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You can ask just about any debt and credit related question here and get a dedicated reply by email. This is not published anywhere on the site. Sometimes I reply with questions of my own before I can offer actionable feedback.
Hi Michael,
I really want to start apartment hunting and I know that credit scores can play a big part in if you get approved or not. I have quite a few questions below for you and hope that you can advise each one….
-Which type of score (FICO, Vantage, etc.) do landlords look at when running a credit check?
-I have a credit card with Capital One, and they provide a credit score tracker. According to the tracker, I have a score of 616. I then checked my Credit Karma score and it shows a Transunion score of 673 and an Equifax score of 669. Why is the scoring between Capital One and Credit Karma so different? Which one is more reliable?
-Should I get my FICO credit scores from each of the three bureaus themselves?
-I had a Chase credit card that was charged off in June 2012. I received a 1099C at the end of January 2015 for a cancellation of debt (occurred 10/22/14) with the Chase credit card. I filed the 1099C with my taxes in March 2015. The amount of debt I had on my Chase card (approx. $5,000) is still showing as being owed on my credit report. I was under the assumption that once you get a 1099C that the debt you owed would change to “$0 owed” on your credit report, as the credit card company is no longer trying to collect from you. However, I called Chase today to discuss this matter and was told that the amount that was cancelled will remain on your credit report until it is paid in full or settled for a certain amount–and only then will the amount finally show “$0 owed.” I’m concerned that the debt amount showing on my credit report (approx. $5,000) will affect my credit score, thus ultimately affect my chances of being approved for an apartment. Do you feel it would be best to pay the full amount or come to a settlement with Chase? If I don’t do either, how long will this $5,000 amount stay on my credit report? All the other delinquencies/charge-offs I had have been paid and now show that I owe $0. This Chase credit card is the only one that shows as me still owing money. Pls advise.
-As of now, I only have one credit card–Capital One Platinum MasterCard. I got this back in May 2014 in order to start rebuilding my credit. It started with a $300 credit limit and in November 2014 it was raised to $3,300, which is where it still stands. As this is the only credit card I have, do you think I should try to get approved for another one as a way to continue to build my credit and score? Should I try to reactivate a Macy’s credit card that closed years ago because I hardly used it? Or should I just stick with the one credit card I have now?
Thanks, Michael. Looking forward to hearing back from you soon.
Best,
DMG
There really isn’t just one score available through FICO and Vantage. There are scoring metrics that get granular to a financial product (like a home or car loan), and there are scoring and measuring products particular to rental and leasing companies. The larger the management company and properties, the likelier they use a modified scoring and approval process. You can ask a company with report they may base their approvals on. And if you are declined based on how you appear on a credit report they used, you of course have a right to know.
I cannot know which one is more reliable. I do know that credit karma can be off by quite a bit though.
Before getting your scores from the credit bureaus (paying for them), have you reviewed your reports for being completely current and accurate?
As far as Chase goes, yes, it is impacting your credit and/or your ability to attain credit approval. You do not yet know if it would prevent you from attaining a rental contract. You could possibly submit a written explanation of the 1099c etc. to the property management company. If you determine that the Chase account is indeed holding you back from reaching your goals, I would settle it if it were me.
That Chase account will be there for up to 7and one half years from the date you stopped paying them. How much longer do you have to go?
Given what you shared, I might try to get moved and settled in to a new apartment before I look for other credit that will cause some hard pulls. But my opinion here could be adjusted the more I know about a persons situation.
Here is more about obtaining a rental with with credit.
Hi Michael,
Thanks for the quick response.
Yesterday, I signed up for a $1 trial period (7 days) with Experian where you can view your FICO credit score and report. My score is at 641 points. On the Experian report, I had to dispute one listing that shows a Citibank (Sears) credit card balance of $2,041 and the payment status says “late.” However, I paid this amount in full to a collection agency back in Oct. 2013, so the listing should be updated with zero balance being owed and closed. The Experian representative said she submitted the dispute and I should hear back within 30 days with an update on the matter.
I would like to see what my Transunion and Equifax FICO scores are, however, that will cost about $15-$20 for each, I believe. For now, I’m thinking I will just order either a free Transunion or Equifax report, since it’s been over a year since I got one from either bureau. I don’t want to get both at the same time, so whichever one I don’t get now, I’ll get in December to space them out properly.
As for the Chase card I mentioned in my initial post, the last time I made a payment on that card was Sept. 2011. So does that mean the Chase listing will remain on my credit report until 2018? If so, that means I have another 3 years left. With that, do you think it’s best for me to go ahead and settle or pay in full the $5,000 balance in order to get the balance updated to zero dollars with a “paid” status? If I go the settlement route, how much should I ask to settle for? Hopefully it’s significantly less than $5,000.
