This post was inspired by my comment exchange with a site reader about negotiating a settlement with a Discover credit card that is now in the hands of a collections law firm. My comment would have been too lengthy a reply on the page the discussion originated, and this is also something that is not all that topical to the Debt Relief Program Intro page. What follows is food for thought; not just with Discover Card, but with creditors like Citibank, American Express, Capital One, etc.
For context, you should read the comment string with Jay about settling with Discover.
From the other page Jay said: “I have a Discover card owe $5200 on it. I was communicating with Discover via mail, and offered to settle for 25%. I called Discover and they said my account has been sent to an attorney.”
Resolving Discover Credit Card Debt After Months of Not Paying
If you want to settle a Discover debt, and have a plan and the means to do so, sending them form letters offering a deal is not the best way to go about it. Yes, there are websites full of anonymous posters who promote sending letters for this, that, and the other thing. There are merits to, and strategic goals, that can be accomplished with these letters. Using them effectively is situational though. But the promoters of their use rarely dig deep enough to learn about someone’s goals and financial situation to compare alternatives. And readers of these sites often fail to volunteer the particulars of their goals and finances in order to receive more useful feedback. In fact, most people reading this, and other debt and credit related websites, do not post at all. That is not Jay. He IS on other websites, and here, looking for more feedback. That’s great. But before he got to the place where he started looking for more feedback, I assume he read somewhere that sending in a 25% settlement offer with some canned wording to Discover Card, in order to settle with them, was a good idea. It is not. It is a good way to blow the opportunity to settle with Discover for 40% to 50% before they charge off the account and place it into their collection pipeline.
Current trends for successfully settling a Discover credit card directly with the bank are between 40% and 60%, with some one-off events that can settle lower, but it is not all that common. There are also accounts that can be flagged for no negotiation and settlement that would result in a lower pay off with Discover. Historically, my experience suggests Discovers criteria for refusing to settle, prior to outside debt collection efforts, are based on account usage prior to defaulting on your payments, length of account history (account less than a year or three old), or when a “collectability” assessment suggests the account not be settled. Settling your Discover card before it gets charged off (6 months late), is most often going to be accomplished by speaking with a collections/recovery representative employed by Discover. The best deals and savings from settling with Discover will typically be in the last few weeks leading up to them charging the debt off as noncollectable on their books.
I cannot know whether Jay’s account would have been one that got settled prior to charge off and placement with an attorney for further collection. But I do know that his goal has been to settle, because he sent a letter to Discover offering to, and has said that remains his goal in the above linked comment string. Had he been able to settle early, he could have potentially avoided the charge off entry on his credit, and would have avoided being in the position he is in now. But I suspect Jay read somethings online that, while probably intended to be helpful and useful, may have helped to over complicate an otherwise straight forward opportunity to resolve his Discover credit card bill.
Based on my experience, I would say there is at least some likelihood that the letter Jay sent to Discover Card offering to settle, led to his account being treated differently than others that get placed in the collection pipeline after charge off, or placed even earlier than 180 days of nonpayment. I say differently, but that is a misnomer. Discover, and other large credit card lenders, do have policies and protocols in place that, to them at least, would be the normal treatment applied to a small percentage of accounts where they receive canned letters (perhaps like the one Jay sent), from their card members. Creditors will also develop different attitudes for how they handle, or dig their heels in, when settling, or not settling, with accounts that go in the direction Jay read about, where arbitration is elected, and is primarily why I am writing this post.
In a comment Jay said: “Some people have ask me to opt in for Arbitration with JAMS but i do not know much about Arbitration. I really need advice with this soon. All I have to do is send them a CMRRR saying that I dispute this debt, request validation and elect arbitration with JAMS to resolve this matter between us.”
Disputing Your Discover Card Debt and Electing for Arbitration
There is a long sorted history with using arbitration to collect unpaid credit card debts. I cannot possibly cover it in this post, even if I wanted to (I don’t), but I am very familiar with the history, and the strategic purpose of someone in Jay’s situation electing for it now. And though I may come off as not supportive of the different ways you can succeed with “alternative methods” for resolving debt, I am actually all for using different strategies to best resolve a debt when someone is well informed of the risk/reward of the alternatives, like disputing a valid debt, or serving notice to a debt collector that you will elect for arbitration of any dispute. But that does not appear to be a good alternative for Jay when considering what he shared in the other comment thread. Nor is it going to be an effective or realistic option for many who try it. Here is why:
Jay’s goal is to resolve the Discover Card debt.
