Here is a great opportunity for you to ask any debt relief or credit related question and receive input from an experienced expert! Ask a question about settling credit card and other types of debt with your bank, a debt collector, or a debt collection attorney. Are you dealing with a debt buyer? Not sure what you are dealing with? Submit your question and CRN will help you with detailed and useful feedback.
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Hi Michael –
I had a GE Captial Gap card about four years ago. I believe the balance was about 1200 dollars. I was contacted by a collection agency once, and responded to them through mail once. After that, I never got any response. I tried contacting Gap directly, left voicemails, and no response. I felt there was no way for me to contact anyone or pay it.
Now, four years later, this is impacting my credit history and me being able to rent a condo. How do you recommend I go about fixing this?
This far into the life of a collection account, I would look to settle this for as much savings as possible, and get the pact that there is zero balance owed on it reflected on your credit reports. Can you look on your credit reports and see who the collector is that has it now (it probably is no longer held by GE Capital)? What is the balance showing owed? And also post what amount you can pool together to offer as a settlement.
Hi Michael.
I am in need of your advice. I have a Walmart GE Capital Retail Bank Credit Card with a balance of 3477. it is now at collections for the third time (it went twice before and bounced back each time). they are telling me that my account is prelitigation and if I do not pay the full amount it will go to an attorney. I attempted to get a loan to pay it only to find out that it has been charged off. I had told them multiple times I want to pay this off, just that the min. payments are too high. they say this will be sent to an attorney in my area (massachusetts). what does all this mean for me and what is by best plan of action?
Jessica – What is the name of the collection agency you are in contact with?
CAC Financial is the name.
The reference to placing the account with an attorney is credible. This could mean you will be sued, but not necessarily. In my opinion, given trends with GE Capital, and the collector involved, I it is likely.
You can settle with CAC Financial for a lower pay off amount, or set up a payment plan they will agree to. Can you raise, say, 40 to 50 percent of the balance and settle? What would an affordable monthly payment look like (consider they are not going to want to agree to something that stretches payments out too far)?
Do you have other outstanding debts? What do those add up to? Are you current on other unsecured debts? What is the total on those?
I am current on all other unsecured debts which add up to about $13,000 (not including this walmart card and this does includes my car loan) I have tried to set up a payment plan and CAC has said they are unable to do a payment plan and they were instructed to get the full amount. they have offered a settlement of 2600 ( debt is 3477) but I do not have anyone to borrow money from nor can I get a loan since I have a charge off on my report
Settling for the savings is the better path. How close can you get to what CAC is offering? I would be targeting roughly 40% to settle this.
If you cannot do it, it just is what it is. You would likely get a good opportunity to set up payments that are more affordable through the court, but that should be avoided if possible. If you cannot get anywhere on this immediately, try them again at the end of the month.
CAC told me that Monday it is being sent back to walmart and then going to an attorney in my area
do you believe they will let me set up a payment plan through the court? I tried to so one through CAC but they refused. should I prepare anything for court? I don’t have funds for an attorney.
Also, when this does get sent back to Walmart is there a supervisor maybe I could try to talk to about avoiding court and trying to set up a payment plan? I’m sure they would like to avoid court too. I will be on vacation away for a week in May and am worried that they will set up a court date for then and I will miss it.
Walmart will not get the account back, but the servicer, GE Capital would. You can try to contact them to see if you can strike a deal before it gets placed for more aggressive collections. The window of opportunity to do that can be small.
You will have to be served the lawsuit. And most attorney collectors will send out one collection notice in the mail.
Jessica – People who participate in the court process are often able to get payments set up that they can afford, but not always. Here are two additional resources for you about dealing with collection lawsuits and judgments:
https://consumerrecoverynetwork.com/question/can-you-negotiate-and-settle-a-credit-card-debt-if-you-are-being-sued/
https://consumerrecoverynetwork.com/question/can-you-settle-credit-card-judgements-like-other-debts-stressed/
and silly question – they have to serve me in person correct? so if I am gone on vacation it will have to wait till they can serve me? and advice for talking to GE?
You will want to speak with an attorney in your state, or refer to your rules for civil procedure, about what would perfect service. It is not always you that has to be physically served. Someone 16 years or older in the household could be served, or even service by publication (in the legal notice section of a newspaper), are a couple of varied ways you could be served in some states. You need to know what those ways are for your state, as they could be different than mine.
When you talk to GE, be ready to make a deal and payment if you are trying to prevent any more collection activity.
1. Okay! I did all those things so awesome!
2. I am asking how to remove them after they are paid and closed, but they are still showing negative marks on my credit.
3. The lien is paid, so I will just wait!
Once the old medical bills that went to collection are paid, and the credit reports reflect a zero balance owed status, it is also a hurry up and wait scenario.
There are some who suggest sending dispute letter after dispute letter when the accounts are not really showing anything inaccurate, out of date, or incomplete. It is a waste of time and stamps for most situations.
Michael! Hi!
