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 collections.
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.
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.
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
I would not be confident they called it quits. Do you have a goal to resolve the debt, or more of a “wait and see” perspective?
I’d like to resolve it but I’m also in the process of trying to resolve my Citi account with Cavalry Portfolio Services. I don’t want to be actively paying on two accounts with a prospective out of state move upcoming.
I would continue to say up whatever money I can each month in order to be prepared to react to any new collection activity on the Discover account. If nothing happens between now and when you are done with Cavalry, you can then be proactive on your terms.
Sounds good, thanks for the advice Michael!
Hi Michael-
I was sued by Discover for the $2,800 balance on my account about 6 months ago. I did not try to fight it since the debt was valid and a judgement was issued against me. I am in a state that does not allow wage garnishment but just last week a recieved a letter from the attorney with a form to fill out to give to the court to list my assets and exemptions. Is it too late to settle? The last payment was paid over 3 years ago. If it’s still possible do I go through Discover directly or the attorney? Think they would accept 25%? Thanks for your help!
You typically have to work this out with the collection attorney firm that Discover sent your account to. You can still settle the Discover account for less, but 25% is not likely. You will be hard pressed to get a 50% deal now that a judgment is in the court. And timing your negotiations with the request for assets they sent you is not all that great. Trying to negotiate a settlement prior to submitting that will often suggest there is more to collect.
Parents are negotiating debt settlement directly with Discover card. Card balance is $12,000 and settlement offer is currently 40%. Their only income is social security which they use for mortgage and living expenses. Their credit is already very bad anyway and they have no cash on hand. The balance on the card is made up of primarily interest that has accumulated over several years and there have been no activity for 6 months.
Is it better to accept the 40% settlement or wait for a bettter offer when the debt is sold?
Michael – Also, what would be the criteria for negotiating a lower settlement – say 20%. They are on food stamps, get home heating help, Mother is disabled on Medicaid. They have about 45K worth of credit card debt and there are offers from settlement companies coming in at 25%. I would like to help with settlement payoff but particularly with Discover since the balance is mostly interest should we expect to negotiate a lower offer? Thank you.
When I see Discover settlements go lower than 40% it is often because the debts are much older (several years unpaid).
My comments are based on today’s realities. That does not mean Discover keeps to the same collection policies forever.
My main goal would be to keep this from reaching the courts.
My question for you is why not just encourage your folks to file chapter 7 bankruptcy and wipe out all the debts for less than 2k?
Discover does not sell debt. And 40% is likely as low as it will get for a long while. In fact, as much as Discover is suing these days, and if your goal is settlement, I would take the 40% on the table if it is doable.
I’m in Texas and have gotten a couple notices from organizations that settle debts with Discover from lawsuits. IT’s been years since I paid anything. The last time I think I was able to make a payment was either late 2012 or early 2013 when i got laid off. It was a miracle I was able to keep my house and I was unemployed for 2 years prior to starting work again in 2015. I’m only making $30K and my house payment is basically one of the two checks I get each month so I barely get by. The last balance I remember was $6100 or right around there. Through the years I ignored the letters and calls since I have had nothing to pay and really don’t right now. The only extra money that will be coming in in the next couple weeks is around $800 that is a settlement from the bankruptcy of the company (owned by family actually) that owed me over $26K in back pay I will never see, the last year before getting laid off I only got half my income roughly. A couple weeks ago I came home to a piece of paper stuck in my door from what I found was a PI with some kind of Texas State supreme court registered process server number, but I have not had any registered mails show up nor have I called the phone number on the paper. If I had the cash I would love to settle the thing in full but even that $800 is supposed to go to the parents who lent me that money to buy a POS car so I could continue to go to work which shows little to no signs of offering me a way to make more. Would you recommend I call Disc card to see if I can work something out with them? I have no cash for real settlement, nor know anyone I could borrow from or who would lend me the money. I would take out home equity loan but my credit score is currently 612, I need to be over 620 for that to be considered and paying any of this will of course lower it again. Anyway, would what would you suggest as I’d rather avoid going to court and in the process risk loosing my job as getting time off is not always easy. Thanks.
You would need to call the attorneys for Discover to set up payments. You can look up the case that is filed against you in your county court house, or call Discover and they will give you the attorney information.
If you could raise enough to settle in a lump sum, it would likely need to be half of today’s balance, and that is on the low side. How long would it take you to save up?
I have a Discover card debt of about $21k. Lawsuit was filed and I answered. Motion for summary judgement was filed by Plaintiff. I believe sufficient evidence has been provided to award summary judgement. Is it too late to negotiate a lump sum settlement for less than the balance. If so, how negotiable would you expect them to be?
You will typically be looking at 50% of the balance as an optimistic settlement on a Discover debt in the courts. That is sometimes a stretch to get approved. How much can you pull together quickly?
I have/had an account with discover, owe them $1026. To make a long story short, I have been away for the past year and return to the amount being in collections. I have a letter from a collection agency offering me to pay them 30% or $307 and it will be counted as paid in full. Would it be in my best interest to speak with them and pay that amount or to contact Discover directly? Would they consider deleting my fault from my credit history prior to the seven years?
Discover will not delete early.
What is the date the offer expires on that collection agency letter? If that has gone by, call and get a new one sent before you pay.
Interesting comments ! I learned a lot from the details – Does anyone know where I could get access to a template FTC Identity Theft Victim\’s Complaint and Affidavit copy to fill in ?
Check out the website the FTC put up to help with all things ID theft https://identitytheft.gov/
Good Afternoon,
My husband had a lawsuit filed against him from Discover Bank through Weinman Weisburg and Reis. We hired a lawyer and the hearing was today. The judge found in our favor thankfully. My concern is the appeal. I know they have 30 days to appeal and I was wondering if you knew how likely it is that they will appeal? our lawyer said if they appeal it will be tough to fight it cause they do have their paperwork on order, i’m not sure how our lawyer won but he did. Do you see it where more time than not they don’t appeal or vise versa? The total due is $4000. I’ve heard bad things about them and am worried. It was not our intention to run up the card but there was tons of vehicle repairs within a year time and we needed the vehicle to get to work and then right after that my husband started getting garnished for child support and we couldn’t pay everything. Plus there are some fees that we don’t agree with and a few charges he doesn’t admit are his. Thank you.
It is not all that common to see an appeal on a dismissed collection lawsuit. Discover does take some cases the distance though. Continue to save up any money you can to resolve the debt and put yourself in the best position to navigate anything that comes up.
I have disputed charges with Discover and requested that verification and retrieval information and have been denied of both . I carried their identity theft protection products paid for for nearly 3 years and recently settled a lawsuit against experience for selling my information that was misused . On top of that I have identity theft and Ftc affidavit of identity theft and when I went to use my identity theft protection with Discover I found out that the provider was in fact Experian. I’m currently being sued by Discover for those disputed charges and their attorney is going to great lengths to get me to pay a debt for which I do not owe. He’s lied under oath filing motion for summary judgment based on my not returning discovery and his secretary verified receiving the documents on three separate occasions prior to filing for the summary judgment . He is licensed in Nevada but does not reside or have an office here in Las Vegas and telephonically appears so far . Discover has never shown a bona fide offer service a $2000 payment was made that did not reflect my balance they’ve ruined my credit repair the Tivoli told me that my only recourse is with the merchant that did not exist according to the Attorney General’s office in Arizona and I have snowed them with documented proof that the merchant in question for the transactions have a long history of scamming consumers out of money and never giving them any service or refund. I also spoke with the merchants account holder and verified that the merchant infected been shut down for high percentage of chargebacks and questionable activity. Three other banks that I had credit card accounts with have done the same neglected their fiduciary responsibilities to me as a cardholder and facilitated three party payment processors and high risk merchants in there fraudulent activity against me. I have sought the help of every government with authority and not one of them is helping me nor can I find an attorney that is in Nevada that will take my case for less than $20,000 which I do not have now. I’ve spoken to corporate office and an advocate has spoken with me and they have opted to reopen and investigate my case. And responded only to say time and time again that the charges were valid and provide no documentation to support that decision. Nevada attorney general’s office suggested I file a private right of action. But I have no idea about court proceedings and one wrong or incomplete act can be a game changer and make me liable, not only for the debit but attorney fees as well. The situation has affected me and my family and I live in fear and anxiety. I’m angry all the time paranoid trust no one and struggle to provide for my family. Any credit cards with a zero balance in good standing have been closed and my credit is annihilated at best. I don’t know what to do anymore I’m devastated it’s incomprehensible demoralization the way the banks get to treat and have treated me when I needed them. I’ve been a faithful and responsible card holder for 20 years and the first sign of adversity, I was thrown under the bus. In the actions of Discover have been willful and strategic with disregard to me as a whole. They act with the attitude of sticking it in my face like saying “what are you going to do about it “.
I can email you a list of attorneys with debt collection defense experience in Nevada if you like? If you have not spoken with the an attorneys whose practice has a daily focus on these things, you may have a different experience.
Hello Michael,
My goal is to settle my credit card debt totaling about $26,000, mostly principle, with 2 creditors. I can take money out of my Mutual funds and Stocks, two accounts that I have but do not want to deplete.
debt:
Discover: $5,000 (60-90 days past due)
Chase:
card A $ 12,500 (close to 60 days past due)
card B $ 6,000 (close to 60 days past due)
card C $ 2,200 (61 days past due)
card D $ 500 (current)
card E $ 500 (current)
Card D and E i want to pay them off eventually. i want to settle debt on all the other cards and with the Discover card. I read that Discover can see that I am making payments on chase cards through my credit report. Called Chase about card C and they offered for me to pay only $45 (minimum payment after they take off the fees) to keep the account from closing the next day. Didn’t know if that was a wise move or not so I didn’t pay them yet, so the account should be closed after today. What do you say? Who should I negotiate with first? Chase or Discover and what is the best priority of the card to start with in chase?
I racked up the debt during and after grad school by buying a lot of supplies to make art, which didn’t sell as I expected and hasn’t yet this year. I expect it will start selling within a month or two but I won’t see much profit. I have one part time job and a side gig where I make barely enough to cover my living costs and having to borrow a bit here and there from family.
I’ve been making minimum payments to the chase cards after they offered to take off the late fees for the last few months because i told them I want to just keep the accounts open, but can no longer afford to do that.. Card D and E i’ve not missed a payment and can afford to pay their minimum.
Discover comes first due to their more aggressive collection policies as of the time I am writing this reply.
As far as which Chase account to tackle afterward, that can depend on the cash flow you have available. Done correctly, settlements on the Chase account should not differ greatly, so it will come down to which one you can clear away based on the money on hand, and then do the next one, etc.
Assume you need as much as 9k to settle all of these accounts. How long would it take to raise the money?
Without tapping into the mutual funds and stocks accounts I have, and luck aside it would take about 3 years, with luck of sales of my products could take less than 6 months. If I call and tell Discover before the 120-180 days that i’m broke and don’t have enough to make minimum payments, and they ask me to make a small “in good faith” payment of say $20, what is the best response? Thanks,
Call in for a consult Raphael. You can reach me at 800-939-8357 ext 2, or fill in the talk to Michael form in the right column of this page. I am out of the office today, but will reach back to you tomorrow and go over this in more detail. You really want to knock Discover out of the way if possible. There are some hybrid approaches you can take, and one of them is giving them a small payment, but only if it makes sense, which I can help you determine better on the phone.
Hello! My husband currently owes around $17,000 on his Discover card. He has been on disability for around 3 years now making only $1000 per month. I have worked hard to stretch my pay to make the minimum payment each month but we are not making any dent in the principle and never will. With other medical expenses and household repairs adding up I am finding it harder and harder find the money to make the minimum payments and feel very hopeless. On the other hand we currently have a fairly good credit score and I am nervous about doing anything to damage that.
It is my understanding that that Discover really will not work with us until we are past due on our account. Would it be worth it for us to skip a payment before calling and trying to negotiate a reduction of some sort? A family member has offered to pay off the card in a lump sum amount with the agreement that we would then begin paying them back until the balance was resolved, interest free. They have asked however that we try to negotiate a lower pay off amount before we proceed. As generous as this offer is it still is going to be very difficult and anything we can do to reduce this amount would help. Do you think there is any chance of discover even taking a few thousand off the debt as we have been current on our payments? I am just very confused on what our next move should be.
You cannot negotiate a lower balance payoff with Discover while current, and you cannot do that by missing one payment. You will have to miss 6 payments to get to a place where you can negotiate less than half off with Discover. Anything earlier than that and Discover may offer 10 to 20 percent off, but not much more.
There are still some rare instances where I see Discover offer their 60/60 plan that I talk more about here: https://consumerrecoverynetwork.com/review-top-7-credit-card-lenders-best-offering-debt-relief/
If your goal is to save the most money you are fortunate to have someone in your corner with the money you will need. It is a process to get where you are going. Do you want help?
HELP. Husband been ill no income. Discover sent offer Feb 5, 2016 offfer to lower interest to 7.9%. On this letter showed Feb 29. As charge off. We wrote accept offer to reduce. Got Mar 2016 statement. No interest deuction. Mailed pyt Mar 2016 (last pyt prior Dec 2015).