Jay has access to the resources to help him do that.
Electing for arbitration, or other alternative methods to dodge a legitimate debt, may in fact lead to a HUGE time commitment in order to succeed. What is your time worth? If you have to spend what could be countless hours researching and applying what you learn if the CIR Law Office receives his letter and does not do as that website Jay has been reading suggests (CIC) – where the debt collectors “run for the hills” (man I hope there is more to what he read over there than that) – are you prepared to follow through? What if the process takes more than a year (it could), and you lose anyway (you could), and end up owing far more than originally owed to Discover (could happen)?

In the first comment Jay left on the other thread he said he owes a debt to Discover for 5200, but is being encouraged to dispute it. I do not know the context of what Jay read, or any comment exchange he had on another site, so I do not know if there was an outline given for the strategic purpose of disputing a debt Jay already knows is legitimate. But it does not matter. The general strategic purpose for disputing a legitimate debt is to buy time for some other reason, or with the expectation that the debt will be treated as a “hot potato”.
Debt collection and playing hot potato: The incorrect assumption that all debt collection is a numbers game that relies on collecting the most, from those most likely to pay, for as little overhead cost as possible. If someone identifies themselves as less likely to pay by sending a dispute or debt validation request, the collector moves on to another file, sends the account back to the originator, sells it off, or assigns the debt to another collector. You then send a dispute, debt validation request, or cease communication letter to the next debt collector you hear from. Wash – rinse – repeat.
Sending a dispute and request for debt validation to the CIR Law Office in Jay’s case will not buy much time. Why? Discover does not sell much of their defaulted credit card debt into the open market these days, so I am confident they still own the debt. CIR will have no trouble meeting their obligation under the FDCPA to provide Jay with validation. I suspect the validation request, dispute, and serving notice that arbitration will be elected in order to resolve any dispute, will only lead to further complexities for Jay, and others who are faced with similar circumstances.
There is an Ebb and Flow to Debt Collection
Creditors deal with things the way they want to; assignment and contingency collection agencies do things a certain way (often as dictated by creditors placing debt with them); debt buyers manage their operations and collection files in the way that makes sense for them. They can all make changes to their practices and recovery goals due to changes in the economy, internal data, legislative changes at the state and federal level, lawsuits they may have defended and lost, or succeeded in, new case law, decisions from higher courts, etc. Consumers electing for arbitration was an effective way to cause creditors and debt collectors to treat the file as a hot potato after the National Arbitration Forum was shut down several years ago. The effectiveness of the strategy was/is real, but is ebbing towards non effective as card holder agreements have been adjusted to eliminate clauses, arbitrators see this as a ploy, and creditors, like Discover, dig in and become stubborn. Stubborn can mean Discover, and other banks, are willing to spend the money taking some of the cases all the way through – even though the costs can far exceed what they can collect (especially given the fact that if they win the consumer can elect for bankruptcy).
Playing hot potato with a debt collector can deliver the desired effect. But it is counterproductive for someone who:
- Wants to, and has the means to, resolve a debt.
- Wants to refinance or purchase a home without waiting until the Discover credit card ages off the credit report (7 to 7.5 years). And is not okay with the higher potential to be denied other credit products like future auto loans, and credit cards, and is not okay with paying a higher price for those credit products in the future (maybe even insurance products).
Should someone in Jay’s situation try the hot potato approach with his Discover credit card? No. Not in my opinion. Not when his goal is to resolve it, avoid being sued, and move on with his life.
Are there instances where someone should do as Jay is considering? Yes, but those would be very limited instances. And would be limited even further if the average person really had a grasp of how much time and energy they would need to commit to the process doing it themselves, and who were also fully informed on how to compare other options that would help them accomplish their mid to long term personal financial goals before proceeding.
