Break Down in Debt Negotiation

Posted on March 5, 2008
Filed Under debt |

Two weeks ago I wrote that I had reached a settlement agreement with Capital One. This settlement was based on two things, I should have had my tax refund back by February 28th and if I didn’t a friend was going to loan me the money in the interim. Thankfully, I would not give them a post dated check by phone.

I had to wait to file my returns until I had gotten a re issued w-2 from a previous employer and they took FOREVER to send it so my refund will not be deposited until this Friday. The friend who was going to lend me the money, found that they could not do it at this time and so I had to call Capital One and tell them that I was going to miss the deadline by a week.

They are not nearly as nice when you give them bad news. Mrs. Howard was pretty much just rude and uncooperative. She demanded payment immediately and would not extend the deadline for a week. This leaves me having to totally renegotiate the settlement this week once my refund has arrived.

On the bright side, I worked out an agreement with Beneficial to apply for a hardship which will reduce my interest rate and my payment by half. They also waived late fees and penalties. Frankly I am much more inclined to pay them as they have been so helpful than I am to pay Capital One who has been such a pain to deal with through this whole time.

Capital One’s theory was that they weren’t negotiating anything until the account went to legal and sending anything less than the entire amount due would do nothing to stop the process. I have never claimed that I did not owe them the money, just that I was not in a position to pay the entire amount that was due all at once.

So this Friday I will be renegotiating with them to settle the debts. Hopefully when I have cash in hand they will be a little bit more willing to negotiate than they were last week. The lessons I learned from this experience are:

You are better off to have the money in hand when negotiating.
Don’t reach a settlement unless you are SURE you can follow through.
Capital One is a royal pain to deal with on anything.

The book that has helped me in negotiating my debt settlements is called Good Credit is Sexy and it can be purchased here. Order the Book!
Have you had experience negotiating or settling a debt? I’d love to hear from you.