So, here is the situation. I am trying to clean up my credit report and raise my score. I have a 1 year old son, and I now need to have providing options for him. So here is where I am at. My score is very poor, most of the accounts are student loans-which did go into default at one time but for 6 months I have been making regular payment-however it still is negatively affecting and I know that that just takes time. Below is really my issues and most of it is just lack of knowledge.
1. I have a mark for LB GRAY LLC for an apartment. I paid the balance with the original lender-the apartment I owed to, and per a fax from them to my new apartment manager the debt was paid in January 2013, however the mark is in collections on my score. I sent the agency holding that debt currently a copy of the fax and a letter requesting the account be closed. So my question is, was that the right thing to do? And, how long should I wait? Should I do anything in the meantime?
2. I have 5, I believe, medical marks for accounts that show they are closed, but they are negative marks on my score. Can I call the agency to have those removed? How do I remove those or change it so they reflect positively? I believe the accounts are held by Eagle Accounts.
3. The most devastating, I have a STATE tax lien (Indiana). Now, I paid on time (it was a small amount for the lien of 110.00$). I have the receipt and proof of payment, but its still on my score. How do I get this off of my report? What steps do I take to remove the lien?
1. I would send a dispute letter via certified mail return receipt requested to LB Gray LLC, and to each credit reporting agency showing this. It is not that you were not sent to collections, you were, but that the debt is paid.
2. Are you asking about how to get medical collection accounts off of your credit report because they are paid, or get them off even though they have not been paid?
3. If the state tax lien shows as paid or resolved, there is not much to do but let time go by. The paid negatives will impact your credit less and less, and will then drop from the credit reports.
There is no quick fix to recovering credit that went south due to financial setbacks and collections. Time and smart moves to reestablish credit are your best tools.
I have a card with GE Capital and my balance more than doubled due to the end of a promo on my account. I wanted to settle the balance but they said I wasn’t eligible for any of their programs. I’m wondering if the only way to settle is to let the bills go until a third party gets involved, or am I better off just paying the $850 balance. Please advise, thanks!
Camilia – Do you have the ability to pay the debt today? If you have the choice between paying or not, paying is better if you are not more than a few months behind. Otherwise… yes, you will often need to be late enough with payment to GE Capital for them to place the account with outside collectors before a good offer to settle would be available.
Dear Michael Bovee,
I see your video on youtube which is talking about debt settlement and getting feer information about it at your website. I currently have $20,000 credit card debts with 5 cards (American Express: $3,300 + Bank of america : $4000 + Chase 3 chards : $2300+ $3200+ $6000) I aslo have checking account with Chase. As of today, I never miss any payments, and my credit score is excellent.
My story: I am undergrad full-time students as well as a full-time worker with $11 per hour. My income mostly cover my mortgage, car, utilities, and food. Soon, i cannot afford the minimum payment of more than $500 per month (for all credit cards). Currently, i have saved up to $4000 cash on hand and i want to make a settlement with all my 5 banks (total $20,000).
My question:
I understand that after i stop my minimum payment on my 5 credit cards, there will be late fees + interest will add up together, and i will owe higher amount that i see right now. Do you think $4000 is reasonable amount to settle for all 5 cards with total $20,000 ?
What is your opinion about how much should i have on hand to settle all my cards?
Within 180 days, when is the best time to make settlement? is the 4th or 5th month best time to do settlement?
Within 180 days, how much (or at what percentage of money) should i have to settle with them?
Is it reasonable for paying 30% of what i owe within 180 days with American Express, Chase, and Bank of America?
After 180 days, there will be an charge off. What if, within 180 days, they don’t do settlement, what should i do? My target is to do all settlement with original creditors (chase, bankofamerica, AX) for all cards within 180 days. What is your advice before i do settlement?
I currently have the car that i am paying monthly. I didn’t miss any payment. Do they (credit companies) can take my car away from me ?
In your opinion, what should i do before i am going to stop paying my minimum payments for all my cards?
Please help me.
Thank you so much for your time to read my financial problems.
Thanks
Leo
Leo – Using 4k to settle 20k total of debt is 20% and is not a realistic expectation. Current trends with Chase mean settling at 35 to 40% (more than likely). Bank of America can settle for under 30% if the situation is right, but you have not shared anything that suggests to me the lower end of BofA settlements are within reason for you. Amex may/may not settle with you. If they do, it will likely be after your account is placed with a debt collection agency, and for between 40 and 60%.
Your best efforts at negotiating with this list of creditors for the best savings (other than AMEX) will be in the 5th month of your late payments, so between 150 and 180 days late. There are exceptions to this, but that time frame is a good rule of thumb.
Your car is not at risk from these creditors, or later collection agencies, when you still owe money on it, and perhaps not even if you own it outright. In any case, they would have to sue you first.
Before you proceed with your plan, I recommend you start reading through the debt settlement section of the debt relief guide. Follow through the entire first section from page to page. Post questions along the way in the comments.
Thank you for your reply.
Thank for answering all of my question.
Taking your advice, I already find my way to pump up the amount to $8000 in hand for settlement all my cards with $20,000 balance.