My comment to Jay on that other page is to speak with an experienced consumer law attorney (with a practice focused in defending debt collection lawsuits), before making up his mind on what to do next. The attorney may recommend Jay take a defensive position now that his Discover account is likely headed to the courts if it cannot be resolved in the near future. The attorney likely has dealt with CIL in the past, and will be the best positioned to give Jay solid advice about what he is considering.
An Invitation
I invite anyone concerned with the topic I covered in this post, or whose goal is to settle or make payment arrangements on their Discover Card, to participate in the comments below. Just know that the bias of this site (and of yours truly), is to mostly publish content and provide perspective about resolving debt, and not playing hot potato with collection accounts.
If you would like to consult with me about your Discover debt you can reach me at 800-939-8357, choose option 2.
If you are dealing with an attorney collecting for Discover, and want affordable legal help to handle the court process while working toward settlement, fill out a profile on this site and get help. It’s as easy as clicking the “get started” tab under the consult request image below.
I received a Civil Summons from Discover card. I have 20 days to reply . The amount I own is $6500.
I know its my fault that i own it . But I figure they would get a hold of me 1st and say ” hey you kwn this amount , let’s see what we can do for you , if not we will take your to court” was no warning involved . so what do I need to do? Call discover card up? Or go to court ? I ahve no attorney and I def can’t afford one. I need help before my 20 days
We can help you resolve the Discover lawsuit out of court, or even defend it to buy you time to save up to settle it without a judgment. Click on the get debt help tab in the upper right. Fill out a brief profile with what is going on, and then click talk to an expert to bring up my calendar to schedule a quick call with me, or you can even skip that step and get started right in the system.
Hello, Regarding Discover card debt. My mother Discover was compromised by my sister illegally. My sister applied online for what she call loans, but not sure what exactly she did. Balance is $32k. Believe my sister had the money deposited into my mothers account and she withdrew them from my moms account online to her own. My mother doesn’t speak or read English and have no way to access her accounts online. Now Discover has filed a court case in San Joaquin County, CA. What kind of advice can you offer me before I speak to discover or their attorney?
I would talk to an experienced consumer law attorney of your own first. Check out this video with Jeremy Golden, an attorney in California who helps people with debt collection issues like this.
Michael,
I am helping my mother. She has several credit cards that she owes 60k approximately.
One of them is Discover at approximately 11k. I decided to call them and let them know of my mom’s situation. Her only income being SS and VA benefits. Also, just had Heloc reset so trying to keep her in her home. They were very aggressive in getting me to agree to one of their deals to lower interest rate and pay over 60 months. They also tried to get me to give them a payment that they can hold to bring the account to approximately 60 days behind. Was not ready to commit to any of that; just wanted to let them know of situation. My mother also has serious medical problems and very unlikely to live longer than two years at high end, and that would be very surprising. Still trying to get my hands around her situation. Settlement is a possibility as would Chap 7, but she would prefer not to do that.
The accounts that she has that I am most concerned about are Amex and Discover. Last payment on Discover was made Oct 24, 2016; was due Oct 22nd. How does the 180 day charge off work? Does it begin with date of last payment, or start with November 22nd, which is first date that we missed payment?
Any guidance would be appriciated.
The charge off clock typically starts the day you stop paying. What is the Discover balance? While your at it, what are all the balances, and who are the account with?
Resolving Discover and AMEX and not the others can cause escalated collections from those other accounts.
Chapter 7 bankruptcy is going to be the least costly and fastest solution by far. I would encourage you to consult with an experienced bankruptcy attorney. Given her health an inability to pay, it is often far better to get this stuff out of the way quickly.
Hello everyone,
I received a warrant in debt (filed in general district court) yesterday with a hearing date set for March 15th; the claim is on a credit card debt I owe to Discover Bank (2k). I stopped making payments to this account on March 2016, and have since received multiple letters from Glasser and Glasser offering to settle for less. I had no job/money to make any kind of payments so I just ignored them. The last letter dates January 10th, 2017 and says that if I make a payment of 1k by February 4th, 2017, the debt will be resolved in full.