Thanks for your help. Hope to hear back soon.
Best,
DMG
Based on the dates and information you provided, I would expect the Chase account to drop off your credit reports between September of 2018 and March 2019.
If it were me, and I had the money to settle with Chase, and thought that it would help me achieve my near term goals, I would settle. I would target between 30 and 40 percent realistically, but it is possible to get lower given the circumstances.
Hi,
I have a VS Credit Card. My limit was very small and I had used it for holidays and gifts and things, but every time their fashion show came on they would raise my limit and interest rates without my consent. They also would raise it just because some new apparel item came out. I told them that since they wanted to keep raiding my payments from what they were and I continued to pay my usual balance and they ended up having a problem with it. And I haven’t paid in a couple months, mostly because I am a full time college student, in medical school and don’t have time to work. And I have no family or anything to help. How can I stop this? Its not much money (maybe 2000) all because they tacked up my bill because of unauthorized limit increases and increases in interest because of the limit increases. I have not approved for them to do any of this. Please help.
Is this something where Victoria Secret is sending you new items without your having placed the order?
As far as the interest rate increases, when did that first happen? Due to the Card Act, credit card companies cannot arbitrarily raise your interest rates. But they can once you miss two payments. Is that what happened?
Michael, Lynn, thank you for your input.
The notice I received;
ORDER VACATING NOTICE OF LACK OF PROSECUTION
This cause having come before the court and the court finding that
ten months had not elapsed since the filing of a pleading in this case and therefore
the Notice Of Lack OF Prosecution was entered in error, it is thereupon
Ordered and Adjudged…that the Notice is hereby vacated of record and shall be
of no further force or effect. – Had I known then…that I needed to petition the court
for dismissal I certainly would have. In the realm of such matters I would have thought
I would have received a notice to appear for a show cause hearing to be heard and state
my cause but I did not.
I think you were typing this comment at the same time I was responding to your earlier one.
I understand what you are saying, and I do not disagree that the short end of the stick is handed to many of us in these situations. You don’t know what you don’t know. But the courts are likely going to see your file as having been properly adjudicated.
If you have options, the experienced debt defense attorneys in your area, who know your court and its judges and clerks, will be best able to advise you.
Michael, thanks again for your replies! I probably ‘was ‘typing’ before while you were
replying, haha. This whole thing has driven me crazy in my attempts to devise
some approach to solving even after all these years, and yes, I guess you could
have called it an “Adar misunderstood up.” That’s funny. You had me laughing
on that one! You mentioned the 10 month time line window
as being more of a management tool for the court’s calendar and dockets.
Enlightening to say the least, and disappointing too. Seems I really have no leg
to stand on, even if stated in their own state’s rules of Civil Procedure.
1.420(e), (b) etc. etc. ?! Is it all just a whitewash? It’s merely a guideline.
I hate to say it but once again it’s not about the law,
“rules of civil proxcedure” etc. instead…it’s more about pushing through all the
litigory cases that have piled up as swiftly as possible, rubber stamping them
if you will in order to move on to the next, and the next. – –
Yes…please send me any debt defense attorneys from my area (MA)
that specialize in these matters and know the south Florida courts (19th
judicial circuit, St lucie County) –
Thanks again Michael, you’ve been very helpful.
Your not wrong Adar. Part of the business model of debt collection in the courts does rely on filing in bulk, and the scalability that assumes the vast majority of defendants will not respond, know what to do, or when.
I sent you an email with a half dozen experienced debt defense attorneys in your area.
It would be great if you post an update with how you progress.
Michael, Lynn, I do appreciate your input! I have this to say;
I did not ‘follow’ the dockets. I have not spoken to an experienced debt defense
attorney on this issue. The notice I received from the court was ambiguous at best.
Either 10 months DID elapse without any activity to prosecute or it DID NOT. How
can a court be confused on this? I frankly did not know how to respond to such a notice
when I received it in 2008 much less anticipate a judgement to follow.
Lynn, you mentioned you work with such matters everyday within the 20th
Judicial Circuit in Florida. Can you honestly say that what I’ve experienced hasn’t
occurred to others, probably more often then one would believe? All because of
some judicial mess up. I should not have been left to holding the bag without an
opportunity to be heard. How was I to have acted on such a notice not knowing then
the intent of it’s message? A snippet of the notice I received:
ORDER VACATING NOTICE OF LACK OF PROSECUTION
THIS CAUSE having come before the court and the court finding that ten
months had not elapsed since the filing of a pleading in this case and
therefore the Notice Of Lack of Prosecution was entered in error, it is thereupon
ORERED and ADJUDGED that the Notice Of Lack Of Prosecution entered herein
on October 20, 2008 is hereby vacated of record and shall be of no further force
or effect.
