Ask Bill your personal finance question

Chase Debt Consolidation

I am Drowning in Credit Card Debt. Chase is My Largest Creditor. Is there a good Chase Debt Consolidation Program?

I have a lot of credit card debt. The largest debt I have is $12,000 that I owe to Chase. My total debt is over $30,000. I am not able to meet my minimum payments each month and some of my interest rates have been hiked to above 25%. I feel like I will never catch up. Is there a Chase debt consolidation program that would help me  get out of debt? I appreciate any advice you can give me. Thanks.

Read full question
Bill's Answer
4.5
/5.0
(53 Votes)

Chase Debt Consolidation Options
Highlights

  • Understand that different creditors behave differently.
  • Review how Chase generally reacts to debt consolidation programs.
  • Try the free Debt Coach tool to compare all your debt relief options.

Thank you for your question about your credit card debt, specifically your Chase credit card debt, and whether there is a Chase debt consolidation option or other solution that will help you.

Chase is a full service bank, offering a variety of services including checking and savings accounts, credit cards and a Chase mortgage department. Chase is not currently offering unsecured debt consolidation loans.

Contact one of Bills.com’s pre-screened debt providers for a free, no-hassle debt relief quote.

Self-Help

Communicate with Your Creditors

If you are struggling to pay your creditors, a good first step is to maintain communication with them. Call your creditors directly, before you miss any payments. In your case, you should call Chase and your other creditors, to see if they offer a financial hardship program that may give you some temporary relief. Ask for an interest rate reduction or permission to make a smaller than normal minimum payment, so you can avoid suffering late fees or a hike in interest rates.

Balance Transfers

If your credit is in good standing, look into a balance transfer offer as a debt consolidation solution. Use a balance transfer to move as much high interest debt as you can into a lower interest rate account. Be aware that balance transfer offers come with a low, introductory 'teaser rate' that adjusts to a higher rate, after the introductory period ends. It is up to you to know how long the low-rate period lasts and what your interest rate will be after the low-rate period ends.

Collections Process

If you default on your Chase account or with your other creditors and you are unable to work out a solution with them, you will end up in collections. Not every creditor treats all delinquent accounts the same and even individual creditors treat different customers differently. However, there are some basic strategies and practices that Chase and other creditors employ with their delinquent customers:

  • Most creditors first attempt to collect a debt internally. If not successful, they refer the account to a law office for collections.
  • Some creditors use in-house legal departments to collect on the debt, though that is becoming less common.
  • In general, accounts are referred for legal collections after they are somewhere between six and nine months delinquent, depending on the creditor.
  • Creditors have thresholds for identifying the accounts they decide are worth pursuing by legal collections. The amount owed and the state specific collection laws being primary considerations. Creditors are less likely to engage in legal collections, for example, in states that don't allow them to garnish your wages, such as Texas, Pennsylvania, North and South Carolina.
  • Your recent activity on your account can affect the collection process. Some creditors pay close attention to your specific account activity, when deciding whether to pursue legal collections. For instance, Chase, Bank of America, and Citibank pay less attention to recent balance transfer activity or cash advances than do American Express or Discover.
  • Eventually, your account may be sold to a debt collector. Creditors that are unable to collect anything after your debt has been contracted to a law office usually sell the debt to a debt purchasing collection agency. This frequently happens approximately 18 to 24 months into the collection process.

Outside Help

If Chase or your other creditors are not willing to work with you, your best debt relief solution may be to work with a professional debt relief organization, such as a credit counseling firm or a debt settlement firm. Before you choose the right way to solve your debt problem, it can be very important to understand how your specific creditors work with their customers. That way, you can plan the most effective strategy for getting out of debt.

Bills.com's editorial staff has done extensive research to provide you with some specific facts about Chase and how it deals with accounts enrolled in debt relief programs.

Chase Debt Consolidation & Credit Counseling

If you enroll a Chase account in a credit counseling's debt management program, you should expect:

  • A monthly payment that is 2.00% of your account balance
  • A minimum monthly payment of $15
  • An interest rate of 6%. If your rate is at or below 6%, not only is there is no reduction, but your rate will be increased to the 6%. If you have a card with an interest rate below the one the DMP will put in place, you can try keeping the card out of the program, but most DMPs require you to place all of your cards into their program.

Chase & Debt Settlement

Debt settlement is an option to consider. when you are experiencing a serious financial hardship. Debt settlement is an aggressive form of debt relief designed to get you out of debt in 24-48 months. For the program to succeed, you need make the monthly program payment, which is usually significantly less than the current monthly minimum payments that your creditors require.

Bills.com reviewed hundreds of settlements reached by professional debt settlement negotiators for the client's Chase account. The average settlement negotiated was less than 50% of the balance that the clients enrolled in the settlement program.

Individuals are free to negotiate settlements directly with their creditors, but many people find it well worth the fee to hire a reputable and experienced settlement company, especially when they pay no up-front fees to enroll in the right debt settlement program. To avoid up-front fees, Bills.com recommends choosing a debt settlement firm that is a member of the AFCC (American Fair Credit Council) and has debt consultants that are accredited by the IAPDA International Association of Professional Debt Arbitrators).

Chase & Legal Action

Chase is not known as the most aggressive creditor, when it comes to taking legal action against delinquent debtors, but it is not the most lenient either. Chase usually waits 6 months after the first delinquency before referring its accounts to outside legal collections. Not every account that is 6 months late will be sent to collections. Chase reviews the size of the debt owed, the state collection laws where the customer resides, and whether the customer's employment history and assets make collection likely. Chase currently uses an internal legal department to collect some debts in California, New York, New Jersey, Florida, and Illinois, although it also contracts with outside collection law offices.

Recommendation

Bills.com recommends that you look into all your debt relief options, before making any decision, in order to weigh all the pluses and minuses that come with each solution.

We strongly recommend Bills.com's no-cost Debt Coach tool, which received positive reviews from both the New York Times and from CNN. Debt Coach allows you to easily go over all your available debt options, based on the goals and priorities that you specify, giving you a realistic estimate of how long it takes to get out of debt and what your total costs will be.

4 Comments

Recent Best
1500 characters remaining
  • GS
    Sep, 2013
    Gerald
    Chase does not want to work with me, even though I have a serious medical issue that has caused increased expenses and a loss of income. I can prove to them what's happened and I've been a long-standing customer that always kept my account in good standing. Why are they so inflexible and what can I do?
    0 Votes

    • BA
      Sep, 2013
      Bill
      I can't tell what you're seeking from Chase, whether it is a temporary reduction in your interest rate, a cessation of collection efforts, or a lump-sum settlement. I recommend calling them back and asking to speak to a supervisor about a hardship program. Be prepared to send in proof of the medical condition and its financial effects.
      0 Votes

  • HM
    Mar, 2013
    Howard
    My friend called Chase when she couldn't pay them and they put her in a hardship program. When I was in the same position, I called and they did not help me out at all. I could not make the full payment and my interest rate got raised to 29%. Why do they treat people differently? I had been a long-standing customer and never missed a payment or did not hit my required payment, until my income was cut when I lost all my overtime pay.
    0 Votes

    • 35x35
      Mar, 2013
      Bill
      We are not aware of any credit card issuers that publish the rules of their hardship programs. These programs are just internal policies, which of course can change over time. The result, as you found, is inconsistency.

      Try calling back and see if you reach a different customer service representative. There will almost certainly be a notation of your earlier call in your record, so the tactic to take is to ask why you were denied access to Chase's hardship program, and in so doing try to learn what factors Chase uses when deciding Customer A qualifies but Customer B does not.
      0 Votes