The warrant in debt also claims an extra 1k in attorney’s fees which would increase the amount I would have to pay to 3k if I were to go to court. Has anyone been a similar situation? I started a new job that would allow me to pay this debt in full – and that’s what I’d been planning to do (I already have the money put aside). However, I am not sure what to do now, or what to say when I call them on Monday. I really would like to avoid paying those attorney’s fees if possible.
If you have an offer to settle fro 1k from Glasser and Glasser, that will typically also include attorney fees. How is the letter worded regarding what they will accept as settlement?
I like taking a deal like this if you can afford it, which you can, to avoid more credit damage.
The letter says: “As of today, the total balance due is $2003.74. We are authorize to accept $1,010.00 to resolve you above-referenced account if your funds are received in our offices on or before February 04, 2017.”
They send the letter on January 10, 2017. They sent me a warrant of debt last Friday. I gave them a call yesterday asking what would happen to the warrant in debt if I paid; they said they would dismiss it within 14 days but could not send me a letter stating that. Not sure what to do now. ~ thank you for replying!
I should mention the Discover Bank still owe the debt, and that Glasser and Glasser are collecting the debt on their behalf.
If I had the money I would take the deal.
The dismissal is normal. If they don’t do it, let me know and I can help you from there.
I was a customer of Discover Card for over 5 years and faithfully made payments until my wife and I were both laid off from our jobs. Prior to our knowledge of any layoff, we racked up $14,000 on our discover card. We were laid off towards the end of 2014 and settled most of our debts, with exception of Discover. With no income, we could no longer make payments, Discover told us that they would not negotiate or settle. No one ever contacted us until sometime in 2016, where they had a collection company attempt to settle. My wife and I did find employment, but our income is less than 50% of what is was before the layoff. Discover has now referred this debt to a Law Firm, who has sent their 1st communication giving us 30 days before a lawsuit is filed.
Would you have any advice as to what steps could be taken to settle? Also, if they do obtain a judgement, do they collect on their judgements?
You will likely need to 50% or more to settle. How quickly can you raise that? If it is going to take several months, you will likely want to defend the lawsuit that is coming to buy that time. Check out this video about using the fact you were sued for collection to your advantage.
If they get a judgment they are likely going to want to collect on it. But you can settle judgment debts for less, and set up payments after the fact too.
Thank you for the response. Do you typically see a settlement after judgement for less than 50%, or would I be better off settling prior to the complaint is filed?
Also, your video references Attorneys that specialize in these types of settlement, should I call or email you directly for a referral?
I do not see settlements after judgment for less than 50% often at all. It is far better to negotiate a settlement prior to judgment, and prior to be sued too. But there are instances where defending a collection lawsuit from Discover will lead to the best savings result.
I can email you a list in your state. Just post what state you are in.
Hello Michael,
We spoke on the phone before: I have CC debt with Chase (25K) and Discover (5.5K)
I am settling with them this month.
Chase has passed it on to allied interstate, though i believe it was recently transferred to a different colections company on chase’s behalf in the last 3 weeks or so. Discover has been offering “savings” in their voicemails. Chase accounts are charged off, past 6 months, and Discover is going to be charged off at the end of this month, and threatened to sue if I don’t pay by end of month.
When I talk to either Discover or Chase, do I tell them that I have debts with the other creditor and reveal how much, or keep the other debts secret?
Thank you,
Chase accounts are with United Collections Bureau, just found out. Not sure if it’s with any other collections company as well.
Chase is usually only going to have your account out to one debt collection agency at a time. Done right, I would look to settle with United Collection Bureau at closer to 20% of the Chase balance.
You cannot really keep one account from the other, as debt collectors have real time access to your credit reports. Be sure to watch that video.
I would negotiate and reach my settlement with Discover now, as that threat of suit is something they regularly follow through on.
My husband passed away in August. I used the credit card to pay for burial. When they told me this was not legal, I agreed to pay the $2500 back and asked them to send me something I could pay on. Today I received a letter from attorneys asking me to call. I tried all day but did not get through. I can borrow the money and send a check tomorrow for full amount. Should I?
Was this a Discover Card? Is there an estate for your husband that passed to you? They are likely going to want to try to collect the entire balance. What is the total owed?