Mailed less than min pyt April 2016 and rec’d summons from attorney May 2016. Paid May 2016.
Filed answer & affirm defenses and REQUEST VALID as THIS SUMMONS WAS FIRST CONTACT OF LAWSUIT.
Never settlement offer never knew in collections.
Huband was mentally incapaciated 2013-2015.
HELP MEDIATION & HEARING IN 7 DAYS.
NO VALIDATION GIVEN. Just affidavit from litigation specualist Disc Bank, Feb & Mar statements.
HELP WIFE MUST HELP ME. PLEASE ADVISE
In state of GEORGIA $2738 but error as I been paying little amounts
I want you to talk over your issue with an attorney with experience in debt collection defense. You may have some issues about having accpepted their offer to reduce payments, where you did your part (if I read your comment correctly), but they sued anyway.
I can email you attorneys in Georgia that practice this type of law if you like?
Need lawyer consult asap in GA zip 30540
Mediation & trial july 20.
And i am disabled with zero income
I sent you an email with some contacts that have the experience you need, but you should first see if you qualify for low income legal aid, and if there is an office in your general area.
-$2200 owed to discover in balance transfers from other discover accounts
-28 days delinquent
-not charged off yet.
-set up google voice account to decline their soliciting calls
-Answer their phone calls once a month
-looking to settle for 40% of the original debt
-debt will be charged off after 220 days delinquency
I’ve asked discover about debt settlement opportunities and they’re very adamant about refusing to settle and claim “settlement is not something we offer”. They advised me that the debt will remain with discover and will not be sold to a collections agency after 220 days which leads me to believe they commission an agency to retrieve the debt for a percentage. My question is when would be the most appropriate time to offer a settlement to discover and what would be an appropriate amount to start from. Will discover offer me a settlement in the form of a letter in the mail? Thank you.
Discover stopped selling debt years ago. They will use outside collection agencies and a network of collection law firms.
They do offer to settle, so I am not sure why you were lied to. You do appear to be really early in your negotiation effort. How long has it been since you last paid?
Settling is a discussion I generally encourage having with Discover between 180 and 210 days delinquent.
There is a chance that Discover will not be all that receptive to settling based on the balance transfer activity. There is always a chance a creditor will not be receptive to settlement, but that often changes once you are dealing with an outside agency or law firm.
I have seen Discover send out settlement offer letters in the mail on older accounts. They are not nearly as consistent with those offer letters as some of the other banks are.
Thank for your response Michael! The last payment I made had to have been in April. I’m just kind of nervous that’s why. Should I pick up the phone on them when they call? Or should I continue picking up once a month?
These balance transfers are from past discover accounts that were closed due to lost or stolen cards I reported so the debt isn’t from a different creditor.
How apt is discover to suing? Will these law firms be more likely to settle? Given that I am 30 days late, what should be my course of action?
I am a fan of talking to original creditors a few times leading up to your negotiating a settlement with them. I encourage people to make those calls rather than pick up those calls from Discover. Your mindset is often better that way. Here is more on the topic: https://consumerrecoverynetwork.com/handle-collection-calls-from-debt-collectors/
Discover sues to collect more than most banks. Your risk of being sued for collection by Discover will typically begin once they charge off the account. You can often settle before that happens. I do see better settlement outcomes when you work things out directly with the bank as opposed to waiting for an attorney to contact you. In other words, Discover lawsuits can be negotiated, but at a premium.
If settlement is your goal, your next step is to pull the money together and then hurry up and wait until the optimal time to negotiate the best settlement arrives.
Hi Michael,
I am very close to chargeoff, about 170 days delinquent, and Discover has offered a 40% settlement upon my prompting. However, they want me to make a good faith payment of $150 or so before they send a letter out. I have learned that this resets the process another certain amount of days. Should I resist this request or is this a necessary and legitimate request?
I have seen them request that payment, and they do follow through with the letter and the settlement. If you are nervous about it record the call, and tell them why; because they are not willing to send the letter without the payment.
Hi Michael,
I have an old delinquent account with the Discover Bank since March of 2012. My delinquent debt is more than4 years old, and the statute of limitation (SOL) is expired. The SOL in my state (Maryland) is 3 years. Yesterday, Discover sent me a 30% settlement offer letter. Although it is good offer (70% off), I am not able to pay it now. So, I like to call Discover to discuss about further discount, perhaps 10% to 15%. But, concerns I have is that if I call, my telephone conversation recorded by the Discover resets the time filing a suit and the phone recording can be used against me in the court. Please share your opinions on my concerns. Thanks.
Talk to an experienced Maryland debt collection defense attorney about whether your phone call with Discover would potentially reset the SOL to sue.
I do not see Discover go below 30% much at all no matter how old the debt is. How long until you have the ability to pay the 30 percent?
We are trying to purchase a car. I’m tired of getting high interest rates, so over the last five months i’ve slowly build up my fico score from 470 to 625. I was able to get 8 items deleted from my report(EQ and TU, EXP is very slow to respond).. i have 3 positive very low revolving CC accounts that are also helping to boost my score, but the the Discover Card(DC) charge off is a major pain. According to the myfico simulator if i were to payoff or pay down the DC I would be hitting the 700 mark. My goal is to one day hit 750 and remain there.
This one item is messing with my head, spent countless hours researching.
So please clarify this point, if i were to settle the DC and they report $0 balance to the CRA, This means that the $2932 revolving account BAL would go down to $0 and my current Utilization of %143 would disappear and my score could increase, correct?
Thanx for your prompt response.
S.J.
Credit scores do not always immediately improve when the account is settled and brought to zero. But your DTI is indeed going to improve right away.
Discover card
Credit limit : $2000
Amount owed: $2932
Hi Michael,
The $2932 cc debt mentioned was charge off by discover card. The Date Of First Delinquency was 1/1/2010. According to my math this should fall off around 7/1/2017.
However , this is still being reported to the 3 Credit bureaus as opened/charge off and $2932 balance, As the result, it is seriously Impacting my credit utilization ratio (143% or so).
I am desperately trying to fix my credit score. Discover card still owns this account. But they have outsourced the collection of the settlement to a third party agency who has offer me $700 settlement deal. Discover does not do Pay for delete, at least that is what i was told by both collectors and Discover.
My question to you is should I take the settlement ? Will this improve my credit score when I settle for less? I understand that Discover Card will have to report $0 balance to the CRA which should improve my utilization ratio (I believe) .Or should be patient and wait until it drops off credit report,
Also, i have the money to pay team $1500 or even $2000 if they are willing to delete.
Pls advise.
Thanks in advance for your response. Your website is very informative.
S.J.
Discover will not do pay for delete. You could not offer them 10 times what you owe and get that out of them.
Settling the account and getting the credit report to show you owe zero and a resolved Discover collection account is what you can expect.
Whether or not this settlement with Discover will improve your credit immediately will vary from one person to the next. It will improve your options with certain loans, like a refi or new home loan.
What are your credit and finance goals between now and summer of 2017?
Good Morning,
I have been current with Discover Card, but my interest rate is so high. I am paying $258 just for interest, with minimum amount payment of $350.00 My due date is March 1. I read a lot of articles, that they will give me a chance if I got late in payment, so I did. They called me last night, and I asked if they can drop the interest, and I am still willing to pay the balance, until paid in full. They only offer 9.99% for 6 months, then go back to its original rate. They are very pushy, and I spoke to the manager, and it is saying, same thing like the representative I spoke to. She told me, she will send my account to their lawyer. I said, then, I will have a better deal when your lawyer gets it.
What is my best option? In 2014, I asked them to enroll me in hardship because my husband has no jobs for 2 years. Then, they only lower the rate to 14.49% for a year, stop the card, then after a year, I asked them for a break, they said no. Now, they told me, try the 6 months, and we will figure out the best for you after this. I said no, because you already did it to me in 2014.
Please let me know, what am I supposed to do next? Should I wait? to get a better deal? I owed $18,400.
Are you will to be reported 30 days, or even 60 days late to find out if they can offer you a better/longer hardship payment plan?
How long have you had this account?
Do you have other credit card balances besides this one, and if so, what do they all add up to?
Hi Michael, Discover Card sued me for a credit card debt for $4,468.85 in 2013. I didn’t have an attorney but I responded to the petition asking for an original copy of a signed contract and proof that the plaintiff owns the debt. I didn’t hear anything back from them until January of this year.
They sent me a motion for summary judgment. As for a day to show cause, all of this information was left blank. They also provided over a 100 pages of statement printouts with an affidavit from someone they claim is the litigation support specialist.. I responded to them asking about the original copy of a signed contract, proof the the plaintiff owns the debt (as they didn’t provide neither) and also who is this litigation specialist and what are the qualifications for such, .
Monday, February 29th, I received the motion for summary judgment paperwork again, but this time it had a hearing date of March 30th on it. They sent the same printouts again with it and affidavit with no original copy of the signed contract or proof they own the debt.
I really do know what to do as I don’t know how the judge will look at it and I don’t want a judgement on my credit report. Discover has charge off on my credit report at this time.
Discover is who your account was with and who owns the account now. They have not sold unpaid debt for many years.
Now that you have engaged in defending the court case, it is not all that common to win and get a dismissal when sued by your original creditor. If your goal is avoiding a Discover judgment, you stand a better shot of negotiating a settlement if you can afford one.
Can you raise half or more of what you are being sued for?
Yes I can raise half or a little more of what I am being sued for. The thing is that I don’t want to make a payment before I have the agreement in writing first. I don’t know if I should try to negotiate with Discover’s attorney on my own or by other means such as an attorney, etc.
If an agreement is met, I know the amount should be given but what else? Should it include credit reporting request such as paid in full or paid as agreed? Should a request to dismiss the motion for summary judgment dismissed with prejudice after payment? Thank you.
It is not a bad idea to talk this over with an experienced debt defense attorney. Post a reply with your state and I will email you contact that offer no cost initial consults.
You should not send a dime without the negotiated agreement in writing.
Discover has to update current and correct information to your credit reports. If you settle the debt they are good about sending those updates. It can take 60 days. It will show settled for less usually, but as a resolved collection, which you can then begin to bounce back from. Discover will not agree to remove the credit reporting,and the law firm suing is not in a position to agree to that for them.
The goal of your settlement is to get the case dropped.
Thank You. I’m in Louisiana
Hello! I live in NC and have received a letter from Zwicker & Associates in Andover, MA regarding a past-due balance with Discover Card. The letter states Discover has retained their firm to collect the balance owed, currently $7742.00.
It goes on to say, “at this time, no attorney with the firm has personally reviewed the particular circumstances of your account. This letter is not a threat of suit and should not be considered a threat of suit.”
So how am I to take this?! I havent made a payment on this card since last summer (2015) due to unemployment, illness, and family issues. I have explained to DC that I have no means to make payment and I am actually filing for disability. Family has stepped up to keep my mortgage payments current and also a small balance ($24 monthly) on another credit card so I can retain it for emergencies. They are also helping me with my utility bills but absolutely will not pay anything towards the DC balance.
Should I consider filing Chapter 7? I hate to do it and the guilt of not discharging DC is weighing heavily on me but I dont see any other way out of this mess. How soon can I expect to be sued? This letter is ambiguous to me.
Thank you for your time and help!
If the Discover balance Zwicker is now collecting is the only reason you would file bankruptcy, than I do not like that option. The debt is too small if you consider:
Settling with Zwicker for roughly half would mean coming up with about 4k.
You could probably find a bankruptcy attorney in North Carolina and pay $1,500 for the whole process.
That means you are filing chapter 7 over what may amount to $2,500 or less.
Look to raise money as quickly as you can in order to settle. If you’re sued for the Discover debt, you can still negotiate a lump sum settlement or payments with Zwicker then. Even if your sued and judgment entered, it appears there is little they can do to collect, given your disability status.
I cannot say how long it will be before Zwicker sues. I would suggest that it is more likely now that Zwicker has your file.
Discover card took me to court in 2010 for a $5,800 debt, judgement went in their favor with payment stipulation for $2,900 to be paid in monthly payments of $20 each. Payments have been made on time, every month since. The problem comes in now when they say I defaulted on the agreement in August 2011 and want me to pay the $5800. I have money order receipts and bank statements all showing I made the payments. This happened in NY, now I live in Florida and the letter I received is from a FL lawyer attempting to collect the debt. Will I have to pay the whole amount? How do I respond to them? Thank you
If it were me I would respond to the Florida attorney letter with a dispute letter of my own. I would point out in the dispute that the debt they are attempting to collect is not valid. Include a copy of the settlement agreement and list out all payment transaction dates. I would state plainly that any further collection efforts will result in your consulting with your own fair debt attorney, and your filing a debt collection complaint against the law firm and their client with the CFPB.
If you do something like that be sure to keep a copy of what you send and use certified mail.
You could also call Discover and verify all of the facts of your settlement and see what they have to say. If you were my customer, and this happened, that is what I would do. This would give Discover the chance to pull the account back and could be the cleanest resolution to the mistake that was made in the first place.
Post an update with anything that happens from here.
Thank you for your response. So even though they allegedly took it back to court & judge enforced the full amount, this can stil be reversed to the agreed amount? Also shouldn’t I have been notified with court papers of the decision? When I look up the case in the civil court, I only find the original date not anything in Augusy 2011. Thank you again.
