Will debt settlement offer be accepted if I am current on creditor\'s payments.?

Within the last 18 months I have run up $47,000 in credit card debt. Amount owed to creditors ranges from $4000-$10,000 per creditor. I am current on all of my payments, which are about 30% above the monthly minimum. It was my assumption that primary creditors (no, assignments to collection agencies)would not consider a lump sum payment of 60 to 70% of the amount owed, as a full settlement of the account, unless the account was already delinquent by at least 90 days. There is something unseemly about strategically defaulting on debt in anticipation making a compromise offer at a later date, so that has little appeal. But I am 64, self-employed, with no retirement savings and a declining income. But recently I refinanced my house and will receive enough cash to pay all of the credit card debt, plus $35,000 owed on income tax. My credit score is 640. Two questions: 1. Is it likely that any of the major credit card companies would accept an offer in compromise without the account being already in default? 2. If I did settle my debts for less than the full amount, what would be the likely effect on my credit score and how long would the credit score remain depressed assuming no further debt is incurred?

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As for your main question, no the creditor is not going to agree to your debt settlement request as you are still current on your payments. Offer in compromise is mainly possible with the debts that you owe to the IRS and not to creditors.

As for your second query, the effect of debt settlement on your credit is negative. You will have to miss payments in order to make the creditors agree to your settlement request. As you miss payments, it is going to get reflected on your credit report and this is going to negatively affect your credit score.

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