Hello, I have a balance with discover card of $6,500, I got a hardship program for 6 months and a low I street too. My credit is 796, my income isn’t the highest.
I wonder how can I negotiate the balance with them since I got some money I can use to this balance. My account is still with them and never in collections. I’m thinking to offer $4,300 but I don’t know how.
After reviewing websites, articles, etc about settling a card balance, the balance has to be in collections. Mine it isn’t. I have an excellent credit and all I want is to pay full the balance with a reduction of it.
You’re advise I know will help.
Thanks,
Griselle
You cannot pay less than the balance owed without hurting your credit. And you also cannot get the best settlement outcome without being many months behind, which also impacts your credit.
Hello Michael,
I have two accounts with discover. They are a result of identity theft which is why i had a fraud investigation encouraged and disputed the debt.
They are both right around $1000, ($968 on one and $979 the other)
They haven’t been paid since late 2012 / early 2013.
Discover wrote me that they still own the debt and that they consider it valid 🙁
Both accounts are currently on my credit report as “charged off” / “disputed”
My husband and I are looking to purchase a home next year.
The only thing standing between us and a pre approval is those two charged off cards on my credit report.
What do I do?
Does it make sense to offer discover to pay at least part of the debt? Like a paid for deletion kind of deal?
Or would that not help me?
Does an account marked “disputed” have a different effect than an account marked “charged off”?
I’d be willing to pay part of that debt if it would get me and my husband a pre approval for a mortgage
I can’t however pay 2000$ (the full amount), especially since its debt I didn’t make?
What are my best options?
Thank you so very much for your help!
Tina
Fill in the talk to Michael form in the right column Tina. When I see that I will email you to set up a phone call. I will be asking some detailed questions about the ID theft before I offer the feedback you are looking for.
Done 🙂
Dear Michael, we are attempting to settle a $7k alleged debt with discover card. we contacted the law office who filed suit.. we offered 25% and their 1rst counter offer was for 95%. we countered for 30%. The law firms next counter was for 90%. I offered 35% and the rep for the law firm said they needed to take the offer to discover for authorization. The law firm rep then said i needed to answer questions before they could take the offer to discover. She asked if we owned or rented a home? She asked what are our monthly bills are? do we need to answer questions like this before they take offer to discover? how do you handle these types of questions? my partner lost his job and we are 1 income family. don’t they know if we own or rent? can’t they see we are behind on other bills on our credit report? The law firm rep said that someone would be in touch from the law firm instead of agreeing to the offer right then and gave no timeline. Is that normal? or does that mean the law firm does not intend to settle?
When were you served? Have you filed an answer yet? What state are you in?
When you are looking to try to negotiate a settlement that is way less than the norm, you will typically get hit with asset and income/expense questions. I run in to that too.
served 1 week ago. filing answer this week. OH. my husband has since called back and was told it could take up to 7 to 10 days for the rep to hear back from discover on whether the settlement offer was approved. they are not making any counter offers, why?
You probably have no shot at the 35%. They may not be countering because they are content to progress with the legal action in play. You can reach back to them if you like. Just know that it is not common in my experienced to settle with Discover at the court stage for less than 50%. It is not easy to even get to 50%.
Hi there,
In June, 2014, I had an accident that rendered one of my legs useless. I am unable to work because I am not able to stand, sit, walk, drive a car, lift objects, kneel, etc. and I have to take a cocktail of medications that leave me comatose for most of the day. I have ongoing medical needs which require me to visit doctors for various treatments at least every 2 months. I applied for social security disability in February, 2015, but was recently informed that my final hearing is still at least 10 months away.
I am without any form of medical insurance (in my state, in order to qualify for medicaid, one must first be approved for social security disability). I am up a creek financially until my disability goes through or my leg magically functions again and I can return to work. I have literally lost everything. My savings are gone. I cashed in my retirement. That is now gone. I sold my car. I’ve moved in with my parents, who are elderly and have both gone back to work to help pay for my prescriptions and medical treatments (each treatment costs roughly $3000, so they are now financially strapped too).