– Hopefully i can survive this settlement within 180 days.
AMEX is the creditor that i am concern because i heard that AMEX is difficult to make a settlement with them.
Thank you for your advice. Thanks so much
I am planning to negotiate settlements for about $60,000 in unsecured debt. Based on my low income (200% of federal poverty level), my willingness to sustain credit rating damage, and my access to funds, I think I am the ideal candidate.
I have done quite a bit a reading and I understand that now I must stop making payments on the CCs. I have a few questions about the timing, since all my accounts have been in good standing for years.
1. Is there any advantage to asking for forbearance in anticipation of default, or does that just delay negotiation?
2. I am at least 90 days from the ability to begin negotiation, and I believe I will need some professional help with some of the accounts (because they are large and with difficult bank negotiators). Since I am at least 90 days from the ability to begin negotiation, does it make sense for me to delay enrollment with your company until it is time to play ball?
3. Is it necessary to default on all CC accounts? Can I continue paying one that I think is within my means? And will I be able to keep a CC account that has a -0- balance and a high credit limit during this process, or is the CC company likely to close or freeze that when they see what is going on?
Susan – Congrats on being so methodical with your research and questions.
1. Forbearance is the sense of unsecured credit card debt has its place in very unique situations. Offering up a single month payment to delay charge off with a creditor that is known to sue a lot at that time is one way to buy time for a strategic purpose. Enrolling a couple of accounts in some type of hardship plan after 4 or 5 months of missed payments can also make some sense depending on your list of accounts (looking for small regional credit unions here). But generally speaking, asking for, or enrolling in special programs will not serve a strategic purpose for most peoples situation.
2. I shut down debt settlement services and direct from CRN one on one coaching last June. But you can contact CRN specialists directly and work with one in the same way CRN has always worked with our members. Just complete the contact form in the right side bar of any site page. I would recommend you speak with a specialist now, even though you are not ready to negotiate the settlements. There are reasons to communicate with your creditors this many months before any meaningful negotiations begin.
3. You can definitely keep cards open that have a zero balance. Just do not use them at all while going through the negotiation and settlement process. There are reasons to not include some accounts in the settlement program. Smaller balance are a good example. See this post for more about that: https://consumerrecoverynetwork.com/keep-credit-card-open-when-settling-debt/
Greetings Michael,
On March 10, 2014 I paid the judgment in full (12,464.75) to a law firm in
Lubbock, TX for Citi Bank (South Dakota). Before I send the amount I advise
The Law Firm I was sending the full payment in lieu with a written statement
of release of judgment. Presently, the debt collection department is stating
4 – 6 weeks for them to mail a notarized receipt of payment to the county clerk
office for release. If I am correct the Status of limitation in Texas is 4 years
on a credit card debt. Does 10 years hold true for a judgment of character, although amount
has satisfied the judgment? The payment was a certified check with a letter stating
request of full release along with several phone calls to the creditor’s attorney detailing my concern.
The law firm is procrastinating on forwarding the satisfaction document to the court. Please forward
names of attorneys to whom I can contact to pursue my next attempt of the getting the judgment off
my homestead?
Thanks GD
GD – If you paid off the judgment amount 2 weeks ago, it is fairly common to have the law firm schedule that work flow a few weeks out. I do not think 4 to 6 weeks is a great time frame, but it is still within reason based on my experiences. I am happy to send you contact details for attorneys with debt defense experience. Are you also in the Lubbock area?
Hi Michael,
Thanks for your site, very informative. First off, a quick brief on my situation. I’ve accumulated approximately $45,000 of credit card debt due to high medical bills for my kids, my wife transitioning her job, and procrastinating about dealing with the mounting debt. Fortunately the medical bills are being paid off slowly (two accounts are now paid off), my wife’s income will be stable in the next few months, and I have “excellent” credit and dependable income. I believe my best option is to “consolidate” my debt vs. “settle”. I think the Debt Rollup could be a good option, however I feel it’s better to consolidate my debt at a lower rate now because the Debt Rollup method could take some time.
I had a follow up question based on one of your videos on Debt Consolidation. I understand your first caution of consolidating debt and paying off credit cards, but then not having enough dependable income so having to start using the credit cards again. But you also cautioned about which debt consolidation agencies to use because a lot of them will want to “settle” your debt rather than “consolidate” your debt because that’s how they make money.
So, I’m wondering if you could recommend a couple agencies to use? Or alternatively, would I be better off to just go to my local B of A or Wells Fargo and try to establish a debt consolidation loan through them? Because do debt consolidation agencies even provide consolidation loans or do they just refer to other lenders? Or how about Prosper? Where I can find the best rates?
Thanks!
CN – What are your credit scores currently? What flexibility is there in your monthly budget (whats left after all bills and necessities are met)? Add up all of your rates across unsecured debts, what is the average interest rate you pay?