Perhaps I misunderstood you. Did you make an agreement to settle/pay, make all of those agreed payments, and think this was resolved? That was how I read your original comment.
Is this more about having worked out a deal and not made all of the payments?
Stipulation was made in front of a judge to make monthly payments until paid off, then 8 months later they said I defaulted on the agreement and court enforced the full amount (I never received any paperwork on this) plus interest. However, I always paid, on time and have the bank statements to prove it.
Since the payments are only $20 a month it is not paid off yet and I have no problem continuing to make the payments (on the $2900)
Weird. Give me a call tomorrow to talk about your situation at 800-939-8357, option 2 rings to me.
My first inclination is to file a complaint if you can show ALL payments made timely with no default.But let’s go over some things in more detail tomorrow.
I have filed a complaint with Consumer Financial Protection Bureau (www.consumerfinance.gov/complaint/). Will update status as soon as I receive response from the company, should be less than 15 days according to CFPB.
Thank you again for your help!
Hello,
Update ! Company responded and agreed on putting account back on original settlement of $2,900. They stated they contacted Discover who also agreed to put it back on original settlement amount.
On my complaint I included copies of bank statements for the month in question as well as the following month.
I will now print a copy of complaint & response in my files just in case they suddenly forget a couple of months down the line.
Thank you so very much for your help!! So glad I found your page.
That is great JH! Post an update with any new developments. And if you later find yourself in a position to offer a lump sump settlement for less than the balance still owed, it is often an option.
Hi Michael,
I’m new to your site and this post was very interesting to me. I had been researching online among the various forums and was planning to send a form letter to Discover requesting a settlement.
Now that I’ve read this, I realize this may not be the right approach.
I would still strongly prefer to send a letter instead of call though (I have clinical anxiety and have been avoiding collection calls for years, as I just can’t face them… if I decide to call instead of sending a letter, I fear I’ll simply never do it) — but I wanted your advice on whether a polite, from-the-heart letter that is not demanding and not a form letter would be ok, or whether you believe that a letter should never be sent at all, period.
Here’s a summary of my situation (apologies in advance for the length):
– About 6 years ago, personal reasons forced me to leave a professional degree program, less than a year from when I was to graduate. This has left me with >400K in federal student loans, but without the degree and ensuing career that would have enabled me to pay them down. I am in the income based repayment program because my student debt is so out of proportion with my income; my payments don’t even cover the interest, so the debt continues to balloon. After 25 years the debt will be “forgiven”, but not tax-free… the projected forgiveness amount is over 600K which may leave me with a 200k tax bill… so I need to try to save as much as I can towards this impending doom.
– After I had to leave this professional school, I was struggling to find a new career/job and it was not long before I defaulted on my credit cards. I was first in hardship programs and did my best to keep up, but eventually, there was just no money to pay.
– Due to my anxiety (and an inability to pay anything until recently), I have avoided collection calls. It’s been years… 2 of the debts are still within the SOL and currently in active collections, after being inactive for a long time. I know more about these things now, and realize I am incredibly lucky I did not get a judgement on my credit report after all these years of avoidance, and I don’t want to push my luck.
– I now want to settle the accounts (including a third account that is past SOL) and remove the threat of being sued and getting a judgement. My motivation is partly because these accounts are now close to dropping from my credit report, so I’m close to getting a fresh start (not counting the student loans of course) and don’t want a judgement on my report. For the account that’s past the SOL, I worry I won’t even know about the judgement until it’s too late so I get the chance to tell the judge it’s past SOL and I’ll be in a mess.
My other motivation is because I just got married, and while I have no assets myself, my husband and I want to open a joint checking/savings and I don’t want to put his paychecks at risk.
– The bigger of the two accounts still within the SOL is Discover (16k), and is in active collections with Cavalry (though Discover still owns it). My last payment to Discover listed on my CR was in February 2010, I live in NY where the SOL Is 6 years. I believe this means the SOL will run out in March 2010. (However, it’s set to leave my credit report in December 2017… which implies the SOL may be 1 year – 180 days before that which would be July 2016?) I have access to enough funds to settle with Discover for 20-25%, but from what I have read this is pretty unlikely. So I’m worried that by initiating contact 4-7 months from when the SOL will expire, and I don’t have more than 25% to settle with, I may trigger their attention, and end up triggering a lawsuit if they won’t settle for what I can afford. They may have written me off by now… I read an analogy somewhere (forget if it was on your site) where sending letters to creditors is like hitting a sleeping rhinoceros on the head.
– The smaller of two accounts is only 1k. I could pay this in full. However, I’m worried if I do this before resolving the Discover account, the new status of “paid/settled” on my credit report may trigger Discover to think I’m now a good candidate to sue. (I read that creditors monitor your reports for changes like this)
– A third account that is past SOL (barely) is in active collections, also with Cavalry. I don’t know if this would complicate settling the Discover one.
So I’m torn on what to do. I want to resolve these accounts and now have access to some funds to do so, but I worry it will backfire.
Do you have any thoughts on:
1. whether it’s okay to send a (polite, non-form) letter to Discover offering 25% at this point in my timeline? They haven’t had any contact with me in about 5 years. My priority is to avoid a judgement on my credit report (and being on the hook for 16K if they get a judgement). Or should I contact Cavalry instead?
2. Whether sending them a letter only 4-7 months from the SOL offering 25% has a greater chance of backfiring and doing me more harm than good.
3. Whether I should wait to resolve the smaller 1k account until I’ve resolved the Discover one so it doesn’t trigger notice from Discover?
4. Should my approach change given that 2 accounts are with Cavalry (Discover + one they purchased that’s past SOL) ?
Sorry this is so long! Thanks very much for any thoughts.
I would look to make contact only if you have the ability to resolve the account. 25% settlements with Discover are just not common, but I could see yours being an account with potential to hit that target. How a collector will look at your ability to pay is favorable to getting the best deal.
A polite letter is usually a waste of time, and will often go overlooked and/or not achieve maximum benefit (save you the most). There are instances where a written hardship letter is still useful in negotiating a debt for less, but that is often when there is verbal negotiations and the written hardship explanation is requested as part of building out your file on the creditor or debt collectors side. I am doing that on a second mortgage settlement right now (much more common in secured loan transactions).
There is also the element that a written offer can reset the SOL to sue, where a verbal one will not in many states.
I would wait to resolve the smaller balance until the larger one is out of the way.
I do think your approach should change given that Cavalry is involved in your Discover account. Call me this morning for a consult to go over some things at 800-939-8357, then choose option 2 which rings to me.
Hi Michael,
Thanks so much for your thoughts, I really appreciate it. I’m at work so it’s difficult to call, I will try to find an opportunity.
You can reach me through that hot line number as late as 9 pm eastern most weekdays. You can also email me direct to coordinate a time to speak. My email address is the one you get comment notification emails from.
Hi Michael,
I owe about $4700 with Discover. I’ve have been a good consistent-payment client for almost 10 years up until this year… when I moved back home after a year working overseas on a unsuccessful business venture. Ironically, it is when I moved back to the USA this year that I have been unable to make payments. I also was not good about being in contact with Discover during my time of late payment as I didn’t have any money to offer them and had not yet thought of looking online for information on what best to do… My account got charged off Aug 31st, 2015… Fast forward, I just got a letter this week about their intent to move forward with a law suit if I don’t respond in 5 days… which I don’t want them to do! I’m young and just started a new job and want to eventually buy a house and a car and all that good stuff…
My plan is to settle because I would want to move on with my life, but that being said I just started a new job and am barely keeping my other accounts from going under (but $9000 with Chase and $2500 with Citi are already with a collections agency)… as I also have over 200k of federal student loan debt..I read through the comments and plan to call the attorneys (Suttell Hanner & White) to see if I can settle at 40% with some borrowed money… What are my options? Your thoughts are greatly appreciated and I thank you!
Thanks,
Maymie
You will want to act quickly and be convincing with your hardship and inability to pay. The other accounts being in collection will help in this regard.
Only focus on information about how little money you have to work with; do not make enough at your job to pay all your bills; and the only reason you have the money you do to offer is going to be because of a friendly loan. 40% settlements on Discover accounts with Suttell and Hammer are not a gimme. You may be able to negotiate that but may need to have a little more cash than that.
What are your plans for the other two accounts?
Thanks for your reply Michael. I left a message with an account manager and will call back again tomorrow if I don’t hear from them first.
I got a letter from Nationwide Credit Inc on behalf of Chase to settle the $9k debt for $3.7k, but at this point I don’t have money to give them a “one-time payment of the settlement amount on or before 10/23/15”. I would totally take it otherwise. The letter also says I would need to pay income taxes on that, but I’m insolvent so I don’t know if that’s still relevant. I want to call and see if they will take a payment plan or extension on that amount… what do you think?
You can often settle Chase credit card debts with collectors like Nationwide, and get time to pay. I would try to swing the payoff in a few months if you get them to agree. I have a page up dedicated to settling Chase debt.
That notice about tax implication when more than 600 dollars is being cancelled or forgiven in a settlement is a standard disclosure. I use it in customer forms too. If you are insolvent it will be a nonissue. I have an article on the subject of forgiven debt and taxes with all relevant links to the IRS>
I would call Nationwide and see what you can do to split the payments.
The last account I haven’t thought about yet…since it seems the least urgent. In terms of debt priority right now, it is settling with Discover, and not defaulting on federal loans…because from what I understand, the government will be much harder to work with!
You have payment options with federally backed student loans. Check out that site for every option available.
If I were prioritizing debts to resolve based on the little information I have to go on with your situation, I would deal with the Discover account before Chase. Discover does indeed sue just outside of charge off more so than Chase (at least currently). And Chase is with a contingency debt collector, where Discover may be going directly to an instate attorney next.
Michael,
I have an attorney (flat-rate one-time fee) who is representing me trying to settle a closed outstanding debt with Discover Card that has been turned over to another law office. We can only get them down to a single lump sum payment of 50% of the debt (debt is 14K, lump sum pymt would be 7K). They refuse to go lower on a lump sum payment. I was a Discover card member for over 12 years and good paying one. They will not take payments over time on the 7K. They go up thousands for payments.
Can you tell me how to get a better deal with my Discover collection debt? Is it possible? What would you suggest I do?
50% settlements with Discover on litigation files is sometimes as good as it will get. Are you unable to round up the money needed? Have you been sued? Who is the law firm hired by Discover?
It is a struggle to make the 7K one-time payment. I have not been sued and I am trying to prevent any lawsuits. I am not wanting to give out any information online about my lawyer or the law firm collecting for Discover. I was a good paying customer to Discover for 12 years! Thought they would take that into consideration.
When accounts default it is mostly about policies and procedures from that point. You become a loss statistic. This is not specific to Discover, it applies to nearly all credit card issuers.
Hi Michael..
I am disputing with Discover. The original charge was fraud? in Mexico. I was intoxicated and conned by con artist, vacation house seller. Discover investigated and refunded money to me without any notice they might take the money back… A month later, they take money back by saying they received my signed contract ( intoxicsted and conned) from merchant. Basically, they did not investigate and just waited the contract paper. My dispute now is the Discover’s discrepancy. Either way, once they told me they completed investigation and refund money. And they did not tell me anything about further outcome.. I did receive the bank web message stating the above and I trusted them so I did not save the message. After this issue rose, I asked them to give me the message, they denied.
Do you think I have s case??
The temporary credit Discover gave you is standard procedure. The investigation ended when they got the wet ink contract back.
I do not think you have much of a case here. I have worked on files with banks where the consumer signed for goods in similar situations and the outcome is often not favorable, even when scammed and the scam is outed.
I wish I had more optimistic feedback for you.
Thank you for your reply. I wish you could tell me optimistically too. I understood it is a standard procedure now, but what I cannot understand still is that they send me a message which stated they completed investigation and found in my favor. Nothing else was stated and a month later they charged it back to me….
When I asked them about it, they lied by saying they notify me of the future outcome change. When I requested for the message they had sent me to prove they lied, they denied. I know it is my fault to be conned, but I just cannot stand their dishonesty….
I had a judgement levied against me from discover card from 2009. I pulled my free credit repo0rt and it says the amount is 6700. I was incarcerated in 2010 until a year ago. I would like to settle with these guys but I am afraid to initiate the dialogue. I have heard discover is very difficult to deal with. And I do not want to be called into court because that would be a violation of federal probation. So I can afford to borrow three thousand dollars but what if they say that isn’t enough or try to garnish my wages? I am working but getting a job as a felon is a challenge and I would be afraid to lose my job if they moved to garnish wages (another condition of probation). Is it wise to use my incarceration as a negotiation tool? I spoke with a bankruptcy attorney and he said I already make too much money to claim bankruptcy and again I am pretty much not a big fan of going to court these days. Should I bite the bullet and just call? Or let it ride, although that seems like a terrible idea since the limits in Massachusetts are 20 years. Can I negotiate just off the settlement (6700) or are they going to say I owe 20000 with lawyer fees and interest? As for other debts i owe 6000 to capital one which is in the hands of an attorney in MA. No judgement. Older than 7 years. A repo with a balance of 5800 and i believe that is it.
