Citizens Bank offers unsecured personal loans and credit cards. They also offer lines of credit and cards to businesses. They are a medium size bank that you will only find in certain states. If you are in the midst of a financial setback, Citizens bank does have tools available to assist you. In this article I will cover what you can do to get them to lower your monthly payment (temporarily or long term), as well as what to expect if you need to settle a debt with Citizens, or file bankruptcy.
As with most any form of debt relief, what you decide to do about resolving your debt with Citizens bank should be based on what you can financially manage with confidence. If you cannot commit to a debt solution quite yet, sometimes doing nothing for a minute will be the most logical step.
Note to self… is doing nothing an actual step? Shall we call it an “unstep”? Help me out in the comments below on this one.
Citizens Bank and interest rate reduction.
Like most medium to large sized banks, Citizens has the ability to lower your interest rates on credit cards and loans. You will need to communicate with them and share some limited details of any hardship you are experiencing. They will often ask a few probing questions about your monthly income and expenses. And they will want to reach their own level of confidence that any lower monthly payment they offer you is something that you can afford.
If you call Citizen’s bank in an effort to see if you can qualify for one of their internal hardship payment plans, but have not missed a payment yet, the payment options they share may be limited. Like most banks, Citizens will often reserve some of their most dynamic debt solutions to their account holders that are late with payments. I cover this topic in much more detail in my Citizens Bank video below.
If you are going to call Citizens to check on hardship payment plan availability, and what that monthly payment might be reduced to, you would ideally do that when you are only a few days to a couple weeks late. Sticking to this timeline means you have an opportunity to prevent any credit damage when getting set up on a plan. I also go into additional details you will want to know in my article about hardship payment plans.
If you have more than the Citizens Bank debt that you are struggling with and/or would prefer to have someone else work with your lenders to reduce your monthly payments, you will likely benefit from a free consultation with a nonprofit credit counseling agency.
These credit counselors have relationships with most credit card lenders that can allow them to get your rates reduced to single digits without having to miss a payment. You can talk to a credit counselor and get an exact quote of your monthly payment reduction by calling 800-939-8357 ext 1.
I highly recommend speaking with a credit counseling agency if you have more than one account you need interest rate reduction on. It can be a bit nuanced, and even a struggle, to get all unsecured creditors to work with you and provide their best interest rate reduction. Talking to a credit counselor will give you intel into which accounts participate in interest rate reduction and those who do not. And the quote of how much monthly payment relief they can provide to you is free to get, so why not call.
Citizens Bank is willing to settle with you for less than your full balance.
Debt settlement is something I highlight to people who are already a couple months late with Citizens, and who would not be able to afford a hardship payment plan, and who do not qualify for chapter 7 bankruptcy.
First off, you do typically have to be late with Citizen’s bank before they will entertain settling with you for less than what you owe. This means you will get hit with some credit score damage. The damage is temporary, as your credit score typically recovers rapidly after you resolve the debts. This aspect of debt settlement… the credit score pain, is what keeps many people who should absolutely do debt settlement from choosing it.
Now that you understand the credit damage angle, the goal is to settle as fast as you can to not only get your score back on track, but to prevent the most aggressive type of collection action (more on that below).
When you want to settle with Citizens bank you will typically need to find a way to come up with anywhere from 40 to 60 percent of the balance owed. How soon you can reach your deal will depend on:
- Whether you are negotiating a credit card or personal loan/line of credit.
- Whether you can pay your settlement in a single lump sum, or with 90 day terms.
- Will you need a year or more to pay?
- How many other accounts you are trying to settle, the balance of those accounts, and who those creditors are.
- How collectable you look to Citizen’s bank, or the third party collector handling your account.
Everyone concerned with how collectable you look, and the fact that you have more debts than with Citizens to settle, should schedule a free call with me using the box at the end of this article. I offer the consultation free of charge, so it would be silly not to schedule it. We will talk about things that any artificial search currently has no competency for, and that will maximize your success and savings when settling.
Citizen’s bank has access to the same 3 collection buckets the rest of banks in America use. These are contingency collection agencies, collection law firms, and selling to debt buyers. At the time of publishing Citizens places their unpaid accounts with collection agencies and law firms.
Collection agencies can make settling less complicated, where law firms working for Citizens make it more complicated (though not impossible by any stretch).
My goal for people settling with Citizens is to eliminate the risk of your account going to a collection law firm wherever possible. I can typically outline how you are going to do that in the phone call I mentioned above.
Citizens Bank unsecured debts in bankruptcy.
Most unsecured debts can be discharged in Chapter 7 bankruptcy and Citizen’s accounts are no different. The process in chapter 7 is often simple and streamlined so that you can get financial relief from all unsecured creditors in about 90 days.
Filing for chapter 13 bankruptcy is different. You are signing up to what is typically a five-year court sponsored repayment plan with Citizens bank, and other creditors.
Chapter 7 is the version of bankruptcy you want, if you have to file, but you must qualify based on the state you live in, your household size, your income and your assets. I can review your qualifications for chapter 7 during a phone consult but will not be able to deliver all of the information you should be getting before deciding whether to file or not, so I suggest scheduling a call with a bankruptcy attorney in your city or county. Most offer an initial consultation at no charge, so I would be reluctant to pay for it when so many offer the same thing at no charge.
Chapter 13 can be straight forward but often is not. It has more to do with whether you have predictable and consistent income and expenses than household formation and monthly cash flow or asset limits.
I highly recommend talking to a bankruptcy attorney about what chapter 13 will look like for you before committing to a debt settlement path. That goes for whether I or some other company is helping you, or you are doing DIY debt settlement. Why? There is often a knee jerk reaction to even learning more about the bankruptcy option, and you really should learn as much as you can about chapter 13 so you can do a side by side comparison with debt settlement.
Roughly 70 percent of people filing chapter 13 in the US do not complete it because of how rigid it can be. Debt settlement is often a far superior and flexible option than chapter 13 but settling for less cannot hold a candle to chapter 7 for those of us with balances in excess of 10k.
Citizens bank and how they credit report.
In the video embedded above I did cover how hardship repayment plans with Citizens and enrolling in nonprofit credit counseling impacts your personal credit. Both of these options are fairly credit neutral. Meaning there is either no impact, or maybe a single digit point drop (if you are worried about a 3 point drop on your credit score, and are not closing on a mortgage in the immediate future, we should talk).
If you fall behind with Citizens payments and want to settle, the act of completing your settlement is a net benefit to your credit. Citizens bank must update the credit bureaus that your account has been resolved. They do not have a choice. And from there your credit score can recover. How quickly depends on a host of things, but most certainly whether you still have other unpaid accounts yet to settle.
For the most part I want people to assume it will take 6 months to a year after all your settlements are complete, and your credit reports updated, to be in good credit score shape again.
All things considered that is not too bad a timeline.
Because of terrible and uniformed posts on the internet, and even by reputable publications, some people think they can negotiate what is called a “pay for delete” with their banks in exchange for their settlement money. This is not the case with brick-and-mortar banking institutions at the time of this publishing and never has been. It is, however, an option with certain debt buyers.
As mentioned prior, I am available to talk with you privately about how to accomplish your goals while resolving your Citizens’ bank credit cards and loans. No charge for the call. I can also answer questions and provide expert level feedback right here in the comments. For your own privacy, don’t post your actual name in the comments. When you comment here you are helping me help way more people than just you, because so much more actionable detail can come out in our comment exchange. Have at it!
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