Unfortunately Adar, the courts will have expected you to consult with your own counsel, or to become informed on your own about how best to proceed. The court followed their own rules, and the debt collector, as a frequent player in the courts, did as well.
10 months is a guide to the clerks to use for calendar and docket management. It is not a set in stone timeline that prevents plaintiffs from further pursuing their claims. Courts give all manner of latitude to both plaintiffs and defendants for excusable neglect.
I cannot speak for Lynn, but I do know what you experienced does indeed regularly happen to others. You are calling it a judicial mess up, but it is actually more of an Adar “misunderstood-up”.
You really should run your scenario by an experienced debt collection defense attorney in your area. Most offer a no cost initial consult. I can email you any I know of if you like?
Thanks for your response. You’ve told me that the court’s notice, e.g., order to vacate
due to lack of prosecution was their response. Granted, however this came
over 1 year later. The notice was date stamped October 30, 2008. My Answer was sent
on October 5, 2007, and received by Plaintiff’s attorney per a copy of their date stamp on
October 8, 2007. I have read Florida’s Rules of Civil Procedure for the district/county
court, the 19th judicial circuit in this case.
Fla. R. Civ. P. 1.420(e) provides for the procedures for
dismissal of an action for failure to prosecute or to continue
pursuing an action. If no activity has occurred in an
action, such as the filing of pleadings, for a period of one
year, the court may dismiss, or a party upon motion may
request the court for dismissal. Dismissal is not automatic,
but must be made on motion, or by affirmative action of the court.
My defense is that the time lines for affirmative actions, responses, were not met
within the 1 year window and therefore the rules for dismissal for lack
of prosecution were met. To discover a judgement years later that you never knew
existed nor had any opportunity to defend against is wrong.
Forget the fact that I was not affored the proper notices. “Lack of prosecution” was
and is the issue here.
Thanks again for your reply & comments and for all the other readers here an
opportunity to receive helpful information and to learn something
Hello Mike, Outline of a previous civil complaint from a debt creditor.
Summons/complaint received. ANSWER sent within 20 days. Plaintiff’s counsel acknowledged
receipt of ANSWER. Only ONE response received from the Clerk of the courts over 1 year later
titled “Order Vacating Notice Of Lack Of Prosecution” – notice claimed order was entered in “error”
and therefore is vacated of record. Not understanding the intent, meaning, or otherwise direction
the case had taken from this notice, I made the assumption that the case was closed. This was back
in 2008! Late in 2014 while checking credit bureau reports, we discovered a judgement had been
entered on this case. This was hard to believe. I am claiming “defective process of service” since
NOTHING was ever sent to me in the course of the complaint other than the 1 ambiguous notice
referenced above. No response to my ANSWER, no notice to appear later in court to “show cause”,
nothing from plaintiff’s counsel, nothing period. I believe I have a case. In essence, a summary
judgement was entered against me in error without justification. I have researched and looked
at other case files. Do you agree? The second defense is that 10 months DID elapse without any
activity. My motion will be to Set Aside / Dismiss Judgement.
Have you run your scenario by an experienced debt defense attorney in your state?
Question I am currently paying off a debt each week till it gets paid off from cavalry portfolio services (llc). My question is if I finish paying it off can they still sue me or go after more money? Please help!!
Generally speaking, once you resolve a debt there is nothing else to pay, so no risk of being sued or of further collection activity.
Can you offer more details about the collection account with Cavalry Portfolio Services?
How much are you paying Cavalry each month, and what is the balance remaining?
I saw the fact that EBay doesn’t report as being relevant in the sense of having a much more difficult to remove charge off record on my credit history. Where CAs aren’t required by federal law to report like a bank loan or official line of credit would be, it seemed like a good situation for me to pay and clear the record should there be on incurred from the CA, instead of also trying to write EBay to see if a long history of missed payments and a charge off could be removed as well. I was making the point that a normal credit history item in this circumstance would be a double negative in showing late or missed payments, a charge off, then a new line with a CA.
I recently got stuck in the Swiss bank dropping there peg in a large currency trade. The result was a negative balance of over 700k unsecured.