Hi Michael,
My current Experian score is 774…I haven’t checked the other two recently. In regards to flexibility in my budget, I’m still figuring that out. But to start, I’m paying about $350 per month in minimum credit card payments; and I’m hoping I could pay an additional few hundred dollars toward paying down the debt. The average interest rate I’m paying on unsecured debts is 13.55%.
Thanks,
CN
CN – You would be considered prime for lending purposes if that is your average credit score. You would not have much trouble consolidating. But getting a competitive rate to make it worth the while is the first order.
I may not be clear on your situation. Is the 45k debt you refer to mostly in the form of bills owed to medical establishments, or is the 45k consisting mostly of credit card balances? The 350 monthly minimums is too small for 45k balances.
Thanks Michael. Sorry, should have better clarified the debt situation.
The 45k is all credit card balances. And you are correct the 350 monthly minimums is low because one of the cards (with about a 17k balance) is currently 0% interest, but that offer ends next month so the minimums will jump to about $530/month.
Then on top of that we’re paying an additional $350/month in medical bills that are setup on payment plans. Fortunately those are 0% interest, but still a fixed monthly expense.
Assuming debt consolidation being the best option, what are your suggestions for finding the best rates? Local banks like B0fA and Wells Fargo? Online like Prosper? Others?
Thanks!
CN
CN – Thanks for the clarity. 10 years ago you could throw a dart blindfolded and hit a creditor offering consolidation loans for your situation. After the recession hit, that type of consolidation was pulled back significantly and has not returned in any real meaningful way.
I am not sure the interest rate benefits from Prosper or Lending Club will be enough of a benefit given your average rate of 13-ish percent. But that sounds like it will change when the intro offer you have on the larger credit card expires. Lending Club has a higher loan limit than Prosper (last I looked). You also have the opportunity for debt consolidation with Wells Fargo or Bank of America. Do you bank at either today? If not, where do you bank, and have you asked about any consolidation loan products there?
If you do apply to more than one lender to see how competitive you can get rates, try to do that all at once (in the same week or so).
It would be great if you posted updates about your progress. I really should move these comments to the debt consolidation section of the debt relief program, and may use this comment thread as an excuse to take the comment moving plugin I installed last year for a spin 🙂
Thanks Michael. I bank at BofA and called them and sounds like they don’t offer a product for debt consolidation. I also called Wells Fargo and they do, so am planning on stopping by in person to my local branch.
Happy to keep you updated with my progress, and to be used as an excuse for you to use your moving plugin 🙂
One last question I thought of; if I were to establish a debt consolidation loan with any of these lenders, do you think it would negatively affect my credit score? Or hurt my chances of purchasing a home in the next two or three years? I wouldn’t think so because I would be decreasing my credit usage.
Thanks!
CN
CN – I do not think this approach to debt consolidation will hurt your home loan goals 2 to 3 years from now at all. In fact, using the best path to paying down debt and improving your overall debt to income now, is only going to help you in those efforts.
Hi Michael,
I had a credit card that was charged off and sent to collections, and I paid it off in full (monthly payments were set up) last Nov. 2013. I also had another credit card with my bank that was closed/revoked (never got charged off) and I just finished paying that card off in full (monthly payments) today! I had a third credit card with another bank I bank at that was charged off and sent to collections. I haven’t made any arrangements to pay this card off, as I’ve been focusing on getting the other two cards that I previously mentioned paid off. I do plan to pay this third card off in full, but I don’t have a set date of when. Having given you all that info, I’m writing you because I’m really wanting to get another credit card SOLELY for wanting to build my credit. I just want to have one to make small purchases with and pay it off in full each month.
My question to you is, how likely is it that I’ll be approved for a credit card at this point? For months now, I’ve been getting credit card offer mailings from Capital One, saying that I’m eligible for a Capital One Platinum MasterCard. I didn’t see anything in the letter stating anything about this being a secured card, so I’m assuming this is an unsecured one. There is no annual fee, o% intro APR until 2014, and 22.9% variable APR after that. I’m just unsure if this is something I should take advantage of or not. I know that when you apply for a credit card, it dings your credit score some. So if I end up applying for it and don’t get approved, that will have been for naught. Another credit card option I was considering is applying for a new one with the bank I bank with (the one that I just finished paying off in full today). Their unsecured credit card has no annual fee, 0% intro APR for 6 months, then 10.24% to 20.24% Variable APR. Their secured credit card has a $49 annual fee and 18.24% Variable APR.
Should I try applying for any of the cards I listed above? And if so, which one would be best? Or are there other good cards you know of that I should look into?
Thanks in advance for your suggestions on this matter.
Best,
DMG
DMG – How long ago was the credit card you still owe on last paid? How much is owed on that account? Who is collecting on it now if not the bank?
Capital One does indeed fill a void by offering and approving new credit cards to people with collection accounts (paid and sometimes unpaid), and lower credit scores. They fill a void left by sub prime credit card lenders that shut down several years ago.
Do you know what your credit scores are? Is the collection account you reference the only one out there unresolved?
You can use your debit card like a credit card for a while more, until the other account is resolved, or get the secured card with your bank if Capital One declines you. But depending on what your answers are to the above questions, my hunch is that CapOne would approve you, even if only for a lower credit limit.
