Two people discuss settling debt for pennies on the dollar, including a case where $200,000 in private student loans became a $20,000 payment. They debunk myths about collections and wage garnishment, warn about settlement scams, and describe how one client repaired his relationship with his father after getting out of debt.
Our best settlement was 10% with a large private student loan creditor where we settled $200,000 worth of private student loans for $20,000.
I had a creditor call my husband last week and it was the funniest thing ever. I think it was for— I can't remember exactly what it was for, but they said if he didn't make a payment, it was going to go to collections. He was like, well, send it to collections. And they were like, what? No, we're not. He said, send it to collections. I'll deal with it from collections. Because, like, even if it gets sent to collections, it's still not on his credit report yet. But, like, it's going to be a third of what is old.
You know, it really is an empowering thing to just have a little bit of knowledge because you get these threats and many people are stressed out, so they don't, they don't know what's truth or not. And there's so many scams out there as well where people saying, you know, pay these tolls or you're going to go to jail or whatever you're going to get. So yeah, if something goes into collections, that doesn't mean they're going to garnish your wages. That doesn't mean they're going to freeze your bank account. All that means is somebody else is going to call you and you can always make a deal with the collection companies. And like you said, sometimes you get a settlement for as little as 30 to 40%. Our best settlement was 10% with a large private student loan creditor where we settled $200,000 worth of private student loans for $20,000. It was an incredible moment and there were special circumstances in play, but you really can get great settlements. Uh, if even if something is in collections, life, and it was literally life-changing for the client because I remember this debt, his dad co-signed it for him and it really caused them not to talk. He, when he settled that debt, he called his dad right after and they both were crying. And that's, that just shows how emotional debt can be. I mean, not talking to your son over a debt, um, and, and for that relationship to be fixed by one settlement is unreal. Um, but that, that's the power. That's the power of just a little bit of knowledge, a little bit of effort, getting something done.