I have a income stream of 20k a month profit. Can they attach a lien or frieze my business account which I depend on to pay my employees and collect money from my sole proprietor business. I am not incorporated. I do not own the building I use. I know they can garnish my income 10 % in New York. I am worried if they frieze my business account I will be out of business?
Unsecured debt would mean there is nothing securing, or set as some type of collateral if you default with payments. In order to collect form you, if you are unwilling to work something out, your creditors would have to sue you. With the little information you shared, yours is a profile that expect to be sued.
Who are the unsecured creditors that are owed, and what are the balances related to each?
Are you willing to come up with some form of plans for full or partial repayment?
Do you have the financial ability to work through this in the short to mid term?
My negative balance is with one of the on line forex brokerages in the US. I have not been sued and negotiations are under way. But if they fail and they win a judgment my concern is not only will they be able to freeze my personal account but can they freeze my business account which would put my in a difficult place to pay them or anyone else. Are there laws that protect business accounts that serve the public good if the debt is personal? I am not behind on any debt and have excellent credit. All my significant assets are protected from seizure or bankruptcy through ERISA laws and a new mostly unpaid mortgage with little equity. One last part: I read if your dept is not consumer debt no matter how large you don’t have to take the means test. Is brokerage loss debt considered non consumer debt. I was in it to make money?
https://www.forexcrunch.com/snbomb-reactions-from-10-forex-brokers/
Mine is apparently not one of them
Run this all by a bankruptcy attorney in your area, and perhaps even an experience debt defense attorney. I can help you locate one if you post the name of a nearby larger city.
Albany or Syracuse New York
I sent you an email with contact details for two experienced attorneys in Albany. Their practices are focused on consumer law, not business debts, but that also means they can likely address your main questions effectively. The first one listed also provides bankruptcy services.
Ask for a referral if the challenges you end up facing are strictly business accounts.
I filled out your background information section with a lot of details and then submitted my question. This was yesterday Jan 27, 2015 at around 5:15 central time. Did you get it? I haven’t seen it on here and I never got an email. I am new to this site and just want to make sure I didn’t do something wrong. Please let me know. Thanks!
I am usually pretty good about replying to all comments on a daily basis, even on weekends. Reader question submissions require me to publish a new page. There is a process to that nowadays that can mean several days before I publish, or an email will go out asking the person to copy and paste their situation and question as a comment to an existing page (to avoid duplication of content covered frequently already). I read over your submission and will send you an email requesting you copy that in to a comment with a link to the target page. Once I see the comment, I will respond with my feedback.
Will the email you send me have all the background info I typed. I don’t have a copy of exactly what I wrote. I also don’t remember the exact questions I asked. Hopefully you have it still. Thx so much.
It did have all of that. I already sent the email.
Hi there! I think it is so awesome that you give of your time and knowledge in helping people on here. I unfortunately also one who has no where else to turn for some advice and must add to your load here if I may. I will be as concise as possible.
I am applying to go to medical school later this year. I am very financially disadvantaged and will have to take out 2 loans to make this possible. Stafford unsubsidized, and student direct loans (both from US Department of Education). The direct loans have the following general terms for qualification: 1)No current debt exceeding 90 days overdue and 2)No student loan repayment defaults/charge offs/etc.
I fell into the Bill Me Later trap and had a debt of $3000. Since work while completing my undergrad was minimal due to full time school, and having a small family and wife with special health needs, my repayment over the past few years has been sporratic, but happening. Then we had a period of large medical bills, school expenses out of pocket, and a broken down car. It went 6 months of less than minimum due payments and I thought it would get me by for a little bit since it was all we could do. This landed the account being charged off to ACI as of a few weeks ago. They called my parents a few days ago and have not yet spoken with me directly.
As you may know, PayPal never entered the debt or records pertaining to it on my credit report. So as far as can be seen as of right now, the debt does not exist there. But I do not know how things will change with ACI now. I will have enough money to pay the debt in full by April, but have never been in a situation like this or had a debt charged off. I think my current credit score for my 10 years of history is about 700.
I am just desperately trying to glean advice into 1)How to approach ACI..2)Will they report the collection account, even if I am willing to not try and barter the cost down and/or pay what we can until April when I can clear the debt or 3) Is it possible to negotiate that in the event they report from the beginning, can they remove the entries once I have paid what is owed? My biggest fear is that I have invested my entire life to get to the point of being a competitive medical school applicant, and in the even I get in, I am basically terrified of the potential impacts of this PayPal/ACI thing disqualifying me from student direct loans—thereby making the prospects of being able to go of accepted, impossible, because I do not have someone to co-sign a $145,000 loan to cover living expenses and obviously cannot work full time while in medical school.