What am i walking into by contacting discover after 6 years since the levied a judgement
Settling for 3k is possible, but might be a bit optimistic if you are dealing with the attorney for Discover. Sometimes debts that are really old (even judgment debts) get grabbed back by Discover. When you are able to work with the recovery department at Discover on really old debts like this, you may find getting a deal you can afford a bit more likely.
I would start with a call to Discover directly.
I have used incarceration of someone I am negotiating for as narrative for the inability to pay, and as a talking point for settlements. If you are comfortable talking about it, I would not hesitate.
I spoke at length with Michael yesterday regarding my Discover card judgement. First and foremost he is a wealth of knowledge and he definitely has our best interests at heart. So if anyone is apprehensive or skeptical or anxious or nervous…..you get the point….do not hesitate to ask him a question and do not hesitate to reach out to him in person. With that said he asked me to find out the attorney who is currently handling the judgement. I accomplished this by
1. pulling my credit report from annualcreditreport.com.
2. calling the courthouse number on the report and supplying them with the docket number.
3. That’s was it!
So now that I have the attorney info I will provide it to Michael. He will then be able to provide me their historical settling percentages if he has dealt with them before. Even if he hasn’t my conversation from yesterday has given me a solid idea of what to expect and a dialogue/ game plan to follow.
The attorney is Stephen Levine out of Boston, MA.
My 22 year old son had a Discover card which he got while in college. Last year he became ill and had to withdraw from college; this also meant he was unable to work. He now owes about $1600 including interest and late fees. He did not take any calls from Discover as they came to me on our home phone and he has not lived home. I recently received a call on my phone from a law office saying that if I was not ——, do not listen to the message as it is confidential. A letter from that law office also came in the mail, but I have not yet been able to contact my son that the letter came. Should I return the letter unopened or wait for my son to get home next month to read the letter? Is there a way he can settle for partial payment now that Discover has sold off the account? Thanks.
Discover has not been selling off unpaid credit card debts for some time now. But you can settle the debt regardless of that.
I would be proactive in this case if it were me. I would call my son, tell him about the letter, let him know I am opening it, and discuss his options with him. Can you help him settle the debt?
Hi Michael,
Terrific site, Wonderful information.
I’m w/o income for four months now. Owe discover about 11k including late fees/interest. Had a large balance transfer about 9 months ago. They offered me a 50% settlement. Thru a family gift I’m only able to get 4000 of it. I owe 2500 to citi and 750 to US Bank and working to settle those. Do you see a shot at settling w/ Discover for what I have? Should I just pay off my other two accounts w funds I have? Lastly, if 50% is best possible option, do you think they’d give me a period of time to make payments since I’m short? Thanks, Rex
Discover, like all banks regulated by the OCC, cannot offer settlement payment terms that extend beyond 94 days on pre-charge-off debt. Once Discover charges off your account, which will be in the next 2 to 3 months, there is a chance they would approve longer repayment terms. That can happen direct with Discover, or through one of the debt collectors they use.
Discover does place accounts with collection attorneys. Is there no way for you to raise the additional funds you need? How will you raise the money you need if you settle with Discover and US bank early on?
I occasionally see Discover get closer to the percentage you need them to be. You have to really go for it with your negotiations and be consistent. You also typically need a sincere, and even documented hardship.
Hi Michael, I did my settlement today with the Discover Card attorney, but I have court tomorrow for this case with Discover. Do I need to be present in the court if its already done the settlement with Discover?
Please let me know.
Thank you
I would show up if it were me. I would want to make sure that the case does not progress any further by mistake, and settling the day before court is cutting it close.
Hi Michael,
In short I was sued by Discover 8 years ago and still paying. They Lawyers that originally did the suing on behalf of Discover, have handed over my case to new Lawyers as of mid last year. The originally arrangement with the courts was I pay 25$ a month and a 1/3 of my income tax each year. I did this and stayed up to date.. I did receive notice that I would be dealing with new lawyers in the middle of last year, however did not give it much thought because I was paid through the year with the original lawyers. When January came of this year I wasn’t sure who to send the check to and figured I would hear from them soon and I would just send in my check for 300 covering this year. I heard from them again only through papers being served for non payment. I called the new lawyers saying that I wasn’t looking to be in default I just wasn’t sure who I was paying now. The gave a case number and address in which I sent the 300 dollars too. After a few weeks I didn’t hear anything about the court date being disregarded, so I called them back to see what was happening. The girl I got this time really had her panties in a bunch and was extremely rude and mean to me.. I understand I got myself into trouble and I needed to fix this and had been doing it for the last 8 yrs, some how this girl just viewed me as a totally loser and made sure I knew what she thought by the way I was treated. What I did get from her is that my 300 was received and cashed. But it meant nothing other then just 300 for that month. I explained to her I didn’t understand as it should settle me for the year as the courts had told me it was 25 a month. Then she told me if the courts told 25 month then its 25 month, not 300. I’m currently unemployed an I had to borrow the 300 to pay this and the courts hearing still stands for default. I was so upset at how this girl made me feel I just hung up with her. Knowing I still needed to resolve this and not wanting to go to court. I called them back, this time I have to admit I got a MUCH nicer person who actually just talked to me. The thing is now they say I have to pay 165 a month or lowest settlement is 5900. I don’t have either, a friend of mine said they would lend 4000 to pay off but that was their bottom line. I’m due in court in 2 weeks, what should I do? Do I call and see if they will except the 4k?
First, what is the name of the new debt collection law firm, and what is the name of the collector who was demeaning?
Next, yes, you could possibly negotiate this down to $4,000.00. What is the current balance still owed? Do you have any other unresolved bills out there besides this one with Discover?
I have a discover account which I just received summons in civil action for $1800;
Well I do want to settle for $500 but the law firm’s collection agency wants me to pay $1200 which they want me to pay $360 immediately and the remaining by the end of the month. i cannot pay since am international student and cant get employment anywhere.i just do people’s homework and test for them and they pay me a little fee
Is there a way i can go about this if they still refuse the $500 ?
You might be able to get them down a hundred or three more dollars. If you can raise the money, you could look to negotiate some middle ground.
If you cannot get this resolved, and do not defend the lawsuit, you will likely end up with a judgment. You can negotiate judgments too, but look to avoid that if possible, but I know it is not always an option.
How can i defend the lawsuit? Dispute and ask for validation?
Disputing and requesting validation from Discover, or the attorney suing you, is not an option… at least not in the traditional sense most people write about online. That process is something you do before being sued. Once sued you have to do everything in a much more formalized way.
Your balance is too small to make sense of hiring an attorney, but you should talk to one.
If your income is low enough to qualify for low income legal aid, look an office near you.
Some colleges with law programs offer clinics on this sort of thing (run by students and professors).
NOLO Press puts out a good book on defending yourself in court.
Hello,
I have a Discover Bank card that was charged off in December of 2010 for the amount of $4457 in California. It has not been sold to an outside party and Discover continues to report the charge off monthly. I am trying to obtain a Parent Plus Loan for a child in college and this old debt is affecting the approval. I was told to contact Discover and request a settlement. With this debt being so old and the SOL has passed, what amount should I request to Discover as a settlement offer? Thank you for your help.
I rarely see Discover accounts settle for less than 40 percent. I have also seen some accounts that are too old to sue for collection be flagged for not so great offers. Post an update if you are unable to get to at least 50 percent.
When you call Discover, you may learn that your account is with a debt collection agency, which can mean you will be settling with the collector, and not Discover bank directly. That is normal.
Be sure to get the deal you negotiate in writing.
Hi Michael,
I wanted to let you know that I was able to settle my charged off account with Discover for 30% of the amount owed!
Thanks for your help and advise.
That is a great outcome Carolyn!
Did you work that out with Discover, or a third party collector?
Directly with Discover. They will be sending me the offer letter via email within a few days and said once they receive payment they will send me another letter that the account had been settled and closed
Great job, and thanks much for posting the update for others to read about too!
I have an old account with discover card that charged off 5 years ago but is still reporting on my credit report as past due $8500. My original credit limit was 6600 but with fees and what not they are showing around $8500. I haven’t received any calls or letters and as far as I can tell it is still with discover card. It is slated to come off my credit report in October of this year but I would still like to settle it and be done with it. My fear is if I call in and they don’t want to negotiate then come after me for the entire deal plus whatever they can come up with. What would be my best way to approach them? Thanks for any help
What state are you in James? I want to determine you cannot be sued legitimately due to state laws that limit that. I can offer better feedback to you once you post that information.
New mexico
They cannot sue legitimately at this point. That usually means you are in a better position to negotiate the lowest settlement possible. Discover does not often go below 40 percent, but I have seen a few less than that.
How much money can you pull together to offer as a settlement?
What goal are you looking to accomplish by settling this late in the collection cycle, and with the Discover account soon being taken off your credit reports?
I could prob do 40-60% lump sum. Even tho it will fall off my credit report can’t they still come after me down the road? I thought it would be good to get it all settled and done with but not sure if that’s a good idea or not. Should I just wait for it to fall off my report and hope nothing comes of it? If I do contact to settle what’s my best approach with them? Thanks
The debt never truly disappears. Even after you can no longer legitimately be sued in New Mexico, and the Discover card charge off is removed from your credit reports, the debt can still be collected. But you can put a stop to collection calls and letters should you choose to at that point.
I understand wanting to resolve the debt for the simple fact its out there. Contact Discover and find out if they have the account placed with an outside agency for collection. Post the name of that company if so. If Discover has your account internally, let them know you are aware you cannot be sued, and the account is set to fall off your credit in a couple months. You want to do the right thing, and resolve the debt with them, and can pull together xxxx amount, but no more.
You actually could lower your credit scores with a recent settlement on a stale old collection account like this. That would likely change again when Discover falls off your reports later this year, but still….
Is there any bad from contacting them and say they don’t want to settle for a reasonable amount? What do you realistically think I could settle for is 20-25% unrealistic?
Given how old the account is, you have a shot at settling with debt collector for Discover at closer to the 20 percent mark. But your questions is about what is most realistic, any that would be the 40 to 50 percent mark.
There can be concerns about calling creditors and debt collectors to resolve debts that have passed your states SOL to sue. There are some states where you can conceivably reset the SOL verbally. New Mexico is not one of them, but if you are concerned about it, contact a consumer law attorney in NM with debt defense experience. That will set your mind at ease.
Dear Micheal,
Thanks for your prompt response. I have a few questions based on your reply.
1) I had read somewhere in your posts that it is usually better to contact the original creditor i.e Discover before contacting the attorney collector. Any reason I shouldn’t start with that.
2) I am ready to settle with discover but have a very limited amount of money. So wouldn’t lawyer fees hurt my settlement fund?
3) I just realized that the last payment made in this account was in 2010. Does this mean that it will not be on my credit history starting 2017? Would I still have to pay them after 2017??
Looking forward to your reply.
Regards
Dear Michael ,
I had a discover card with a total balance now according to them of 4700. I have been living in India for the past 5 years and was not even aware of this card. I just happen to notice this when I randomly checked my credit report.
This debt is still owned by discover and they have filed a lawsuit against me using a attorney from the weltman weingburg and Reis in Columbus Ohio.
I would like to settle this debt as might someday move back and would need a good credit. As of now they really have no choice but to settle.
So my question. Is should I call discover or the attorneys ?? And how much would be a good amount to settle for??
Settling Discover debt, that is now a judgment, is generally not going to happen for under 50%. But you are in a different position – with your being out of country – and no way to enforce payment. You could shoot for a lower settlement.
You would be calling the attorney for Discover to negotiate the deal. Focus on your having left the US over financial difficulty, and are just trying to do the right thing. If they do not approve a much lower offer, try to get to 40%. Take your time if you are not in a hurry. Post an update with what happens on the first effort and lets go from there.
As an alternative option, and perhaps you may mention to the collector you connect with at Weltman Weinburg and Reis, you can consult with an experienced debt defense attorney in the area where they sued you. There may be issues with how you were served, and jurisdiction (you were out of the country). You may find it is less expensive to work with an attorney to vacate the judgment (if advisable in that state and court), than it would be to settle.
Would you like me to email you contact details for attorneys I know of? Just post the name of a larger city near the court Discover sued you in.
Hi Michael,
Thank you for all of the time, effort and reasonable advice you have put out here. Very helpful!
I am assisting my mother-in-law in settling her debt with Discovery. On Dec. 6, 2013 I called Discovery for her as we realized her credit card debt was out of control. We called looking for a settlement on about 9k of debt but after a while it became clear she had only missed one payment so they didn’t really take us seriously. It’s now been about 13 months and we haven’t had any contact with them.
Mom is older, in a retirement home with no car and no future need for credit. She has no pension and social security doesn’t even cover the retirement home. We are helping her meet that cost. She has no car anymore and no plans to get one.
All that said, we do believe in paying our debts and are willing to help her pay what she originally owed before all the fees piled up.
We recently got a letter in the mail from Northstar Location Services, LLC. It says they have been authorized by their client, Discover Bank, to settle the account for $4,567.85 which is 41% of the current balance due. That is about what, in our opinion, is fairly owed before all the interest charges and fees.
This settlement offer is good until 1/27/15. She can pay by phone, send in a check, by credit card(!) or by going to their website. They also have what looks like standard information on tax consequences etc.