Hi Michael,
The last payment I made on the credit card I still owe on was on Oct. 2011. The amount owed on the account is $4, 846.52. As for who’s collecting on it, it’s been through a couple of collection agencies, but right now it’s with an agency named MRS Associates. I honestly don’t know when/how soon I can resolve this account. Do I need to resolve it before applying for a credit card?
I don’t know what my credit score is, as I’ve never ordered it due to having to pay for it. Is there a way to receive a legit credit score? I’ve only ever requested my credit report—one from Equifax back in June 2013, and one from TransUnion in Dec. 2013.
Aside from the charged off account that I owe $4,846.52 dollars on, I have student loans (currently in forbearance) and two medical bills (one for $492 that was placed for collection in April 2010 that shows up on both the TransUnion and Equifax reports, and the other for $580 that was placed for collection in April 2010 that only shows up on the Equifax report for some reason). I’ve never before received collection letters from any agencies about the medical bills, nor has anyone ever contacted me about them. They’ve both been just sort of stagnant, I guess.
Having said all this, do you still think it’s okay for me to apply for a credit card? If so, which card that I mentioned in my previous post do you believe will be best at this point? Also, how badly is your credit score dinged when applying for a credit card?
Thanks for all your help.
Best,
DMG
DMG – It is possible you would get approved for a Capital One credit card with a low credit limit. You would increase your odds by resolving the debts. You can settle these old collection accounts for less than the balance owed. Paying the full amount is up to you, but you would not likely get a better credit score bump by paying them fully vs settling for half or less the amount owed. MRS Associates settles debts for less regularly.
Credit inquires from applying for credit cards can drop your score a few points. If you start hammering the credit applications it can impact the score more. But each credit profile is different.
Hi Michael,
So between applying for a new unsecured card with the bank I bank with (I had a closed credit card with them that I just finished paying off in full). that has no annual fee, 0% intro APR for 6 months, then 10.24% to 20.24% Variable APR, or applying for the unsecured Cap One that offers no annual fee, o% intro APR until 2014, and 22.9% variable APR after that, which do you believe is the best way to go? Does it seem like I’d have a better shot being approved with one over the other? The bank credit card obviously has better incentives/rates, but I’m just not sure they’d approve me for another card after having closed the first one (even though I’ve now paid it off). I’m nervous about being rejected and having the application inquiry ding my credit score.
Also, as I mentioned in my other post, I’ve never gotten a credit score before. I know Credit Karma says you can get a free credit score, but do you know if that company is reliable? Is it best for me to just pay to get one from one of the 3 major credit bureaus? And should I find out my credit score before even applying for a credit card again?
Thanks,
DMG
DMG – My assumption is that you are getting the new credit card as a rebuilding tool first, and the utility function second.
If you are worried about approval, you have a better shot at the Capital One card given what I have seen recently. But taking a shot at the other one, and being turned down, will not hurt your credit all that much. And I do not think that application will be the sole reason Capital One would turn you down if your bank does not approve you.
If you want an accurate credit score you should pay for one from one of the three majors. If you want to work from a free one, I like credit.com and their credit report card more than any other similar product (like credit karma etc).
Hi Michael,
Thanks for your advice. I’m thinking I’m going to try for my bank credit card first since their “rates” are better, and if I get rejected, then I’ll go for the Capital One card. I just got another offer in the mail from them earlier this week (I’ve been getting one like every month for quite a while now, so I’m thinking my approval chances are pretty good).
I will also check out credit.com in regards to the free credit score. I’m always unsure about sites that claim to be “free,” so thanks for some reassurance.
I will keep you updated on the outcome of my credit card application.
Thanks again,
DMG
Thanks for keeping this updated DMG.
Credit.com does have paid stuff for credit reporting, monitoring, new accounts etc. But there free one is just that… free.
Hi Michael, I am behind on some credit cards thats taking a toll on me which are in my name. I am embarrassed and ashamed that it has gotten this far but due to changes in our finances; I neglected to take care of my bills. They are in collections and the total of debt is about $30 grand. We have a mortgage but are current (never missed a payment) and he is current on all his obligations. He is active duty with top secret clearance so I’m not sure if this will impact his career; I am hoping it doesn’t. I have been in contact with the collection agencies who are trying to collect and been asking for validation of debt so I can buy time to gather up some funds. The other day I received a letter on intent to sue from a debt collection law firm. I need to know if bankruptcy is an option for me or if you have other suggestions and how this will affect my husband. I don’t want to go this route because I don’t want to lose our home because of my stupidity. Please help. Thank you for your time and assistance.
Ace – You can settle debts one at a time, rather than waiting to have money saved up to settle all of them. How much is the balance on the one the attorney is contacting you about? What amount of money can you pool together to settle this account? How long will that take? Who is the attorney collecting for?
As far as bankruptcy, it is possible to file separate of your husband. Are you near or on a base?