Please help! Sorry this was not as consice as I intended…any thoughts are valued as gold at this point:)
I am skeptical that a collection of the sort with Bill Me Later and ACI will prevent you from being approved for the federal government backed student loans. It sounds like you will have the money to settle with ACI in April, and that you are not applying for the loans until after that (correct me if I misunderstood). If a PayPal account shows up in collection on your credit reports, and is resolved to show paid (whether for less or in full – it is zero balance), I think you are still in good shape.
I am going to send this to a student loan pro and see if she wants to weigh in with anything different.
Thanks a lot Michael! I appreciate your time very much. I have learned a lot more about settling collection accounts and requesting removal of the records as part of a “If I pay in full right now..” offer. I will give that a try. From what I understand it’s a fairly appealing deal for them if you show the money and in consideration that debt collection accounts aren’t required by law to be reported to the credit companies (so I read). I have had more money turn up and should before I even get my tax returns back which I just filed, so we won’t even be past the “30 days assume the debt valid” period, so I think things should be nice, quick, and neat.
I agree very much with Todd Stark you really are a warm shoulder in which to find comfort & guidance. I also appreciate your knowledge and time you put to help each and every one of us with our individual credit issues. Thank you Michael!
Michael, its so true i get anxiety snd sometimes panic. I need to learn to not be so fearful, Really the worst thing that could happen to us is we have to pay 2 or 300 a month on this account. Its not something we want to do, but if we have to do it, we will. Its not the first time we have had to pay on a balance. Thats why i was hoping to at least negotiate the balance down first. Calling one of the attorneys you gave me will most likely give me some peace. Thanks again!
Michael, being sued by Dynia is a real concern for me right now. Im not sure i can live each day for months waiting to see what they will do. I dont have money to make a lump sum settlement right now or this time next year. My only way out would be if I could get a reasonable payment plan now. Can consumer recovery help me negotiate with them on a payment plan i could deal with? To be honest, I dont think I can wait around to see if I will be sued in court then get on a payment plan.That is too stressful. I dont see how i could fight this in court either since i do owe the debt.
I understand why you have anxiety about all of this.
I am not taking files at the moment. I am going to email you contact details for experienced consumer advocate attorneys who have likely dealt with Dynia many times. All of them likely will offer you a no cost initial consult. I want you to call one or more and talk about what is going on, and your concerns about being sued, or setting up payments right now.
In my opinion, if you cannot negotiate and pay a reasonable lump sum settlement now, you wait to see if you are sued, and then work with one of these attorneys I am sending you to defend it. Debt collection lawsuits are frequently beaten back and dismissed for a myriad of reasons. Ask about those reasons, and gain your own comfort level with what I am saying, by speaking to someone about how they do it (if you need them to).
Hi Michael, I need some advice. I stopped paying a Target credit Card back in 2013. Just Monday (1-5-2015) afternoon I was served with what looks to be legal court papers showing me as the defendant and TD Bank as the Plaintiff. A legal team out of Plantation Florida is representing TD Bank. The summons or legal court papers instruct me to contact them in writing within 20 days. A phone call will not help me & to contact my attorney is also advised and if no attorney to seek an attorney referral service. I am very much aware of this old debt and I am very concerned as to how to proceed. I want to be sure this isn’t just another scare tactic to “get my attention” and I sure don’t want my employer to garnish my wages. Should I call the attorney’s office who served me and attempt to negotiate a payment plan or a lower settlement and/or proceed with seeking the advice of an attorney…..what should my next step be? I was looking into debt consolidation, but fear I may not have the time to do so with the 20 day time frame. I am scared. My debt is just over $7,500.00. Thank you in advance for any and all suggestions.
I would suggest talking with an experienced debt collection defense attorney.
What is the name of a larger city near you? I can email you contact details to nearby attorneys I know offer an initial no cost consultation to talk over your situation.
Thank you Michael, to answer your question I live in between Vero Beach & Melbourne Florida. I sure do appreciate any and all advice. My concern is if TD Bank sues me, what stops Target from coming back later and suing me again. My responsibility is to Target, not TD Bank.
I sent you an email with contact details for a couple of experienced debt collection defense attorneys in the area. Both likely offer a no cost initial consult so that you can discuss what is going on.
TD Bank bought up the Target card portfolio. TD bank has the legal right to collect as a result.
Sorry… I should add that TD Bank ownership of your account means Target cannot, and will not, also try to get you to pay.
