Comenity Bank is mostly known for servicing credit cards for stores and other outlets, not for their own branded cards, or retail bank locations. As you will see from the list below, they are the bank behind more than 100 other companies.
Your options for dealing with credit cards serviced by Comenity will often mirror what you can do to settle debts with Synchrony Bank. Both of these banks tend to approach helping their card holders struggling financially by offering hardship plans and settling debt for less than what is owed the same way. Even their external collection policies and procedures are similar.
Before I jump in to how and why you can settle with Comenity for less than the balance you owe, I want to point out that they offer lower monthly payments, which are a good idea if your account is not overly late yet.
Ask Comenity About Hardship Plans
Like most credit card issuers, Comenity offers hardship payment plans to their account holders. If you find it difficult to keep up with your monthly payments to Comenity, and are barely late with payments (less than 60 days), you may be able to get your minimum payments reduced.
Hardship payment plans with Comenity may only be offered to you for a temporary period, like 3 to 12 months.
While some banks are great at offering hardship plans for sixty months, like Chase payment plans, Comenity is a bit more reserved in this regard.
If you read my hardship plan article series you know that you typically have to answer many monthly income and expense questions to find out what type of plan you qualify for, and how low your interest rate can be reduced (some go to zero percent for the full 60 month repayment plan). This is likely something you will have to do with Comenity too.
Answering all those questions is not a problem when all you want is a reduced interest rate and lower monthly payments temporarily, or long term. But answering all those questions is something I would avoid if my goal is to settle my Comenity balance for less.
If you have more than one account you are trying to get reduced interest rates on, and more affordable monthly payment plans, consider working with a nonprofit credit counseling agency. It can be a whole lot simpler to get all of your accounts that qualify enrolled in the 5 year repayments that these counseling offices can get for you. They do all the work!
You Can Settle With Comenity For Less
Settling with Comenity for less than what you owe on your credit card is common. Like with most any credit card that you are negotiating a lower payoff with, you want to be several months late on your payments in order to get the best discount approved.
The outcomes of your settlements can vary depending on your situation. I have good success getting Comenity settled for under 50% once you are 5 months or more late.
If you need several months to pay your Comenity settlement, that is an option! The payment flexibility can come in handy when you do not have quite enough cash to cover a lump sum settlement. It can also be a tool to allow you to do more than one settlement at a time, which can help you maximize your savings on multiple accounts.
How you prioritize which account you settle with first may mean holding off on dealing with Comenity. I can cover more about this critical decision with you if you post in the comments below, or schedule a phone consult with me.
Comenity Uses Collection Agencies
If your Comenity account is more than 7 months late you are likely dealing with a collection agency working for the bank, or a debt buyer. How I would approach settling will depend on who has your account.
If your Comenity account went to a collection agency, but was not sold, your settlements are often going to be less than half the balance owed. Payment terms on your settlements can typically go for longer than would have been the case if the settlement were done directly with Comenity earlier on. This can be super helpful to your settlement goals with other creditors!
Your account can go from one collection agency to another without it having been sold. Many banks will send your account to a different agency every few months. Be sure to open all of your emails and regular mail to keep track of where your account goes.
They Sell to Debt Buyers
Comenity sells their accounts that go seven months late and longer to Portfolio Recovery and Midland Credit Management (and others). We have good success settling with both of these debt buyers for 50% or less, and often get a couple of years to pay, depending on your situation.
Comenity is not known much for suing to collect themselves, but when they sell to a debt buyer like LVNV Funding (and others mentioned), the risk of being sued for collection is seriously high.
You can prevent being sued for your Comenity account by:
- Settling with Comenity before they sell your account off.
- Settle with a collection agency working for Comenity.
- Settle with the debt buyer that bought your account before it goes to a collection law firm.
Avoiding being sued is very realistic even if you do not have a lump sum of money, because your settlement can be stretched out over monthly payment terms.
Settling Comenity accounts is pretty standard. Even if a law firm has your account you can often settle for at least some savings.
Credit Reporting and Comenity
Like most major banks, Comenity will show late payments in 30 day intervals on your credit reports. These late pays will culminate in charge off credit reporting after 6 months of payment default. After the charge off is when Comenity will typically subject your account to their external collection policies.
