How I Have Gotten Out of Debt through Settlement

Updated: December 26, 2014

Today, I’m giving you a guest post from Jason Holmes who has successfully gotten out of debt through debt consolidation or settlement.

While this is not a very common practice in the Philippines, it is in the USA.

So I hope my readers in America can appreciate Jason’s story and the advise he offers.

Let’s now read his story.

I would like to share my personal experience on how I have been successful in getting out of my debt problems.

What happened was I was not at all aware of how to manage my personal finances. I continued charging my credit cards for making small, as well as big purchases, without paying off the outstanding balances every month.

As a result, I landed into huge amount of debt on 4 credit cards.

I realized what mistake I’ve done when I finally got a call from the collection agency. And that’s the very moment I promised myself to get out of debt as soon as possible.

Here’s what I did:

Assessed my scenario and planned a budget
When I assessed my financial status, I found out that it won’t be possible for me to repay the total outstanding balance. I had to pay off about $56,000 in 4 credit card bills.

Thus, it was time to plan a budget that would help me to save more each month. I decided to lead a frugal life as much as possible and cut down all my extra expenses.

I made certain lifestyle changes like eating out only once a month. As suggested by one of my friends, I also started collecting discount coupons from newspapers so that I could use them for grocery shopping.

In the end, all these efforts helped me to save about $4,000 within 3 months of time.

Negotiated with creditors to settle debts
As it was not possible to pay off the debts in full, I decided to negotiate with my creditors to reduce the payoff amount as much as possible.

I called up my creditors, explained my financial situation and convinced them that I would have to file a bankruptcy if they don’t agree to reduce the payoff amount by at least 45-60% of the outstanding balance.

I was really lucky to have my total outstanding debt reduced by 48%. So, after reduction, I needed to pay $29,120 to settle the credit card bills.

I would like to mention that it was a bit difficult in the first few months to follow the budget strictly. However, I got motivated as soon as I was able to settle the first credit card debt. From then on, I didn’t have to struggle much and was able to settle my debts within 2 ½ years of time.

This experience has taught me how to really manage my personal finances more responsibly.

This guest post is contributed by Jason Holmes. He is now a regular writer with Debt Consolidation Care and is also a contributory writer with other financial sites.

His expertise is woven around various aspects of the debt industry and with his e-books he tries to impart to people the different situations and simple solutions to get out of debt.

Some of his works include e-books like Credit Score The Quintessential Therapy for a Happy Pocket, Take Creditors and Collection Agencies to Small Claims Court and My Story- From Depression To a Smile.

Did you like his story? I did because he mentioned several important points when you’re trying to get out of debt:

  • Making lifestyle changes such as budgeting and embracing frugality.
  • Being proactive in settling his debts, he called up his creditors and negotiated.
  • Focus and patience. It took him more than 2 years to pay it all off.

Do you have your own story to tell? Then why not share them here.

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Photo credit: vipez


  1. I have my HSBC credit card get cancelled because of non payment. I have with them a balance of about P10,000. I intentionally did not pay my bills because one time they charge me with late charges even I called them that my payment would be late by an hour. Now my bill from HSBC amounted to more than P40,000 because of the interests and charges. I am interested on what this post said about filing bankruptcy, how can I do it, considering I am an employee?

  2. I wouldn’t advice filing for bankruptcy due to debts of that amount specially if you have assets that’s worth more than those.

    But in any case, the Bankruptcy Law in the Philippines is called the Insolvency Law under Act No. 1956.

    I am not authorized to give legal advise, so if you really want to know more, I suggest you contact a lawyer about this.

  3. Joyce, call hsbc and just ask if you can repay 10,000 back in say 12 months, they won’t give in at first but they will give you payment options for you to work with so that you don’t have to pay the entire 40k. I work for a bank i know. you still have to pay though. you have a job so don’t be a deadbeat patay gutom pinoy.Pay your bills like the rest of us.

  4. I am really surprised to hear about how your debt was reduced by 48%. I suppose if you were negotiating with the bank and told them that you would file for bankruptcy, the bank would rather receive 52% of your payment rather than nothing. It is really hard to imagine racking up over $50000 on a credit card bill. That is why I suggest paying with cash or debit only. That way, you only spend the money that you know you have.

  5. a month ago, i got a call from an agency representing hsbc. they told me to pay 135k. my last bill statement was at 85k. after much discussion and negotiation with them, they gave me a week to pay a reduced amount of 20k and they will issue a certificate to me clearing my account. so after 3 days, i went to hsbs main office in FORT, where an account officer waited for me. after i made the 20k payment he issued me my certificate. now, im worry free!!!

  6. @shutterboi:
    how did you do about it?
    is it really true, i mean there certificate, are we really assured?

  7. Borrow,borrow and borrow more, with the full intention of never repaying
    That is our barangay mentality in Philippines.

  8. I failed to pay my HSBC card for 3 months now. I’ve had the card for more than a year. I decided to skip payment coz of financial reasons that I didn’t foreseen. Plus, I’ve noticed that my outstanding balance remained the same for months even if I paid double of my minimum payment. And they charged me for late payment too that lead me to exceed. When I called the customer service, they said it’s because they didn’t put the financial charge in the previous month. So that’s like two financial charges in a month! So it definitely made me exceed. Which lead of course to having additional charge for exceeding and so on…So now, I told the collectors that I can pay half of what I’ve been paying them before which they declined. They also offered me a certificate to clear me from my debts if I pay a sum of 35000. Which I don’t have at the time. Not paying debts is of course not acceptable because it’s the money that you OWE the bank… But come to think of it, banks such as HSBC really asked for too much. Can you imagine yourself paying an interest that does not decrease?For life? I don’t think that’s reasonable…Banks aren’t the only victims…

  9. hi,
    i do suffer financial crisis and was not able to pay my 2 cc since oct ,last yr.i also suffered the harassment’s of ca,which causes sleepless nights.i wud like to write to tthe bank ,for debt restructuring,but i cant afford to pay for a lawyer.maybe,it wud be better if i deal straight to the bank concernd than deal with ca?pls help me in writing debt restructeure letter.i hoe i can pay with the principal only,minus the interest.thanks so much

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