Mom has no credit right now, has no way of paying off this debt (mostly medical expenses) and is basically uncollectible. Discovery is the only debt she has.
1. Is it worth trying to negotiate further from here? Every dollar does count and means better care for Mom (I lost my mom a few years back and I am fortunate to have a wonderful woman as my mother-in-law, I consider her my mom too) or at least the chance for a pedicure or to take her out for a movie instead of just renting videos.
2. Do we need more information in writing? Is it enough that they used the word “settle” in the letter or do we something saying, “This account will be considered paid in full and closed.”
3. Is it worth calling Discovery directly now?
4. Is it safe to call from our phones? At the risk of sounding paranoid here I don’t want the debt collection people to start calling my phone number!
5. Is it safe to pay with our credit cards? We would be paying off Mom’s debt and using our credit cards would be convenient as we earn miles on them and pay them off every month. We would be able to pay it off this month if they settle at the amount stated in the letter.
6. If not safe to pay with our credit cards (I have nightmares about suddenly seeing charges adding up to the rest of what Mom owes on our cards!) should we pay through a special checking account we open only for this purpose and only put the amount of money we settle for in? Again, maybe I am being overly cautious but makes me nervous even sending Northstar a check from our checking account. Can they use that to then deduct the funds from our account? Sounds a bit silly when I put it on paper but I know that I don’t know everything about debt and how it works. By paying for Mom’s debt perhaps we are somehow taking it on ourselves?
I think that’s it. I did try to call but it’s Sunday and it didn’t seem to go through. You appear to be very quick in responding here so, despite the holiday weekend, I will try this!
Thank you again for all of your help!
– Scott
You could call Northstar Location Services and attempt to negotiate a lower settlement deal. Just know going in that I see very few Discover credit cards get settled for less than 40 percent. Those files that do get negotiated for less than the low side of average do tend to mirror the situation you are sharing:
1. Debt collector for Discover is not a local or same state attorney to card holder.
2. Discover customer is in a fixed income situation, judgment proof, and no need for credit.
The collection and offer letter from Northstar is in line with what I would look for in a debt settlement letter.
Calling Discover Card, now that they have a debt collector working her account, will result in being passed on to the debt collector. Discover has a contract/agreement with Northstar Location Services, so working anything out directly with the creditor is unlikely, at least during the time frame Discover has agreed to let Northstar try to collect.
It is safe to call the debt collector from your phone. They will not call to harass. If they do, post an update and I can assist you from there. If you are hyper concerned about it, use one of the tips I suggest for answering and calling debt collectors. For your situation and concern, I would like the Google voice option.
In this situation, I would personally not have a problem paying the settlement with my credit card. If any problem were to arise, post an update about it and we can go from there. Your concerns in this regard, and setting up a different account for payment, are not without reason, it is just that those reasons are mostly overblown nowadays when dealing with legitimate debt collectors. If you are hyper concerned about this (as in it will keep you awake), do just as you outlined, and set up a different settlement bank account, or use certified funds from your current bank, so that proof of payment can be easily tracked and proof obtained if ever necessary.
If it were me trying to work out the best deal from my mother in law, whom I also have the highest regard for, I would first look to negotiate a better savings deal than what Northstar Location sent in that offer letter. I would continue to hold out for a better deal unless I was in any way concerned about later collection efforts, which could include her being sued for the account.
Her being sued does not mean much when her only income is protected from such things. It is a bit inconvenient though.
One last thing would be to be prepared to provide a letter of authorization signed by mom. If you already have a POA, that will work.
Hi Michael,
Thank you for the speedy and excellent reply!
I have set up a google number.
I will talk with my wife about it tonight but am leaning towards using my credit card.
I will get home too late tonight to call them but will call them in the morning tomorrow. I will make sure they understand the situation and then ask them to settle for a lower payment. If they will, great! But if they won’t, then I will ask how long they have authorization from Discovery to collect on this account.
I will then call back the day before they lose the contract and increase the offer. If they take it, great! If not I will wait until the day they lose the contract and call again with my final offer.
I will have a signed authorization letter from mom ready to go.
Two questions:
1. If they do agree to a lower amount how would you suggest I get that in writing? Is an email acceptable? I can set up a temporary email account pretty easily. Is a fax better? I have a fax at home but would prefer not to give it out. Maybe a fax to a local Staples store?
2. If they want the authorization letter I should be able to scan and send it by email, yes? Or should I be prepared to send it another way? Or if I conference call mom in so she can verbally authorize it would that work?
I think that’s all I can think of. Thank you again for creating this website and your timely assistance! To be honest, seems too good to be true! If all of this works out well and we are able to put this behind us I hope there is a way I can repay you!
– Scott
Fax is the most common method, though email is becoming an option more and more. I would not worry about giving out a dedicated fax number. But if you are, I think you can still get a free one from efax, or someone like them.
Be prepared to fax in the letter of authorization, but here again, email is only now being adapted more for this type of communication. Ask for an email option, but settle for fax.
Verbal authorization is an option. I would ask them if that is preferred, as it is immediate, and you often do not have to wait for electronic communication to work their way through Northstar Locations Services collection system.
I know where your coming from on what this site represents. It is real, and true. But let me try and dash the esteem you have reached for it… if you find value from the site, please consider donating money to a legal aid office near you, and perhaps one with a focus on elder law (for mom), or grab a bit of extra food for donation to the food bank in your area.
Hi Michael,
Just thought I would check back in with an update. Northstar was very professional and good to work with. I keep waiting for the other shoe to drop but so far it hasn’t!
1. They seemed to prefer email over voice. I emailed them a copy of the financial authorization and they came back within 24 hours with a revised offer that was a few hundred less than their previous.
2. I emailed them back expressing appreciation for their willingness to come down a bit but remained firm that the best I could do was $3,000. I then expected to be waiting until the last day before their authorization ran out to call again.
3. However, much to my surprise and contentment they emailed an offer at the $3,000 level! I tried to go onlline to pay it but wasn’t comfortable with the process as the only option seemed to show the full $11k plus amount.
4. I missed their Saturday hours but got up extra early this morning to call in. I got verbal reassurances that the $3k will settle the matter and paid by credit card over the phone. I’ve checked my credit card online and indeed only $3k was charged.
Here is my, possible last!, question.
How do I know that this is truly over for my mom? I have a confirmation number and the paperwork with the offer. I’ve requested paperwork confirming the payment by email and that may be on it’s way.
Should I call Discover card? Maybe wait a month or two and then check her credit report? Is there any way to tell definitively that this is behind her now?
Again, thank you for all of your invaluable help and advice. I am very, very skeptical of something for nothing, especially on the internet, but this was the real deal and our whole family is very grateful!!
– Scott
Your Discover Card settlement letter, and your credit card records that show payment was made before the offer deadline on the settlement agreement, both combine to prove this is done. No matter what Discover, or a debt collector working for them may err in, you have the proof you need. If, for any reason, something occurs that concerns you about the finality of the settlement, post an update and I can help you from there.
Generally speaking, you would wait about 60 days, then check the credit reports to see that Discover Card is now reflecting a zero balance owed. Even if your mom has no need for credit any longer, it would be good to correct Discover if they do not update her reports. Post what you see in a couple months, and I can help you go from there if need be.
Thank you for posting about your experiences negotiating with Northstar Location Services on a Discover Card bill. That feedback will help many later readers approach them with less anxiety.
Hi,
I had commented on this post awhile back because I received an Attorney Placement Pending Letter. At the time I had no funds, so did nothing. Recently I was served a summons and now have 14 days to answer. My balanced owed is $6800 and I have $3000 cash free that I can give. What are my best options? Should I call the attorney and see if they will take the $3000, and how do I propose this deal? Or should I answer the summons? And how would I right an answer and then what would I do in court?
I lost my job and have been gathering all the money I can. I have other credit cards I owed as well but none of them are going this route, they’ve all been sold off and I’m getting settlement offers for 20% of my balances, but because discover is pursuing court I would like to get them off my back first.
Thanks
Jon
PS. I’m from New York
I would encourage you to first speak with an experienced debt collection defense attorney about filing an answer, and even going further with defending the action, if the account cannot be settled with Discover for the 3k you have now.
Answering the complaint, and participating in the discovery process, will buy you time. Perhaps more than 6 months. That may allow you to pull together more funds if you need to, or will show the attorney you are not an easy lay up, and why they should settle for 50 percent-ish. Most Discover accounts are authorized to settle at 50% in my experience (though there are exceptions).
What area of New York are you in?
I live on Long Island, in Suffolk County. Do you have any attorney recommendations? What are the fees associated?
Thanks.
I sent you an email with contact details to an experienced attorney you can consult with on Long Island. Fees will vary from one attorney to the next, and from one file and set of circumstances to the next. You can talk that over with the attorney before deciding anything.
If the cost of representation is more than 50% of the amount of the suit, the help is often not going to be cost effective when defending against an original creditor like Discover.
Post an update as you make progress.
I have a discover card that I just received summons from krisor and associates. I owe about 12k. I was unemployed a year ago for 8 months and from behind on many cards. All of the rest have settled for payment plans on principal.
please advise what are my options. I have been making payments of 100/month. I called krisor. They said I can go to court and accept responsibility for loan and just keep making payments or not go and have default judgment and just keep making payments.. Either way, as long as I make payments timely, that would be fine.
I would like to just keep making payments, but want to know consequences if judgment is default or if I go and accept responsibility of account.
I like Discover Bank when it comes to collection policy and procedures that are predictable and consistent. Unfortunately, there are reasons not to trust the attorneys collecting for Discover.
Whether you go to court and accept responsibility for the debt, or do nothing about the suit, you will end up with the same thing… a judgment. Once a judgment, it does not matter whether it was by default or summary. The collector you spoke with at Krisor and Associates is going to look after the firm and Discover, not you. In that effort, they have already misled you, as you appear to associate a difference with the outcomes presented. And if you were left with the impression that paying a 100 dollars a month was going to be okay, that is false too.
The consequence of the judgment may be unavoidable, depending on your financial circumstances, but they include risk of wage garnishment, bank account levy, and property lien, all depending on state protections.
Your credit reports will likely be further damaged by a judgment appearing on them.
What state are you in?
What amount of money can you pull together in order to settle the lawsuit for less than what they are trying to collect?
I am in Lafayette, Indiana. I cannot pull in enough for a one time settlement. I could possibly settle for 50-60% over 24 months given the large balance of about $12K.
I sent you an email to 4 different attorneys with debt defense experience. None of them are all that close to you, but distance does not have to be an issue in these cases. You can also ask one of the attorneys I sent you if they can refer you to someone nearer you, that also has their same level of experience.
I have a 17k debt with discovercard. I stopped making payments in June of 2013. I was focused on settling other debt and entered a hardship program at 0% interest with penalties forgiven in deb of 2014. I made three payments and then stopped making payments until oct 2014 where i made one payment. Since i became delinquent the rep said too avoid a charge off I would have to bring the account current with the missing hardship payments. I casually inquired about settlement options (if my friend loaned me money) since its about to be charged off even withstanding my oct payment b/c I am in the hardship program. The rep answered that there weren’t any settlement options. Now my question is when I have the 40-50% sum to potentially settle the account what is the best strategy?
Since I am in the hardship program does that mean, I have to wait until a charge off occurs before I get traction in negotiating a settlement? Thanks
Your account may need to drop off the hardship plan in order for the Discover recovery rep to be able to discuss settlement options with you, or your account may be flagged.
How new is your account (when did you open it)?
In what period were the balance of charges created on the credit card? I am looking for whether the account was maxed out quickly.
Were there any large cash advances on the card in the 12 month period prior to payments going into the Discover hardship payment plan?
Have you heard from any debt collectors outside of Discover employees at this point?
Hi Michael
I recently was laid off and have been having trouble making my mortgage, car payment and putting food on the table let alone paying for credit cards. So I stopped paying about 6 months ago. It seems many of them are charging them off and selling them to collection agencies. Discover does not seem to be charging off though as I just received a letter that my account is Pending Attorney Placement. So I have a few questions.
1) I lack the funds or ability to get the funds to make a legitimate settlement offer at this point in time. Is there anyway I can delay a lawsuit or judgement being placed and get a 50% settlement from discover in say 6 months to a year? If not what will happen when its given to an attorney?
2) I also don’t have the funds to settle any of my other cards which have been charged off and sold. Can I expect attorney notices or summons from these cards or will they just keep being sold?
Cliff Notes version: I lost my job and couldnt afford to pay my credit cards so stopped paying. I own a home with a mortgage and finance a car. I want to settle with these companies as soon as I can but that will be at minimum anywhere between 6 months to 18 months, and I want to protect my house or car from being taken.
Aside from from filing bankruptcy, there really is no sure fire way to avoid being sued. You can, however, get creative with how you avoid a judgment, if time is what you need to buy.
1. If sued by Discover you can defend against the suit and buy many months time to save up and settle. Getting Discover to agree to 50% settlement once sued is no gimme, but you do buy the time, and the option to prevent a judgment in the court record this way.
2. Post the names of other creditors and debt buyers you are dealing with. I can better give you an impression of what to expect moving forward.
What state are you in?
