly payment towards a settlement
a couple months worth.
If you can't confidently commit to it, don't do it,
wait until you can commit to it.
And then put yourself in a good position to resolve and
put the Discover account behind you.
I look forward to seeing you on some of our other videos.
But you're more than welcome to comment below if you have
questions or concerns about your Discover account.
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