Hello again Michael, After a ton of research which my husband devoted many hours to, we did reply to the courts and added our affirmative actions/motions (pardon the terminology may not be correct, I don’t have the paperwork in front of me), and in return we are set for mediation on 3-4-2015. Because of my work scheduling issues I called and arranged a telephonic mediation. I never did consult an attorney mostly because of monetary reasons, but my question is what should I expect at this point? Is there a possibility we could settle for a lessor amount than the suit filed against me? And is there anything additional I should be alerted to, to protect myself? Judgement? Anything you could share would be greatly appreciated. I want to arrange anything to avoid my wage garnishment or a lien against my home/bank account, etc.
Check out exemptions from judgment creditors, and if I have not covered your state in the comments, post your state in the comments on that page and I will.
You can negotiate a settlement now, or even after a judgment is entered. I would be targeting around 60 percent in this situation. How prepared are you to fund a settlement if they accept your offer?
Hello Mike- I don’t remember seeing the judgement for my state, but I do live in Florida. If you could post the judgement details for my state I would really appreciate your help on that.
Now onto the settlement of 60%. Would I be expected to pay it the day of mediation or do the courts usually allow 30 days? And how likely would it be I could negotiate the percentage?
The first 750 dollars of the head of household wages are protected in Florida.
Florida will protect up to 5 thousand dollars value of your car (1k, plus up to 4k of any unused homestead exemption, but that must cover household goods not covered by the 1000 dollar value of your personal stuff).
Your household goods are protected for 1k, but up to 4k more can be exempted depending on homestead.
Florida protects deposited wages in your bank account from levy.
Home exemptions have a limit on acres, but not dollar value.
If you do get an agreement to settle, I would want to have those funds at the ready. You can sometimes buy the time you need though.
I think you have a good shot at settling for 60% if you do not look all that collectable. Does your credit report show you are paying other credit cards on time, or do you have other unpaid collections on there?
no I am pretty good at paying everything else. My credit score is 661 & I am fairly current on everything but this Target debt. My debt to income is shaky….That I am sure of. Is this good or bad??? Tomorrow is my mediation. I will not have the 60% available tomorrow but can possibly have it within 30 days, (fingers crossed).
You look a little more collectable than someone with other debts in collection showing on their credit reports. You may be looking at a higher settlement percentage as a result. And sometimes… you just settle for affordable payments on the balance.
This is pretrial mediation?
Yes, this is a pretrial mediation (as far as I know, this is my first go around with anything of this nature)
Michael, my main concern with this mediation tomorrow is answering the questions posed to me correctly without further condemning myself in order to come out with a decent percentage?
With my affirmative defenses is it okay to admit to the debt?
Who starts the negotiating process the collection agency, me or the mediator? I am so green at this and it is unfamiliar territory.
Are there court costs added on?
I think after checking I will be able to have the funds in 3 days. Is this good or does it matter at this point.
ANYTHING you can lend will be greatly appreciated.
I hope you can post an update with what happened today Tammy.
Well today was my dreaded mediation. However with Michael’s generous knowledge and advice we plugged through and were able to come to a negotiation within a reasonable time frame, the attorney representing the plaintiff accepted our first offer. My original debt (including court cost of $360.00) totaled $7562.00 and we offered 50% which was accepted. My mediation was handled via the telephone because I wasn’t able to appear in mediation….I truly feel that was to my benefit, maybe not, but nerve wise, it felt better. I was given nearly 30 days to pay the negotiated amount in a lump sum. I am so happy with the outcome. But I absolutely couldn’t have entered the mediation feeling confident without the advice of Michael and the many resourceful tools available online which my husband and I spent many hours researching. Michael, you are awesome and again I thank you. Thank you seems like chump change when I just want to hug you and buy you dinner, a nice dinner.
I hope you know how much we appreciate everything you helped with, sincerely!!!
Thanks so much for the kind words and the update Tammy.
Great job getting this resolved and putting it behind you!
Hi Michael,
I have a charged off cc with Elan for $6,600. I stopped making payments about 3-4 years ago, and havent had any debt collection calls for about 3 years. I am now in a better financial status point in my life where we are starting to get ready to buy a house, and have been researching trying to settle it to get it off my credit. I am getting ready to send a debt vaildation letter and I have been then have been debating sending a sperate settlement request letter if I pay 20%. What are you thoughts or suggestions on this?
Who is it you are thinking of sending the debt validation request to?
What state do you live in?
Who is collecting, and whether the SOL to collect in the courts has expired, can impact realistic target amounts to settle for, and whether to call and negotiate is better than writing in (calling is better in my experience).