Hi,
I am in New York. Other than Dsicover I have/had a few cards with Citi and Chase. I believe some of the Citi ones have been sold to United Collections Bureau or UCB.
Jon
UCB is not much of a debt buyer, so that is likely an assignment, or contingency collection. Citi and Chase both sell debts, where Discover has not been much of a seller of their defaulted accounts.
Your risks of being sued by Citi, or Chase, are small. But being sued by a debt buyer that picks up one of those accounts is real. As you learn the identity of each new debt collector, look for information about them on this site (I cover most of the bigger firms), or update this comment thread.
If you are sued by Discover, working with an experienced collection defense attorney in New York (there are several), could buy you the many months you need. Post an update if/when that occurs.
Guys,
I have been going round and round with Discover for 4 years over a $4,680 debt. Discover sent me to collections, Van Ru collection agency. I have received every offer possible to settle the debt from the 60% down to 25%. Once they put you into collections, ignore the letters at first. The letters that say, “This is a one time offer” are lying. It is their way to influence you to respond. If they call you, offer 20%. The debt collector will tell you they cannot accept and are bound by what Discover dictates. This is also a load of crap. The debt collector is paid a percentage “commission”, so the more they collect the higher their payoff. Keep making the 20% offer. If you eventually get the 25% offer, make sure you get a 6 month payment plan. And then be thankful you just settled for 25 cents on the dollar and it goes away.
Some debt collectors can certainly fabricate stuff, others are not full of it.
Your credit card with Discover went on one collection track. Others can indeed experience what you have, and see those lower offers, usually longer down the life cycle of a debt. Some people will not see those offers with collectors as low as you have. Some will be sued by waiting for what you describe to happen.
6 months to pay is not a gimme with all negotiated settlements.
I am currently being sued by Winn Law Group out of Fullerton, CA on behalf of Discover Bank for about $4870 (if that is even the right amount). I have filed a response and am scheduled to meet up for case management to try and work it out. Part of the case management process requires both parties to try to work it out before the meeting. I’ve contacted WLG and tried negotiating a settlement for $1500, providing even a letter from work stating I will be jobless next month and have a newborn to care for (not that they care about anyone’s financial situation). I was told by a negotiator over the phone that I could afford to offer 1500 (roughly 30%) of the total balance, which she claimed was $5180 (I couldn’t care less about the few hundred dollar difference at the time). She needs to submit the request for approval and realistically told me 1500 would probably get rejected and suggested 2k. I learned today that the 1500 offer was rejected and a final counter-offer of 3600 (~75%) was given. I was not even given a second chance to up my offer for submitting for approval to see if they can meet me halfway. Must be their company policy but the rep, who was in training and the conversation was listened in by the person I negotiated with, kept repeating he’s sorry but that’s the final offer.
I’m also in the process of completing discovery requested from them and can’t afford a lawyer to help with this. My desperate research online varies from careful objections to items I am unsure of and only admitting true to items I know for sure are true. There seems to both a calm or a paranoid approach to completing discovery. The calm approach says to answer everything as best as I can, and anything I am unsure of, I should flat out deny for now. The paranoid approach says discovery can make or break me and has a serious tone to it that scares me, mostly cause I don’t understand what they’re asking for cause it’s lawyer-ish jargon or just plain vague.
Did I say something to make them want 3600 instead of a lower amount? Any advice on what to do overall?
Kaydee – The paranoid approach to discovery is the correct one. Lawsuits are a contest. Each side looks for an advantage. Those discovery requests and answers are part of gaining an advantage in the contest.
You are being sued by your original creditor who is using a competent law firm. Discover has the advantage even if you were to have the assistance of a skilled debt defense attorney. That advantage is amplified with you working on your own.
Settling with them would be ideal. You should target a more realistic amount of 50% (maybe a touch higher even), but fight for 40-ish percent if you can, or must.
I cannot say why they came back with the 75%. I do know that lower amounts get approved by Discover in these instances, but I also see where people can appear much more collectable on paper than they really are, and the collection shops software will recommend holding to a settlement number. When that happens, your job is to get them to see beyond the data. Hard to do with a trainee.
You are buying time with your defense, but I would use that time to try to gather up the money for settling this.
Thanks for the advice. Looking back, maybe I shouldn’t have sent in that paper from my employer stating my temporary position ends at the end of this month. Perhaps they saw who the employer was, Stanford University, and decided I must have some fancy, high-paying job. If I did, I wouldn’t be in this situation.
I am really concerned because I am currently responding to Discovery and can’t afford an attorney for help cause it’s due by next Thursday.
In California, I got info that says I need to reply to Discovery by next Thursday. Does this mean I need to also file my responses as well as the proof of service? Also, are Admissions, Intergos, and Special Interogs all under oath or only the Admissions?
I really need help with Discovery. I doubt you’re allowed to guide me through each question in the Discovery, can you (Admission, Interogs, and Special Interogs)? If not, maybe you can give me general guidelines as to how to answer them.
Discover sent me billing statements (2 months that I still paid for Oct and Nov 2011 and stopped payments beginning Dec 2011 through Jun 2012 when they sent to collections). They also included a copy of the card agreement. The request for admission of the billing statements they sent me do not list the full account number. Like one of your previous replies, this info may not be in Discover’s favor, but is it okay to admit to applying and opening a card with them and deny other related info such as receiving a cardholder agreement. Also, I have no idea what “All conditions precedent to payment of the unpaid principal balance due on your Discover Bank account have been performed, waived, satisfied, or extinguished” means or how to respond to “You have no valid affirmative defenses to this action.”
For example, I read online from another site (https://www.friedmaniverson.com/consumer/blog/debt-collection/how-to-answer-discovery-in-a-debt-collection-lawsuit/) that admission replies can be a simple deny or admit. What if I don’t completely agree with a statement, for example, that the statements they want to admit are genuine? They don’t include ALL my statements with them, which I no longer have, but can I deny this statement at all?
I also have no what the contract section of the Interogs mean by
1) “Identify each agreement excused and state why performance was excused”
2) “Identify each agreement terminated by mutual agreement and state why it was terminated, including dates”, and
3) “Identify each unenforceable agreement and state the facts upon which your answer is based.”
I’m afraid that if I deny certain statements, such as one that says my last payment occurred on Nov 17 2011 that actually is on my bank statement, they will later compel for bank statements.
I am sleep-deprived because of a 1 mo old newborn and struggling to format the discovery properly before sending it out. Please help! Any help would be gratefully appreciated!!
I do not think the employer set off any bells, but the letter you sent to Discover itself can create a scenario where someone now has to look over your account, and make a determination, or code the file if you will. Similar to how a debt validation request can bring legal review, or set things in motion that the internal compliance and legal teams at creditors and collectors have already built into work flow.
I cannot help you with discovery or pleadings.
It is not uncommon to admit in part, or deny in part, in answer to interrogatories.
If you get to the point where your past bank statements become a concern, you took this too far, if your goal is settling.
I’m updating what’s happened within the past couple of weeks. I attended the case management conference and of course the Discover rep requested a trial set date but since we are in negotiation, we have two months to try and settle this before the trial setting date at the end of September. The man who represented Discover had (I think) his 4-5 year old child with him and sympathized that I have a newborn to care for at home, that it isn’t easy. He said to just keep calling to negotiate for a lower amount and wished me luck.
Discovery aside, I am still trying to settle for a more affordable amount. In mid July, I was first offered the 75% or 3600 out of 4800 when I first proposed for 2000. Then a few days ago, I called WLG again and asked the negotiator to ask the account manager to go lower and they said 2800 or 55%. I can’t afford this amount, especially in a lump sum. I think though if I keep calling, they might budge a bit.
Have you heard of a complaint that has the option to settle the account in it? I know someone who got served a complain and they claim the complaint provided contact info to settle account. It sounded like the original creditor assigned the account to a debt collection law firm with the option of settling it out of court. Is this common?
She recommended I call the my original creditor, Discover, to try and settle. I tried and Discover said that once an account has been assigned to a debt collection law firm, the creditors do not deal with it, which doesn’t make sense completely because they still own the debt, but I guess it’s their policy to not muddle with an account once it’s been assigned.
Thoughts or word of advice?
Greatly appreciated!
The vast majority of situations, the original creditor will refer you to the debt collector, or collection attorney in your case, rather than work something out with you directly. Discover contracted with the Winn Law Group, and has them collecting on many Discover Card accounts. They have an obligation to their contract collectors, and will not circumvent that, with perhaps the rarest of circumstances.
You are real close to what I see as the norm for settling at this stage of collection, which is 50%. How much lower do you need this to be before you can fund it?
Hi Michael,
Here’s an update:
Since I last spoke with Winn Law Group (WLG) for Discover in Sept 2014, I was offered 58% or 2800 but I simply can’t afford it.
finances have taken a turn for the worst since the delivery of my first child last summer. I now have a 7 month old child at home while working part-time and can barely pay the bills. My husband works but he doesn’t make much either. Even my student loan is on deferment. My trial date is set for the end of this January and I’d rather settle before then than miss a day of work I simply can’t afford.
I recently settled for 17% with Nationwide Credit Inc. for Chase and have about $13k over four other cards (Citi, GE Capital, Visa, and CareCredit) that I am hoping to settle in the next year or two, but finances are extremely tight right now and I will need to look for full-time work in the near future.
I was also able to borrow $1k and the plan was to make installment payments on the last amount WLG offered me, which was 2800 in 3 payments, thinking I could pay the remaining payments with my husband’s credit card. Sadly, I found out they do not accept credit cards as a form of payment so I am really screwed for offering to make payments.
Plus they are now asking me to provide proof of income and a list of expenses so they can submit the offer to their committee/client. Regretfully, I have already emailed them a list of my expenses but will wait until tomorrow to fax in my recent bank statement, which is completely NOT representative of normal activity due to the holiday season. It shows many purchases one would expect of the holiday season but because the place I work at was closed for half of December, I was not paid for 2 whole weeks, hence, my shown income does not reflect the activity shown.
My questions for you are:
1. Is this request for proof of income and list of expenses a common practice at Discover or other creditors or debt collection agencies? Or is this another scare tactic to discourage people to not make lower offers?
2. Should I go ahead and send in the bank statement? Is there a reason not to?
3. Am I overthinking/analyzing the income/purchase situation? Shall I
4. I am not considering bankruptcy at all but would it be a good idea, in your experience, to include the additional $13k debt info so that Discover sees that I have other bigger debt to worry about and they should take whatever I offer before I end up settling with the ‘others’ first or have no money to pay them at all?
5. Have you heard at all whether WLG or Discover would take payment in the form of credit cards at all or advice on what to do here?
I will talk about my $13k debt in the general section unless there is a specific thread for each of those creditors.
Thank you,
Kaydee
1. The request for that type of detail from a debt collector tends to be when an attorney is involved, and when there is already a court action. The attorney suing for Discover Card has a fair amount of autonomy in there actions, as they are independent from the bank. Getting this information from you can make their case stronger. It is likely not a Discover policy, but a regular part of developing collection cases by the law firm.
2. There are many reasons to send/not send information to an attorney suing you. This boils down to whether what you send supports your position that they should settle with you.
3. No, you are not over thinking any of this. You have to be critical of what you do when working something out with a debt collector. Winn Law Group is, at all times, acting in the best interest of Discover, and themselves. You have to cover yourself, or work with an experienced attorney of your own.
4. When I am working files with multiple debts, it is common for me to point out, or coach members to point out, the other debts. It is a tactic that works better when not in litigation, as that can remove and perceived fear of loss (if you do not want my money… I have several creditors behind you that might be happy to have it).
Debt collectors have real time access to your credit reports, so they often can see the other debts. Not all attorneys see that and use it as a motivating factor to settle. Pointing out the debt as what can potentially push you to file bankruptcy should not be a bluff. You really should consider chapter 7 if you qualify.
5. Debt collectors accepting credit card payments requires a merchant account. Winn may not have one, or just has a policy of not accepting settlement payments via credit cards that can be disputed and charged back.
If you use the search box in the upper right, you will find dedicated pages with information and ongoing discussions about each of those remaining creditors you listed. If you are dealing with a debt collector on any of those accounts, search the collectors name too. If I do not cover a creditor, or debt collector yet on the site, use the ask Michael feature at the top of the page and submit a new question. I can cover that as a new page for other readers too.
My husband and I experienced a terrible financial hardship situation while living in California in 2006-2009 due mainly to his already fledgling business completely failing when the economic downturn hit. We had gotten ourselves into heaps of credit card debt trying to keep the business afloat as long as we could (which at the time seemed prudent). We left CA in 2009 and lived in multiple states trying to figure out a better situation and my husband was out of work for years.
Since our credit was horrible, and we were barely making it, we just focused on day to day living and did not use any consumer credit, apply for loans or anything like that so our credit wasn’t a huge consideration. We considered bankruptcy at different times but didn’t even have the money to do that. We did get offered a settlement for the vehicle that we were driving that we still owed on so we settled on that loan in 2010, but other than that, none of our other creditors seemed to know where we were. We weren’t purposely hiding but we just moved a lot. At one point we finally decided to pull our credit reports to see the damage and noticed there was a judgment in CA for $12,000 from 2008. Well, we were still living in CA in 2008 but never knew about the court date and were never served! It was from Discover and I have read a lot on your site about how tough they are to deal with. I took some advice from a website in 2007 and asked for “validation of the debt” in an effort to buy us some time (still thinking we would turn our business around and be able to pay) but now that I’ve read your site, I think that probably stirred the pot and caused them to really go after us!