If Comenity sends your account off to a regular collection agency, where they retain ownership of the account, they will still be the one to show an unpaid negative on your credit. Settling with the collection agency that has your account will trigger an update to your credit reports by Comenity. It will show a paid collection and a zero balance owed within a month or two of completing your settlement.
The collection agency has no influence over Comenity’s credit reporting.
If Comenity sold your account to a debt buyer they would then typically still show a charged off account on your credit reports, but with a zero balance owed (they sold the legal rights to your debt).
Some banks have been testing deleting accounts once they sell them, but that is not a trend yet (I wish it were).
Once a debt buyer purchases your account, most will then show a negative collection debt on your credit reports, and with the balance now owed to them. You want to be sure Comenity is showing a zero balance owed to them if a debt buyer is now showing an unpaid balance.
If you see them both reporting a balance you can do something about it. Check out my video about double negative credit reporting. You cannot owe two places for the same account!
If you resolve your Comenity account with a debt buyer, many of them will delete their credit reporting trade line (whether you pay in full or settle for less). The deletion can take a month or two with most, while Midland Funding has a credit reporting deletion policy that is a little unique, but they still do it.
Whether a resolved Comenity collection account gets deleted or not, you can still accomplish most any credit and financing goals with paid and/or zero balance owed collections on your credit.
I should point out a couple things more about credit reporting with Comenity.
If I were to take a temporary hardship plan with any bank, I would first want to be confident my monthly cash flow short fall is only going to be brief. And I would probably not take one if I am already showing ninety days late or more on my credit.
Taking a hardship plan does not mean Comenity is going to remove the late pays on my credit reports. If I am more than 90 days late, I may be able to help my credit more by settling with Comenity for less, than by using a hardship plan.
If you enroll in a nonprofit credit counseling debt management plan, and you never went 30 days late with Comenity, you will likely see no meaningful hit to your credit score in that repayment plan. Accounts in a debt management plan do get closed, but you can get new accounts once you complete the repayment.
Debts Are Bankruptcy Eligible
Comenity credit cards are unsecured. They would qualify for discharge in a chapter 7 bankruptcy (the version I would want to file if I had to). You would typically not have to pay unsecured debts in a chapter seven bankruptcy.
Your Comenity accounts can become part of your repayment plan in a chapter 13 bankruptcy, which is where you typically pay back some, or all of your unsecured debts over a five year period. This is the version of bankruptcy I would not want to do if I could avoid it. I would generally look to settle my debts on my own terms outside of a chapter thirteen if I could.
Depending on your overall debt situation chapter 7 bankruptcy may be better for your credit than settlement.
Comenity Credit Card Brands Include
There are well over 100 different affinity and branded credit cards that Comenity Services. Here are some of the larger stores that partner with Comenity:
Abercrombie and Fitch, Ann Taylor, Arhaus, Ashley Furniture, Bealls, Bed Bath and Beyond, Big Lots, Buckle, Burlington, Christopher and Banks, Crate and Barrel, DSW, Eddie Bauer, Forever 21, Game Stop, Goody’s, Hot Topic, Houzz, HSN, Ikea, J. Crew, J. Jill, Lane Bryant, The Limited, LOFT, Lucky Brand, Maurices, Meijer, New York and Company, Overstock, PacSun, Pier 1, Pottery Barn, Talbots, Victoria’s Secret, Wayfair, West Elm, Williams Sonoma, and many more.
Comenity services numerous retail jewelry store credit cards, hardware stores, travel cards and healthcare providers too.
If you have questions about resolving debts with Comenity, no matter where you are at in the life cycle of the debt, you can post in the comments below for feedback. You can also click the box below to schedule a private phone consultation with me. I do not charge anything for those calls.
I paid my bill in full and I still keep getting notices from Comenity for late fees and interest.They have 1480 complaints on the BBB. I filed a complaint with the OH State’s Attorney Office. I have never seen such an outrageous company that should be put out of business.
You may want to consider filing a complaint through the CFPB portal too. They will generally respond to you when you do that, and fairly rapidly.