Michael, The law firm is Hunt & Henriques. The balance according to the letter is $4402.72. I can pull $1500 in about 2 wks to see if they will accept that settlement amount. What do you think? Also, yes we are near a base but I want to avoid going that route if possible. Thank you.
Ace – My feedback can be impacted by who Hunt and Henriques is working for. But they do sue, and regularly. 1500 settlement on that balance is not all that likely at this stage of collection. I see some options for dragging this out to buy time to save more, settle at a better rate, or even win if they do sue. But that would depend on their client (and on you too).
Let me know who they are collecting for and lets go from there. Also, are any of the other debts placed with local attorneys for collection?
Michael, in the letter it states their client is Portfolio Recovery associates, it’s regarding a GE Capital Retail Bank (a gap credit card); I assumed GE sold off debt to portfolio?
Thanks ace. I would realistically target 50% at the low end for a settlement today, given the circumstances, and the players involved. But start lower in your negotiations, and hit the military family concerns. If you cannot come up with the extra money to settle, it is what it is. If Hunt and Henriques sues for PRA, post an update. There are some reasonable cost options to look into that could still possibly help you avoid bankruptcy.
I would suggest talking with an experienced bankruptcy attorney too. Most offer a no cost consult. Perhaps Jeremy can refer you to one he knows nearest you. Just because you talk to one does not mean you are filing.
Thanks Michael. I will see if I can pull funds for half. Do you have referral for an experienced bankruptcy attorney in my area? I am in Oceanside, CA. Just want to make sure I have other options along with any other reasonable cost options you can give me. Thank you for all your assistance.
ace – You can reach a BK professional at 877-278-8117. You can also search http://www.nacba.org (National Association of Bankruptcy Attorneys) for a member attorney in your area.
Hi Micheal,
Yesterday I was checking the status of my MI state income tax return and saw that it was garnished, it was under $200. Today I received a disclosure that Cach Llc placed the garnish with the state against a 1849.00 debt. The only company reporting a past due balance on Credit Karma was Capital One, it was $485.00 report 01/2014. This is the only thing I can think of it would be regarding. But the balances don’t make sense, can they legally inflate it that much? What recourse do you think I’d have? Is this even legal without some sort of advance notice, summons or legal work? I believe the last activity on this account was sometime in 2009, if it’s even about this issue. If I contact Cach Llc, would it restart the SOL clock? I’m worried they may go after my normal bank accounts, from what I’ve read about them. Thank in advance for any suggestions or advise you might be able to offer.
Steve
Steve – I would contact a consumer law attorney that specializes in debt collection issues about what is happening here. Based on what you shared in your comment, something is not right. Post the name of a nearby larger city in Michigan. I will email contact info to the type of attorney you will want to consult with. Most offer a no cost initial consult.
Hi Micheal,
I’ve gone some stupid money management issues and urgently trying to fix them. I have a GE Capital/old navy card with a balance of $1950, it’s currently 161 days past as of today. I’ve tried settling with them late January but unfortunately I didn’t have the money to settle. Now Ive saved a 50% lump sum payment and I’ve tried for the last month to settle and every time they say ” Settlement offer is not available on your account” How do I get back to a settlement time frame. I’ve heard everything from wait till the 179th day and try again all the way to I should make a payment that brings my account within 150 days (similiar to late January settlement)Time frame so that they see I’m trying and then they’ll be able to settle.
I did settle with Chase in early January; though it was them that reached to me and I agreed.
What’s your advice in dealing with GE/old navy?
Tina – Settlement with GE on the Old Navy account could happen anytime between now, and their charging off your account, then dropping it in their collection pipeline (which can also happen anytime, and generally before your account is considered 180 days past due). If it were me, I would keep at them every 5 or so days. If I could not lock up a deal and complete it with them, I would wait to hear from the collector they place the debt with for collection (or who they sell the account to), and then negotiate and settle with the third party. 50% is a good dollar amount to be prepared with to settle, but I think you can come in a bit under that based on trends I see, so consider starting a bit lower.
Thanks so much for the quick reply Michael I truly appreciate it!
I wasn’t too sure on the time frame to settle or what percentage to settle for once it went to collection agency. I settled my chase account for 67% then later found out I could have gone lower. So thank you for that advice. It’ll save me some money if I can start at a lower point Would 30-40% be a better starting point?
Also what have you heard about settling with USAA? I have 2 cards total $19,000 160+ days and will be in charge off within the next 2 months. I know that there’s a high probability that my membership will be reduced or closed all together and that’s fine. Have you heard whether they are a simple or complex bank to settle with?
Tina – I would target settlements with GE on the Old Navy account at 40%, but have seen some come in between 30 and 40.
I have not found USAA to be as difficult to settle with as other large credit unions. I would target them at under 30% if there are severe, and documented hardships. If just a tough financial patch, I would target settlements with USAA at about 40%. The big question here will be what other accounts, insurances, and loan products you may have with USAA other than these credit cards? That answer could change things a bit.
Hi Michael
My husband and I are set to close on a coop purchase (401k loan,no mortgage,buying from a family member).When reading through the sample contract of sale,it says we as purchasers must provide a judgement and lien search to seller before closing.