So to this point, they have not really had the means to do much to us as the judgment is in my husband’s name and he didn’t have a job to garnish wages from. Now, he has a new job in Florida and we are wondering what to do at this point. We could start saving up a lump sum and then contact Discover to offer a settlement but if they don’t accept, I’m afraid then they will know where we are, transfer the judgment to FL and start garnishing my husband’s wages. We are slowly getting back on our feet but we also have 4 children so it would be very difficult if they took a big chunk of his paycheck every week. I understand CA allows 10% annual interest so that $12000 judgment may now be inflated to over $18,000, is that right? The original credit limit on the card was $7500 but it inflated quickly when we stopped being able to pay. We know we need to deal with it at some point and our Transunion credit report says it will stop reporting this judgment in 2015 so if we can get it dealt with by then, then we might be able to get it wiped (otherwise they will likely renew it).
How should we proceed? Try to offer a settlement with Discover, starting at 25% of the original judgment of $12,000 once we have a lump sum saved up? Should we attempt this ourselves or hire an attorney in CA? I’m sure we have no recourse for the fact that we never even knew about the court date since several years have passed? We hope to be able to buy a house at some point in the next few years if we can clean up our credit. Thanks for any advice you can offer!
Actually, you do still have recourse for challenging the suit and trying to get it vacated based on what sounds like sewer service. You will want to consult with an attorney in California about pursuing this path, and will want to consider the costs of doing that. My guess is that, based on what is owed on the Discover judgment today, you will find it is worth a shot.
Florida has some fair head of household wage garnishment protections, so stirring that pot may not be the risk you are thinking. But talk about this angle with the attorney too.
I am sending you an email with contact info to an attorney in California that you can talk to about all of this. He does have experience vacating older judgments. Post an update with how that progresses, and lets go from thereabout a settlement strategy if need be.
I have a Discover account with approx. 10,900 balance. The account is probably 16-18 years old, and I have been paying just enough to meet minimum requirements, but I simply can’t even do that any more. The last payment I made was in April, so the first payment I missed was for May. I couldn’t possibly make any kind of lump-sum payment for any settlement amount in the foreseeable future. At this point the only offer they have made was to get back on track with a $565 pmt, then half that for the remainder of a 12-month plan, at 12.9% apr. I can’t pay the 565, or really even close. If I do nothing, the account will hit 30 days late next week. Should I ask about the 60/60 you mentioned (which I probably could handle)? If so, is interest applied to that? Or should I wait to see what else they might eventually offer? I do have an AMEX that I am current with, and working on. I have also paid off a BoA in the last year through payment arrangements, and am working on finishing arrangements with Lowes, as well as Home Depot.
What are the total balances owed as of today across all of your credit cards other than Discover?
Approx. 6,000 total.
Also I think I may have made it confusing earlier, not sure. The arrangements with Lowes and Home Depot are in place, and I have been working on both for about 2 years. Apologies if it wasn’t clear. Thanks!
Can you afford to pay roughly 350 dollars as a fixed amount each month toward all of the credit card debts? If you can afford that, call a credit counseling agency and talk to them about consolidating your Discover Card balance in with a plan that includes the other smaller balance accounts. The smaller balances sound like they are already on some type of hardship plan, so may not be eligible for a DMP, but that stuff is subject to so much change, the best way to find out is to do the session with a counselor over the phone (its free), and get to the exact payment reduction approvals.
If you cannot afford the 350, you are looking at settlement as the next best option, or the 60/60 plan. I have no idea if Discover will offer you the 60/60 plan.
Michael,
In 2010 Discover charged off my debt and turned collection over to attorneys. I talked with the attorney’s office and advised I have had major medical expenses, surgeries, lost my job and have extremely expensive prescription costs. I offered $5,000 (the balance of my savings) to pay off the debt, they asked for more but didn’t specify how much more they wanted. I called a family member who offered to give me an additional $3,000 to pay them. I called back and offered $8,000 and they said they had to have at least $15,000. I told them there was no way I could come up with another $7.000. They took it to court and got a default judgment against me. They then tried to garnish my wages – I have none. As a result of my health problems I am blind in my left eye and other medical problems so I have been unemployed since 2008 and my unemployment stopped in 2009. There is little to no chance that anybody would consider hiring me.
The other day I received a letter from another attorney attempting to collect on the judgment. I am hesitant to start all over with another attorney especially when all I have is a letter from them saying they need me to contact them regarding the account. They have given me 30 days to send them a debt validation letter. I don’t need debt validation, I need some sort of verification that they have been authorized to attempt to collect on the debt.
Ever hear of Discover changing attorneys in mid stream with no notification to me from the attorneys that I have already been working with attempting to get a settlement?
Yes, and it is fairly common for attorneys collecting debt to change over time. When is the last communication you had with the prior attorney?
Do you have other debts out there unpaid other than the Discover judgment?
Hello Michael – First and foremost, thank you for such an insightful, thorough, and accurate web site.
Second, I am reaching out to your for your feedback on how much you think Discover would accept as a settlement offer relating to: Balance $3,665.00
The age of the account was 1 year old when it became delinquent;
I have until July 31st to call and make payment arrangements according to the “attorney placement pending” letter I received June 13.
I read the content of your thread with Jay thoroughly to roughly anticipate what Discover would accept: 50% to 60% ? I have the possibility to offer $2,000 on July 25th. I would like to offer this by writing to them certified mail – Do you think following their suggestion – which is to call them for agreeing on payment arrangements – as mentioned on the letter is ok ? I prefer the written form as I can’t anticipate their string of questions .
Many thanks in advance for your thoughts.
Grateful reader
I am bit skeptical that your account will qualify for any reduction through a settlement with Discover. I am basing this on past instances where Discover has refused to budge, and agree to negotiate any lower pay off, when account age is so new (a couple years new). Having said that, I am aware of a couple of settlements this year that did not follow this long standing general observation.
Regardless of whether Discover maintains a policy of refusing settlements on unseasoned accounts, your cash flow is what it is. If you cannot afford to make your minimum payments monthly, you need to stop the bleeding. If you are in a position to offer Discover a lump sum next month, they will go for it, or they won’t. You can often settle the accounts with the third party debt collector they send the account to down the line (including attorney collectors).
When it comes to writing letters to make settlement offers, I am not a fan. You are asking huge organizations, who use operations procedures that scale to their large size, to do something different than they are set up to do. If your letter generates a response at all, it will most likely not include acceptance of your offer.
When you call Discover to offer a settlement, or to tell them your unable to pay like normal, and are hoping the money your sister lent to you in order to resolve some bills is enough to settle with them, etc., you will be speaking with a trained recovery specialist with Discover. They will have a script to follow. Any questions these major creditors ask are going to be related to affordability of payments, or to trigger their system to agree to settle. If your account is flagged for no offers due to how new it is, no answers are going to be good enough. If your hardship is of a nature that allows for the 40 to 60% settlement getting through, it will.
Does that help?
Yes, Michael – your feedback is very helpful and I am grateful for such a prompt reply to my post – based on your analysis, 2 questions spring up:
the letter states that the account will forward to an “attorney to obtain a judgement against you”. Should I understand from your feedback that I have the option to wait until their attorney receives my account to negotiate a settlement offer with him?
Based on your thoughts, I should be prepared to cough up the entire amount. Very useful information, thank you. Do you think they will expect ALL $3,665 by July 31st before they turn it over to their collection attorney?
You can often negotiate a similar, or somewhat higher settlement, with an attorney or debt collector Discover sends the account to for further collection efforts. I suggest trying to work with Discover first. If there is no option for settlement based on account seasoning, that can (but not always) translate into no settlement, or higher pay off terms, with the collector.
Should you wait to settle with an attorney or debt collector? Only if you have to in my opinion. Can you get the same deal with one? Yes, often enough, but once a lawsuit is filed, settlements do not tend to be all that great.
I do think you should be prepared for the full amount if that is an option. But that late in the collection life cycle, credit damage is done, so settling for any savings is a worthwhile effort.
I do not know your timelines to respond to the July 31st question. What was the date of your first missed payment?
Discover will sometimes delay charge off and placement with outside collectors with a single monthly payment. If you are trying to buy 30 days to keep this from going to an attorney, that could be an option. But you can pay the debt in full with the attorney shortly after the account lands with them too.
Many thanks Michael for your timely answer with additional feedback. Both your replies were prompt and provided me with a relief because I am aware of my options and can make a choice using your feedback. Not only are you a subject matter expert, but your replies cover all bases, possible alternatives, industry trends, current practices and … Your knowledge of the corporate culture of a financial institution (Discover) as opposed to another (Citi) is just as valuable because it can predict a behavior or approach a bank takes (for example, Discover’s stubborness is real; it is a real clue to take into consideration).
With sincere gratitude –
Michael,
You are correct. There have been zero communications from Discover over the last several years. And yes they have current contact information for me. No other agency has ever contacted me on this debt.
Thank you for the reply. I would be happy with 40% as an end result. The only question is whether or not I should poke the bear. Based on my income and recent positive credit activity (new accounts, growing credit limits and usage with existing creditors), I would have thought Discover would have awoken from its sleep by now. Part of me wants to act first because they probably will take action soon and I may want to buy a house in the near future. The other part of me wants to stay quiet and let the SOL pass sometime next year. I guess in the end it is up to me and deciding which road I should travel.
Matty – If it were me, and I am not married to the idea of home ownership at the end of this year, I am waiting. If I were to want/need to be in the home buying market earlier, I would want to tackle the Discover account now, so that any update to the credit reports from Discover (that there is zero balance owed) has several months to season on the report before I start shopping loans for a home.
The SOL passing may only remove lawsuit risk. You could still be required to settle with Discover in order to push a loan through. I am still seeing a lot of that.
Thank you, Michael. That’s a great point about being required to settle the existing balance before closing with a potential mortgage lender.
Lots to think about. Regards.
Well I decided to settle. Discover offered 30% of the balance and I accepted in a heartbeat.
I feel a great sense of relief and am so glad this chapter of my life is over.
Thank you again, Michael.
Nicely done Matty!
Hi Michael. I have an old charged off Discover Card. Balance is $10,000.
It’s been over 5 years since I was first delinquent on this account. Discover has not contacted me. They are still reporting the debt, they have not sold the debt, and they are not collecting on the debt — YET. I fear a lawsuit is in my future. The SOL in my state is 6 years and I may want to buy a house sooner than that.
So I want to settle this debt. But I am concerned contacting them with a settlement offer may be “poking the sleeping bear” and they will not accept a discounted settlement payment and will turn around and try to add 5+ years of interest and fees and sue me for a lot more than $10,000. Ideally I can settle this debt for $5,000 but the fear I just described has me from taking the first step.
Should I call a consumer attorney to help negotiate a deal? Or do you think Discover would be willing to negotiate with me without too much effort? I was thinking of writing a letter with a 50% offer, but your article makes me believe that my situation would be better suited for a phone call to their collections dept.
Thanks in advance for any advice you can provide.
Matty
Matty – I want to be sure I am not reading too much into your comment. Are you saying Discover Card has not tried to collect from you for all this time (4 to 5 years), whether directly, or by working with outside debt collectors? If there have been collection attempts in the last year or so, who by? Does Discover have your correct address and phone number?
I want to understand that a bit better before commenting about poking a bear.
In general, I would target 40% in my negotiations (start lower, as there have been some lower deals done of late, just too few to call it a trend, or make lower targets part of my commentary). I would negotiate only over the phone based on the info you have shared. Leave the written stuff for Discover to send to you outlining the details of your settlement agreement before you make the payment. Read more about that here.
Dear Michael,
I have not been able to make any payments to any of my credit cards since December/13 first time ever in years of having a 750 credit score , with all my payments on time.
My husband passed away October /12…it has been extremely hard for the whole family
I am only working part time..and receiving monetary help from family to pay bills etc…I rent, I don’t have a car and only have 300.00 in my savings account. I owed discover card around 7200.00 . My court date is April 21.. I have other outstanding balances on American Express, Citibank, and Chase. I am very confused on what to do.. I dont want to file Bankruptcy I just got my tax returns and would like to pay my creditors, should I call Discover directly and try to work out a lump sum, payment or should I hired a lawyer to represent me or should I wait for court date and see what happens… also If I pay discover wouldn’t other credit cards want me to pay them as well….
Any help would be greatly appreciated
Thank You.
lauren – You would be looking at 50% of the Discover card balance as a settlement, and that is on a good day, now that you are being sued. And yes, once an unpaid debt shows as settled on your credit report, other creditors (more likely debt collectors) will stand up and pay attention.
Questions:
Are any of the other accounts in your husbands name only? Were you an authorized user on some? Are these all accounts you opened in your name?
Add up the totals of all credit card debts, and other unsecured bills that are hard to manage, and what is that total?
How many children (if any) still at home?
I would not suggest adding the expense of a lawyer to help you negotiate with Discover just yet. Please answer my questions in a comment reply and lets go from there.