Being that I was a normal, working, middle-class adult living a regular life, I had some credit cards with balances on them at the time of my accident. I was in contact with all of the creditors when it became clear that my leg was not getting better, when I realized I would not be able to return to work in a reasonable amount of time, and I when was not going to be able to continue making credit card payments. Citibank worked with me. Bank of America worked with me. Discover card refused to work with me. The last payment I made to them was December, 2014, five months after my last charge to the account, six months after my accident, and having no previous delinquencies over eight years of card membership.
When I stopped making payments on my Discover Card, the balance was just under $6000. Over time, they have tacked an additional $3000 onto the balance. They served me with a summons. I responded within their time frame. They sent their enormous packet of statements. I have answered all of their calls telling them “when my disability goes through, the first check I write will be to cover my medical treatments. The second check I write will be to Discover Card.” I knew it was all fruitless. I knew what was coming.
And today, it came. My hearing date is December 20. Merry Christmas, Discover Card.
Reading through the posts here, I see that your advice is generally to scrounge up as much money as possible and try to make a reasonable offer.
I know that you can’t say for sure, but what do you think a reasonable amount would be? My parents are the only people I can ask for money, but they are already depleted (and I have another round of treatments scheduled for the beginning of the year).
Do you think I can offer 30%? 40%? 50% (or more) is out of the question because my parents simply don’t have the money.
Is it wise to try to settle before the court date? Or should I plead my flimsy case before the judge?
And what happens if the judge decides I owe the full amount? I have absolutely no way to pay it. I have no wages to garnish, no house to lien, no money in my bank account to seize. So, what happens?
It seems ridiculous to me to file bankruptcy for a single debt of less than $9000, especially when I am (in theory) less than a year away from having the money to pay it off, but is that something I should consider?
I have never denied the debt. I simply don’t have the money and Discover has refused to work with me to resolve the situation. If I had/when I have the money when the money, I would/will pay it. But since I am held hostage by my medical condition and the social security disability process, this just isn’t going to happen before the hearing date. What do you suggest?
Thank you very much for your time.
50% settlements with Discover are possible when sued. I rarely see them get done for less when you are in the courts, but given your set of circumstances, yours could be one of them. I would still prepare for half as a realistic outcome though.
Discover should have placed you on one of their 60 month hardship plans, or even revived their 60/60 plan if they sunset-ed that. This was a fail on their part, but it happens all the time with credit cards, not just Discover.
I too would hesitate to file bankruptcy over this one debt for 9k. Not when it can be settled for half to boot. Then there is the reality that there could be additional medical costs that overwhelm down the road, and I would want to keep bankruptcy as a trump card (you can only file chapter 7 every 8 years).
You are judgment proof, so the result of court will not matter. They cannot collect. You can settle for 50% later on too, but before you get your lump sum pay out for disability. Explaining everything to the judge will not matter at all. He/She is there to determine if a debt is owed, not whether or not you have a hardship.
Me and my wife have a discover card a piece with her card containing approx $9000 and mine containing $7000. I have been making monthly payments of $200 each month for 3 years and am spending most of payment on interest with each card charging $120 – $130 each month going to interest on the debt not principle. I have the means to settle this debt outright but would obviously like to get the best deal possible so not to waste the means I have. Please let me know what you think would be the best settlement negotiation strategy to take. I really want to get these debt payments out of my life for good.
Thank you
Click the debt settlement tab in the upper menu. That is the beginning of an article series about what to, and how to, settle debt with an original creditor like Discover Card. Read through to the end of the series and you will have the understanding of the settlement process you need.
You have to fall behind with payments, and by several months, in order to get the best deal negotiated with Discover. Your credit will take a beating over it, but can bounce back.
Are there other credit card balances?
Hi Michael,
Three years ago Discover had referred my account to Zwicker and Associates who failed to ever contact me directly and a judgement was made against me in Massachusetts. I never personally received paperwork until receiving a letter in an attempt to garnish my wages. A few months later I moved to Florida and after living here for 18 months I received a letter from Zwicker and Associates stating that the Massachusetts judgement had been vacated. Is there a chance they would try to come after me now knowing my new location or is it likely they have simply called it quits?
When did you stop making your payments to Discover Card?
July 2013