The coop did an extensive background check with lexisnexis and some judgments against myself showed up.I resolved those issues(except one-pending case -no judgement )(that is another question I will ask you about in a bit)and the coop approved us finally last week.
It wasn’t easy because of poor credit history but we did it.
I purchased an identity guard service for myself and my husband last week and was surprised to see a judgement for 4000.00 from 1996.It was filed in august,1996, according to identity guard court records section.it shows up under both our names.
But we declared bankruptcy 3 weeks earlier.We had our court date for bankruptcy hearings in July 1996-that shows up in identity guard as well. And I am sure the debt had to be included in that process .But we do not know who the creditor is and can’t find it on nys ecourts at all.We also moved that month as well .
We never received any notices or were served any papers in regards to this and I was shocked to see it last week,especially since it never showed up anywhere before.
It is not on our credit reports and did not show up in coop financial check, I am so nervous it will show up in the judgment and lien search.I know that it is meant more for the seller to make sure they are clear and we do not have a lender to worry about.But it is in identity guards records under court filings.How should I handle this ?Will it show up in this search or is this search purely for checking out the seller?We did not use an attorney for any of this sale ,so I don’ know how to handle this.
We have to call the coop this week to set up a closing date and am so afraid it will all fall apart at the last minute.The amount owed must be huge now and I can’t possibly pay it off before closing.We paid off everything that showed up to get this approval.please let me know what you think,I would really appreciate it.
PS I do not have my bankruptcy papers-we lost them in hurricane sandy and I am afraid to even disturb this nest as the judgment limit runs out in a little over two years.
Thank you nancy
nancy – You need to run this all by an experienced consumer law attorney, like can be found at http://www.naca.net. My thought is that the judgment would be considered part of your 96 bankruptcy, so not able to impact you today in the ways that are concerning you. But I am not an attorney, so talk to one and remove the angst you are feeling.
Hi,
I’m looking for your expert advice on my situation. I’m looking to get a home mortgage loan in Spring 2015. My current credit score is 548 pulled from Experian and my goal is to reach 650. A few days ago I did a “pay for delete” that will wipe off 5 negative accounts entirely from my credit history (Each of these accounts were medical in collections and were a few years old totaling $1000). I currently have 13 defaulted accounts including the 5 mentioned above. 4 of the negatives are student loans through the Federal Government. I consolidated those last month, and that is still in process. My understanding is that all 4 of these will be listed as settled and turn into 1 “in good standing” account through my consolidation lender. This will leave 4 negative accounts. Two of the negative accounts were opened February 2008 according to my Experian report. I assume they will drop off in February of next year (the 7 year mark). Is that correct? If not, how can I tell when they will drop off? They are both charged off accounts. One of the accounts was Capital One and led to a judgement being issued, and that court judgement is on my credit report. The Judgement was filed 8/11/2011. The other two negative accounts I will pay in full in the next month. They total about $1000 and are only a few years old. My main questions:
How feasible is it to get my credit score raised 100 points in 1 years time?
Do you think the two negative charged off accounts I mentioned above will actually drop off in 2015?
What do you advise I do to help get my credit in the right place?
Stephen – The negative credit reporting collections will typically drop off of your credit reports within 7 to 7.5 of the date of first delinquency, not the date the account was opened. When did your first payments get missed? Do the credit reports you are viewing provide a date the negatives are set to me removed from their respective reports?
How much is the judgment balance as of today (may be higher than what is appearing on your credit report)?
Settling the other two accounts for less than what you owe is often going to have the same credit reporting impacts as paying them in full.
I do think it is possible to see a fairly dramatic increase in your credit score given all that you shared. The student loans going from negative to positive on your reports several months from now will be great. Do you have any open accounts that are showing as positive on your credit reports right now?
All things considered, if you resolve all the collections, have some positive, or ad some small ones now, I like your chances. But even if you fall short of conventional financing, if you meet FHA home loan standards and the CFPB’s new ability to repay rule, you could qualify through the FHA for a home loan.
I can offer more detailed feedback if you post a comment with answers to the above questions.
Thanks for your response. I don’t know the exact date that those 2 accounts went into delinquent. I had just turned 18 at the time and I was very careless, so I would assume I didn’t make more than a few months payment. The accounts were most likely delinquent by May 2008. The judgement balance is $1600.00. Do you advise that I attempt to pay this?
On the other two negatives, I will attempt to settle those but will consider the option of paying in full if that’s what it takes to delete the accounts from credit history all together. Will that give me more benefit?
I do not have any current open accounts in good standing. I’m not sure how to obtain any with my credit in the current state it is in. Any suggestions there?
