What Is Discover's 60/60 plan?

George Simons

February 04, 2022

Summary: If you're experiencing financial hardship, Discover's 60/60 plan can reduce your debt to 60% and allow you to pay it off over a course of 60 months.

When you can't afford to pay your Discover credit card debt, you may consider other unfortunate options like filing for bankruptcy. Although this option completely wipes away your debts, it comes with severe consequences. Filing for bankruptcy will remain on your credit score history for up to seven years. During that time, you may have difficulty securing loans or even housing.

The other alternative is to discuss a settlement with Discover. A settlement is usually the better option because its consequences are less severe than filing for bankruptcy.

Discover's 60/60 plan explained

If you're a Discover credit card holder facing financial difficulty, the best thing to do is notify the credit card company right away. Failure to inform Discover about your current financial situation will only worsen the problem.

Discover will most likely reach out to you repeatedly, requesting that you pay what you owe. If their attempts to recover the debt fail, they could hand it over to a collections agency or attorney.

However, most creditors don't like to sue consumers. This is partly because lawsuits are hectic and time-consuming. For this reason, most creditors will try to work with you to recover the amount you supposedly owe.

That's the idea behind Discover's 60/60 plan.

Discover's 60/60 plan offers to reduce the debt to 60% of the balance and grants consumers the option to pay off the balance over 60 months. You'll then be required to spread the payments for the balance over 60 months.

The main logic behind this plan is that the credit card company has a better chance of recovering part of the debt when they break it into an easier and more affordable payment structure than filing a lawsuit against you. For instance, if you're deeply in debt, chances are you might consider filing for bankruptcy. As a result, creditors can no longer pursue any debt you've listed in your bankruptcy file. The 60/60 plan is a compromise: it gets the creditor their money while helping the consumer out of a financial bind.

Who qualifies for Discover's 60/60 plan?

The 60/60 plan by Discover isn't for everyone. This plan is usually offered to individuals in deep financial hardship. For example, if you're months behind on your payment, you may talk to Discover to explain your situation and express your willingness to find a solution.

Depending on how bad your financial circumstance is, Discover may propose the 60/60 plan as a probable solution.

However, you also need to understand that credit card companies aren't obliged to negotiate a settlement with you, especially if your settlement offer doesn't seem reasonable to them. For example, if you propose to settle as low as 10% of what you owe, chances are the credit card company will reject the offer.

This doesn't necessarily mean that you should be afraid to negotiate. On the contrary, honesty is the most important policy when negotiating a settlement with Discover or any other creditor, because you don't want to accept a settlement offer you still can't afford.

Keep in mind that Discover will most likely send your debt account to a collection agency if you go 180 days without making a payment. When that happens, the debt collection agency might file a lawsuit against you if they can't reach you to discuss a payment plan.

Tips for negotiating settlement with Discover

When negotiating a settlement with Discover, it's important to be prepared well in advance.

First, you need to keep a record of your finances, such as income and expenses, and the exact situation that caused your inability to keep up with your payments.

Chances are, you'll be asked questions about the situation that prevented you from submitting your monthly payments. Creditors ask these questions to have an idea of your current financial situation. For example, they may reject your settlement offer in some situations but propose a better repayment plan with lower interest rates over a specific period. This gives you much-needed time to solve your financial problems and resume paying your debt as per the initial agreement.

Second, calculate the amount you're comfortable with, both as a lump sum and monthly payments. Don't accept a settlement offer you're not comfortable with because you'll be responsible for the payment.

Finally, consider attending a credit counseling session to learn more about your options. Doing so tells the creditor that you're committed to settling the account.

The bottom line

Credit card companies may be willing to work with you to help you get back on your feet when facing financial problems. However, they reserve the right to approve or reject your settlement offer. For best results, it's always advisable not to ignore your creditors when you're facing a tough time financially—informing them about your situation increases the possibility of reaching a fair agreement.

Watch SoloSuit pay off one of its customer's debts by negotiating a settlement:

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How it works: SoloSuit is a step-by-step web-app that asks you all the necessary questions to complete your answer. Upon completion, you can either print the completed forms and mail in the hard copies to the courts or you can pay SoloSuit to file it for you and to have an attorney review the document.

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