When is it you are looking to apply for a home loan?
Im in Wisconsin so I believe the SOL is 6 years. We are planning on looking at houses after our wedding so about 12 months from now.
When I checked my credit report it still showed elan was collecting. So I was going to use that as the address to send the debt validation letter.
The payment status says “bad debt placed for collection and skip” and anothrt line says “charged off as bad debt”.
It sounds like Elan still holds legal rights to the debt.
I would call and ask Elan who the account is currently placed with for collection. Post the name of the company when you know it.
If Elan has the account internally at the moment, you can negotiate the pay off amount with them directly.
If Elan has the account, they are the original creditor. There would be little cause for sending them a debt validation letter. If you call Elan and learn who the debt collection agency is that has your account, you have effected a validation of a sort with that call. Sending the debt collector a validation letter would not be all that productive.
There is nothing worse than having a process service come banging on your door unexpectedly. But if you are expecting it then its easier to handle. Its having no warning of it that can make you fearful. My question is, what is the warning sign that for sure a summons will be next. Many dunning letters are sent to you, but which letter actually means business when they say they will sue if you dont call to have this debt resolved? And since my bank of america account is with a collection group called Dynia and Associates, does that mean they will eventually sue because they are a group of attorneys?
If the account is within the SOL in your state to sue,and you are hearing, or receiving collection notices from, an attorney licensed in your state, the odds you could be sued have increased dramatically.
I would say your risks of collection suit are higher with Dynia. But you can often fight collection suits successfully, and for less than it would cost to settle.
I have been able to settle two cards lately with a lump sum because I had help from a family member. Those two cards balance were 8600 and 14000. I was able to settle with them for 1200 and 10,000. But only because I had help. I still have this 18000 hanging over me. I’m not going to get any lump sum help with this one. I don’t know what to do but ask for a lower balance and spread it out over 3 or 4 years. Is that possible with Dynia? If I had to pay 280 to 300 a month then I will just have to. Of course if I could go lower than that it would be great. Have you ever seen this kind of balance of 18000 being knocked down to 10,000 or less and pay it out over a few years ?
It is possible to get the balance reduction along with payments that extend a couple or more years. But it is not all that common.
There are instances where you just hold tight and save up each month as much as you can, with the intent of settling later. If the statute of limitations runs for Dynia to legitimately sue in your state, you have less to worry about, and can still negotiate a settlement more on your terms if you want. If you receive a letter from a collection attorney in your state before the SOL to sue is passed, things are likely getting escalated. But court may be where you get the payments you can afford.
I do not like long term payment plans with debt collectors for the following reasons:
You can reset the SOL to sue.
Life happens and you could miss making a timely payment, and thereby lose any settlement/balance reduction agreement.
If it were me, I would wait it out until I had about 25% of the balance to offer as settlement, the SOL ran out, or I were being contacted by an in state collection attorney.
Thanks for the good advice. I will do that.
It’s interesting you mentioned in state collection attorney. If I was ever to be sued, the attorney has to be local? Or in the state? I ask that because I got served some papers from Stephen Bruce Associates who resides in Oklahoma. I live in Louisiana. I did eventually settle with them because I didn’t want to get sued.They were representing Discover. How were they able to sue? I’m just wondering.
The attorney suing you would need to be licensed in your state. The attorney for Discover may have held multiple state licenses (many debt collection attorneys do), or had satellite offices in your state.
There are also large attorney collection networks out there.
I have a B of A card that we stopped payment on 9 months ago. The balance is 18,000. It is in collections now with Dynia and Associates. Is it possible to get them to settle around 50% or 60% without a lump sum but instead with a payment plan?
I often advise against monthly payments, but you can often settle debts for less with debt collectors like Dynia, and get time to pay. What amount of money can you afford to pay monthly?
What can I do when I my account has been charged off when it was in good standing? I opened the CC account with US Bank in 1991. In 1998 I added my then wife. In 2009 we got divorce and I took the CC debt. In May 2010 my ex filed for bankruptcy. Since my ex was still on the account and despite the fact that I made every payment as required, US Bank charged off the account. I found this out when I tried to get a student loan. In order to get the student loan I had to show proof that I paid as I should have. I got the loan. Later I call US Bank to complain about this. Finally I was able to talk to Mr. Joseph Blair, Recovery Manager at US Bank. Mr. Blair put my on hold for about 20 minutes returning to the phone to tell me that me account should have never been charged off. However US Bank has not made any attempt to undo their mistake.
What can I do at this point?
