no, so far I have faithfully been paying the minimum- I have been doing this for almost 2 years now, thought I could pay it down but I am getting nowhere. At this point I am getting desperate, see default as our only way out (I have other loans, student, car, etc, all secured to some level- would rather default on the unsecured cc's than secured, obviously).

So yes, the strategy is to begin default by not paying. I do want to set off alarm bells, do want it to go to a collection agency. My wife just feels bad doing this and thinks that paying tiny amounts would keep them from getting too angry. I am just afraid that making small payments will keep us from getting to a high enough level of default. I realize it is a silly point, but I'm wondering what your opinion is on that.

if you pay less than the minimum required payment... obviously that's going to set off alarm bells...

ultimately the creditor will eventually ask you for a statement of ability to pay...

you'll have to outline your assets and liabilities and income... this will give them an idea of your ability to pay...

have you done this exercise yourself?

thank you Monty,
Demonstrating limited means is quite easy to verify, my job was dependant on a gov't program which is coming to an end in march.

Related additional question- my wife wants to keep making small payments (way less than the minimum, like $50)- I know this doesn't make sense, it is just something she feels strongly about. Would this hurt or help our chances of being taken seriously?

superdave,
you could be eligible for credit card debt settlement in as little as a day...

The things that creditors look for are:
1) does the person have ability to pay?
2) how long has the person not paid?

If you have enough for a lump sum, obviously you have the ability to pay... and if you're making your payments on time each month, you aren't giving the credit card companies much motivation to settle.

Credit card companies will be more than likely to settle if you haven't made your payment in 6 or so months and you demonstrate limited means to service your debt...

What is your credit rating like? If you've still got good credit, why not try to switch over to a low interest credit card, or low interest line of credit? This would reduce your payments.

other wise you just have to wait the 6 months or so, until the credit card company is motivated to settle. this of course will put your credit rating in the toilet for 6 years+

I'm also new here- will throw in what I've recently learned but am also fishing for more info/advice.
I have been making regular/minimum payments so far (+ obviously not getting any further ahead, getting desperate) and was planning on offering a lump sum settlement. Apparently that will not work, you have to go into default first, to be taken seriously. You may even hurt your chances if they smell that you are coming into money later. Does anyone know how long you have to be in default first, and what else you should or should not do/say?

And please do not castigate me for living beyond my means- we are the cheapest, most careful non-consumers you can imagine. We are merely unemployed, all the money went to trying to boost our chances at employment (tuition, travelling to job interviews, etc).

Hi...new to the board here, so I'll start off with my situation...

To make a long story short, my girlfriend and I are unemployed, living with my parents, and facing significant credit student debt (150+ between us) as well as large credit card debt, about $8900 between us, split between 4 different cards. The largest and most behind is my MBNA card, which is $4600 (limit is 3600). I'm barely able to pay minimums on it, as our 'nest egg' of funds left over from when we were working is basically dried up.

We're looking hard for work, but nothing has come yet, and we're not banking on anything soon, so I'm trying to get a sense of whether settling on my MBNA card is an option, and how to go about it in terms of how to negotiate etc. And, of course, whether it is a desirable option in terms of its effect on my credit score (I haven't checked recently, but I have no doubt its already quite bad.)

Any advice and pointers would be most appreciated!

P.S. If one of us could get work then this wouldn't be an issue, but as it stands, I am still a student, and we have both been unemployed since July when we had to move back to our base province for family reasons. We did plan for a 6 month window with our emergency funds etc, but we're halfway through december with no work in sight and we just need to know our options. On top of it we still have $300 outstanding phone bill.