[MUSIC] 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. [MUSIC]