Tim
File a credit reporting complaint against US Bank with the CFPB here: https://www.consumerfinance.gov/complaint/. Be thorough with the dates and times of all that transpired. Once your complaint is submitted, it can take a few weeks for USBank to respond back to both you, and the CFPB.
I suspect this will get straightened out without the need to do much more than that. But post an update with what happens and lets go from there if need be.
Hi Michael, thank you for being such a font of wisdom on these topics!
I have a debt for just over 14k that I let get out of hand through a combination of unexpected family crisis compounded by marginal record keeping practices and plain old ignorance. The debt was from a credit card last used in 2007 and was originally less than 7k, but has grown to its present size due to the original interest rate jumping from 4.5% to 28%, and then being placed with CACH when I was unable to keep current with payments.
So due to the family crisis part of this story I had maintained a temporary mailbox (one of those places like Mailboxes Etc.) in the state (CA) that the debt collection action ultimately took place – I lived in a different state at the time and was traveling back and forth while I awaited resolution of that crisis back in 2007. The resolution, expected to be a few months at most, dragged on for years and I updated and forwarded most of my mail forwarded (most – it seems not all mail forwards reliably) to that temporary box until I could figure out exactly where I would need to live to best address the issue bringing me here.
It turned out to be a bad arrangement because when I finally did move to CA, living arrangement circumstances were such that the temporary mailbox became impractical to visit on a regular basis, and I began to forward and update all my addresses once again to my new physical residence. Late into this second transition, I was served at some point with a summons, but it was served to the rented mailbox rather than my actual residence, and by this time I was collecting the mail at the temp box only once every few weeks as most of it was junkmail by then. I had declined to take the box rental renewal but the owners of the mailbox shop still collected stray mail arriving there as a courtesy (that’s just a guess – and if true I don’t think it was personally done for me, as I hardly knew them). The last bundle of mail I picked up did not have a summons in it, but from what I have learned this is not that important – substitute service is apparently given a fair bit of guideline leeway here. Suffice it to say I was sued unawares and didn’t show for the court date I had no idea existed. Count me as one of the 90%.
I only discovered I was sued when I received a letter from my bank saying they had been ordered by court to freeze my accounts, and that a total of under $50.00 had been seized from them (the entire balance at that time). This was by a lawfirm located far from me in the state, whose name I cannot recall at the moment, but the case has been transferred once or twice since then and is now with one that is quite close (Mandaritch).
After speaking with them I offered to pay as much as I humanly can, but I am out of work and had just I spent the last year settling and paying all of my other debts. I explained that I am willing to do the same with this one, but after some calculations and favor-asking of my contacts I explained on a subsequent call that I simply cannot come up with more than about 50% of the amount they are asking for, even if I include selling off of some nonessential personal effects and gifts. They didn’t seem remotely interested and in fact took the opportunity to order another freeze on my bank to collect again, and again it was a pittance compared to the amount owed but still a significant hardship when I am trying to stretch every dollar until things improve. I have not continued the conversation since, as there’s presently nowhere for it to go but downhill.
Ok – now for my actual questions. Sorry for the long sob story! : )
First, is it at all realistic to expect that I can get a judgment-enforced collection settled for anything close to 50% of the current balance (which happens to be just about double the original amount)?
Second, is there any reason to think that I would have a chance at having the judgment vacated due to the substitute service being performed at a location I was only marginally connected with at the time of service? I do not actually want to avoid paying the debt entirely, but prefer to negotiate it on a little less lopsided of a footing if at all possible.
Third, I am very likely to be moving out of state soon for yet another developing family emergency, and it coincidentally is a state with extremely short SOL for judgment collection (one of the two shortest in the country). If I move to this state, what happens to the judgment in CA? Does it automatically convert to its equivalent in my new state of residence? Does the time prohibition start over fresh in the new state, or does the SOL get considered to be expired the moment I become a resident of the new state (as it would be aged already a year or so past the SOL there, even though it hasn’t passed it here in CA)?
Thanks again for your inestimably valuable insight and advice you provide -free- to a bunch of strangers like myself!
You can often settle judgment debt for around 50%. Why the Mandarich law firm is digging their heels in on such an inflated balance is possibly going to be their loss… as you can often vacate a judgment like this.
I am going to email you contact details to an attorney who regularly works on vacating judgments older than 1 year in California. Call him for a no cost initial consult and get his opinion after you share the facts, and also a feel for what will be involved. Ask Adam your questions about moving. But the judgment from California would likely have to be filed as a foreign judgment in the new state, and maybe with fresh legs as far as the SOL goes.