Thanks again for your help
Hi there-
Looking for some helpful info. I have a GE Capital Retail account that is in collections. I called and spoke to a rep at the agency, and was offered over the phone a settlement offer of approximately 45% of balance due. I had done my research before calling, and told them I was willing to work with them, but wanted a letter in writing from them detailing the terms of the settlement offer, and releasing me from further liability. They refused, saying that GE Cap Retail doesn’t do settlement letters.HUH? I have been in business for myself, dealt with attorneys and such and ANYTIME there was a settlement offer, there was paperwork detailing it. What do do? Everything I have read tells me that if they aren’t willing to send a settlement letter, they are being tricky. What are your thoughts?
Erin – Check out this report, and the many comments exchanged about getting settlements documented, and setting up payment for a date far enough out to get the original creditor like GE Capital to kick loose a letter prior to payment date.
Hi there, I know I asked a similar question in a feed, but I can’t find my original inquiry. I am wanting to pay my debt in full to Cach LLC (but it is with an attorney’s office). They originally told me that they DON”T report to the credit bureau and that I would I have to do it myself. I found that odd. So my question is: How do I go about this? This is the only collection agency that I felt uneasy about. If I offer to pay them in full which is around 1700 do I ask for the letter first and what should it say? I have had such a bad/horrible experience with them. Also, I read on-line forums that it can be particularly difficult if I were to personally report it myself. Is that true? I also asked them if I could call Cach and they said that they can’t release their client’s info. So I’m confuse on how to approach this. If you could give me some insight (which you always do) that would be helpful. Thank you.
Jennifer – The attorney cannot do anything about credit reporting themselves, as collection attorneys are not the ones reporting. Cach LLC has an obligation as a furnisher of information to the credit reporting companies, to provide accurate, complete, and up to date details. If you pay the debt off, look for your credit reports to be updated within 60 days of that. If the report is not updated to show paid and zero balance owed, it is something you can get fixed yourself. Wherever you read about that process being difficult is probably dated, or not all that experienced. It has become increasingly simple to get those updates, for a situation that you are describing, done yourself. You do want to be sure you get any payment you negotiate, whether in full or as a settlement, documented before paying anything.
If it comes to needing to get your reports updated later, post a comment update and I can offer feedback from there.
My wife recently received a summons for a citibank card that she owes 7500 on. She works only part time making about 150 per week. The card is in her name only. Is it possible to settle for a lower sum at this time and keep this out of court? If so, what do you recommend we start off with? Her court date is on the 16th. Thank you.
Tony – It is possible to settle this out of court. How much can you pool together in order to fund an agreement?
Thanks for getting back to me so fast. We can probably scrape together around 40 to 50% of the total right now. I would like to keep it out of court if we can. But she has a part time job, at best, and has really no assets in her name. Just curious to know what they can do as far as judgements go? Thanks again.
Tony – It is possible to settle when sued for 50%. The fact that her income is only 150 a week would be a supporting factor in their settling for that. If you are trying to avoid a judgment you will want to be prepared to fund that settlement in a single lump sum, and get the agreement documented first.
As far as what they can do to collect on this if a judgment is entered in the court, it varies by state, and your situation. What state are you in?
There are good details in this article about settling judgments.
We live in Missouri. I had lost my job a few years back. I am employed but not making as much as I was before. My wife has worked part time for a while now because child care is so expensive and it worked for our schedules. We do have enough for a lump sum but can’t really afford to go over the 40 or 50% number.
We offered 3000 and the company did not take it. I am not sure what more we can do at this time. I will probably counter with 3200 and see what that does.
Tony – Sometimes you have to create a better foundation for why a collection attorney would settle for less, or for the most savings. As far as they are concerned, at least at this point, they are going to get a judgment against you. If that is the way the file looks to them, they will go that route and look at payment and settlement after they have something legally enforceable. In other words – They bothered to start the legal process, and are most often going to see that through, unless you give them a reason to view your file differently than how roughly 90% of collection suits are viewed. See this post about settling when sued for more details on this.
Post any additional questions about this particular issue in the comments of that page that is dedicated to the topic once you have read the Q and A. There are about 800 comments there to glean details from as well.
Hi, I just got served papers from the court reguarding a 1600.00 citi bank credit card debt. I got the card in 2008 and lost my job shortly after. I’m not sure what to do I want to pay it and possibly settle it before the court date. This paperwork didn’t even come to my house. It went to my sisters which I have never resided it. I live in PA. Is it possible that if I settle this before the hearing that I won’t get a judgement against me? The court documents must be returned to the court house within 20 day from today, then I’m assuming they will issue a court date. I plan on settling this on the 19th of December when I will have the funds.
Nicky – You can settle a debt at this stage of collection and avoid a judgment entry. If you miss the court filing deadline you do risk the case progressing. Getting the deal negotiated can be accomplished by calling the attorney debt collector next week if you want to get a jump on it.
See this post and the many comments for more information and tips: https://consumerrecoverynetwork.com/question/can-you-negotiate-and-settle-a-credit-card-debt-if-you-are-being-sued/
Michael, can you please give me a name and phone number of a lawyer in Los Angeles, CA that can represent me againts the Law Firm Lang, Richert & Patch.
Thank you
Mike – I sent you an email with contact info to an attorney with experience defending against collection suits brought by Land Richert and Patch.