Hello Michael,
Thanks so much for your prompt reply.
Sadly all the accounts are on my name , except the Macys card in both of our names which has a 300.00 balance. I live with my 2 adults sons and a daughter who is in college. One of my sons is helping out with expenses. At this time I can only afford to pay the basic , rent, food and utilities expenses. The total balance of all credit cards including interest since 12/13 when I stop payments is around 29,500.00. that been said I had previous offers to settle some of them for a very reasonable amount but at the moment I did not have the money. for example , Chase sent me an offer to settle
9,394 for 2,370. which is pretty good….but then again discover is the one suing me and i think i should settle with them first, btw….they did sent me a letter 11/13 for a repayment option of 4,687 as a lump sum but I could not afford it at the time.
Thanks so much Michael!
Greatly appreciate your help!!
Thanks for the follow up Lauren. I like chapter 7 bankruptcy in this situation. Lets assume you settle all debts, on your own, or with professional help, and you pay 15k total (including fees if you hire someone). Chapter 7 bankruptcy may cost you 10% of that, or 1500.00 -ish. Have you consulted with an experienced bankruptcy attorney? Is there something you learned that suggest you avoid chapter 7 at the cost of 1500 compared to 15k?
Settling your Discover card first as a priority debt makes sense if you go that route. You may have other accounts that can be aggressive with collection too. If you post a list of the debts, balances, and who is currently collecting on them, I can offer some feedback.
Hello Michael, first of all I really want to thank you so much for your help .
I have read some information about chapter seven but I have not talked to a qualify lawyer about it even thought … I do think I qualified for it. I think it is such a long and painful road…not having not even a debit card or any C Card for purchases, seven years is tooo long to wait..chances of buying a property are very slim..
I will give you the last offers I have received from the different credit cards.
1. Discover 7,209.80 Cohen &Slamowitz,llp woodbury ny.
I did received a letter on 11/26/13 with a 35% discount, one payment of 4668.37
do you think I would most likely will be order to pay this amount when i go to court on 4/21.
2.Citibank 7522.84 Northland group Inc.
I just received a letter with a offer to settler for 2256.84 in 3 payments of 753.
first payment due 4/13
3. American Ex 4312.00 Relin Goldstein & Crane, LLP
apparently they have bought this debt from ARSI….
previously I did received a settler offer from Am Ex….for 2,587.00 on 12/13
but like I said before I could not afford it.
4. WAMU/Chase Bank 9394.01 ARS National services,inc
I received an offer to settler for 2367.12…..but it expired on 3/4
5. Macys 295.36 Client Services INc
1/14 got an offer for 207.00
My court date is 4/21 and I am very nervous about it ….never been in court before… and I dont know what to expect.
what do you think?
A Million Tanks!
Hello Michael,
I would really appreciate your follow up comment on the information I sent you on April 4.. detailed information on my debts, balances and who is collecting on them….My court date is the 21 of this month and I want to be prepared knowing what to expect.
Thank you ,
Lauren
Missed it somehow. Just posted my feedback.
Lauren – You can have a debit card now, during, and after filing bankruptcy. Chapter 7 will typically have no impact on your personal or household checking account. You can use that debit card as you like. And you will probably receive credit card offers (with low credit limits and higher interest rates) within the first year of discharge, so 12 months in, not 7 years. I highly recommend you read more about the impacts to credit with bankruptcy compared to other forms of debt relief. You can find access to FHA and other home loan programs two years after filing bankruptcy (even earlier in certain situations).
As for each account you list:
1. If your goal is settling the Discover balance, and you are already in court, 50% would be my low end target for most people in this situation. So I would try to negotiate a slightly lower settlement with Discover.
2. That is a great deal on the Citibank account. If it works with your over all plan, I would look at taking that offer. If you are over the 4/13/14 date, call them up and ask for another letter with fresh dates you know you can follow through with.
3. Targets for settlements with AMEX are 50% at this stage. You can call AMEX and find out where the debt is now, if not with the law firm that last contacted you. AMEX does not sell much debt up to now, so it is likely they can tell you where they have it placed for collection.
4. You may be able to get ARS to reissue that settlement offer if they still have it.
5. Small balance accounts do not settle for that great of savings.
Court dates for debt like these are about like showing up to contest a speeding ticket… very low key. What is your goal with the hearing?
Hello Michael,
Thanks so much for your great advice about Bankruptcy, now I think It may be a possible solution to my financial problems. I will try to contact a lawyer before my court date…also is there any chance that I can postponed
the court date? if Yes how can I do it? so I have time to find a good Bankruptcy lawyer. Michael what would you do if you were in my situation? please let me know..
Thank you so much for your expert advice.
Lauren.
You can ask the bankruptcy attorney about the best way to handle the court date if you are going to proceed with chapter 7 anyway. Follow his/her lead on that. If your bankruptcy is pretty straight forward (no investment properties, just personal stuff etc), the bankruptcy will be a fairly simple process. You can talk to a BK pro at 877-278-8117, or look for one in your area at nacba.org.
If I was ready to hit the rest button on my personal finances, and I could qualify for chapter 7 bankruptcy, that is where I would head. I would want to be sure I was not thinking of cosigning on my daughters student loans, or taking out parent plus loans. I would want to be sure I was able to keep my home, or was ready to let it go back to the bank, if mortgaged. I would be looking at my transportation situation, and weigh whether I let an underwater car go, or reconfirm that loan in the bankruptcy process. A few other things. All of which I would cover with my attorney.
Dear Michael,
I have been battling breast cancer since June and have not worked since November. We still have my husbands income but with mounting medical bills we can not afford to pay Discover. We are not behind on payments yet and called to see if they would take a debt settlement with a one lump sum payment. They said they could take off $1084 our $9800 balance which does not help. Is it hard to negotiate when you are not behind on payments?
Stacee – It is near impossible to negotiate a meaningful settlement with Discover Card (or any other bank for that matter), when you are still current.
I have settled several CC accts last year but have one remaining with Discover for $11,700 that has been placed with a law firm for collection after being charged off. The last payment I made was in Nov. 2013. I have been negotiating with the law firm for 3 weeks since they have threatened to bring action for a judgment. They have offered a $7,700 settlement after I offered $4,500. I may be able to get it to $6,500.
My question is how much time do you think I have before they actually sue for a judgment. And should I agree to the $6,000 or $7,000 now if I have the funds? They keep saying that Discover has authorized them to bring suit.
Thanks
Lou – My impression, given what you shared, is you may have a couple weeks before suit is filed. Your 40%-ish offer being countered for a bit higher than 60% is not uncommon. There are instances where you can still counter and get them under 50%, but after 3 weeks, I would suspect that yours is a Discover Card that may not settle for under 60%.
What were the percentages you paid for settling your other accounts?
Michael, I have a Discover Bank credit card judgment that’s over six years old. The original amount is approx. $10k, the current balance with accrued interest is $15k. Through my lawyer to their lawyer, I recently attempted a deeply discounted settlement. They countered with a $9k lump sum. I can’t do that and hoped to have done much better, say between $3k and $5k with terms. So we’re at an impasse and I’m surprised (pleasantly) they haven’t tried to enforce the judgment. Should I just wait it out or is there some other negotiating strategy you recommend? Thanks.
Scott – I do not like waiting out judgments. That can mean looking over your shoulder and fretting about bank levies and wage garnishments (where applicable) for 20 years, or even more.
The settlement offer of 3 to 5k on the current balance being declined is not surprising. 60% of the current balance is a more realistic target. But if you can show some sincere and on going hardships you may be able to get lower.
Michael, I’m not sure how unique my situation is. I was injured in 2010, laid off in 2012(June), divorced in 2013(April). Made periodic payments as I could through spring of 2013, working with Discovers collection department over the phone mostly when our relationship went sour. My resources are finite, and were coming to a halt. Phone conversation led me to believe that Discover would stop trying to cash “virtual checks (argh, that ended up a pain).” They did not, forcing my bank account into penalty. Through heated discussions, I gave up on Discover, and disputed at bank level, who at least got me back to 0 (zero). I have no income, no possibility of income, credit score I’ll never care about again, fighting government for disability, no means for insurance and on food stamps. No personal assets, zero, sans the retirement account I can’t touch without penalty (age 38). No car, house or stock and residing with family. Haven’t talked to Discover since May/June 2013, and received their attorney letter last month stating I owe ~$7000. They are nowhere near the only debt I owe, many absorbed in divorce, and double that in medical expenses. “Insert blood-turnip reference here.” Bankruptcy is a forgone conclusion (in my mind) for any debt that pushes my window of obtaining some sort of gov’t assistance. What next step would you suggest? There is nothing to give, even if a good faith payment plan were reached. Do I wait them out, as with the rest of my debt, almost all of which is sold off to agencies at this point? Declare bankruptcy now? There is no net for me.
Scott – Bankruptcy does sound like the right path to take from here. I would possibly wait to do that if your health situation has not stabilized, or there are other concerns you have. But if all of your personal financial dust has settled after the prior explosion, getting things like Discover Cards collection attorney out of the way now, makes sense.
Try reaching out to a low income legal aid office near you. Bankruptcy assistance is often available if you qualify. You may be able to get through it with just the court filing fees, which can be a few hundred.
Hi:
I have Discover Bank served me 2 weeks ago for $17K. I am working with their law firm and only can go $9000 or 65% max, Do you think they just playing hard ball with me? I settled American Express 16K balance for $6K (about 40%), however i settled with Amex when they already had a default judgement after fought in the court. Should follow this route to get better settlement? I have 2 more week to answer. What is your opinion? Thanks
Joe – Best case would probably be 40% settlement with Discover, but that will often require some kind of documentation about your being on a fixed, or otherwise limited income (at least with many of the attorneys they work with). If you are unable to document your inability to pay, be prepared to pay what is on the table now, or maybe settling for 60%.
It is certainly possible that a Discover judgment can be negotiated for less, but the odds do not favor that, and this law firm may just want to try their luck at bank levies and wage garnishments after a judgment, and prior to negotiating a discount after a judgment is entered.
Right now I would be thinking about risk/reward for a later unknown, set beside a whether I can come up with the extra cash now. And if the cash just cannot be had, perhaps talk this all over with a consumer law attorney (who has experience defending collection lawsuits), about buying time to save up more.
I have two Discover cards, owing about $19,700 between the two of them and stopped making payments around 18 months ago. The law/collections firm owning the debt recently sent me an offer letter to settle 40% of the balance, which would reduce the debt to about $7,880. I have until April 30th to send in this payment.
I really like the idea of settling at 40%, but I’m not sure if I can come up with that amount of money before their deadline. Is it possible to make payments on a settlement amount? Or is it always one lump payment that they will only accept?
Thank you for all the helpful information on this website. It gives peace of mind when going through hard times!
rashonda – I have seen settlements direct with Discover that allow as many as 12 payments. What can happen though, is along with the extra time you get to make the payments on a settlement, you also could see an increase in the amount they want. So, rather than accepting 40% of the balance owed as of now, you could possibly have to agree to pay 50 or 60% over that payment time frame you set up. The account being with a debt collector means getting things done through them, not Discover, and that can impact what is possible.
It is far better to get stuff like this knocked out in one payment whenever possible, but I understand that is just not in reach sometimes. How close are you to being able to accept the settlement offer?
Hi, I recently decided to go with a lawyer and a settlement with Midland Funding LLC. Last payment 2/2008. My lawyer said they have proof of me making a payment in Sept. 2010; I was not sure and don’t have funds to fight in court, so I asked him to see if they would settle out of court for $5000.00 original loan 12.000.00. Pre hearing set this past Friday and my lawyer said I did not need to attend, court date Feb. 4th. Long story short I have not seen their agreement for settlement and lawyer says he has not recieived it. I checked my Credit through TransUnion last night and Midland on January 7. 2014 added $5000.00 to my original debit and said the last payment was Sept. 2010. Can this be legal, I have not seen any negotiating settlement papers. My lawyer is of course “out of town”. I feel he is not representing me like he should, what can I do?
shirley – When is your attorney scheduled to be back in the office?
Hi, Sorry just read your post, I spoke with him yesterday and he said he would contact Midland and find out why they did this and ask them to remove it. I also asked him if he had much experience with Consumer Law and he admitted “very little” Court date is next week and I’ve already paid him over $3,000.00. He said I might want to find another lawyer or just settle. Not sure if court will give me an extension to start all over again. I formatted Discovery and my lawyer changed some of it” body, Midland responded with affidavit on “Bill of Sale”. I will go to his office today and look at their Discovery. Any advice you can give me is appreciated.
shirley – At this point I would suggest you speak with an experienced debt defense attorney, but experienced attorneys are not easy to find. I can help you locate one if you post the name of a large city near you.
I do not understand something you shared. You could not afford to fight in court, wanted to settle for 5k (which is sometimes possible on a 12k lawsuit if you can show hardship), and have paid an attorney 3k so far. And you are the one formatting discovery? What gives?
Hi, Michael,
I started as Pro Se and found I was running out of time, so I hired a lawyer whom mislead me to how much knowledge he has in Consumer Law. I had already formated Discovery so I handed this over to him. Michael my question is , why have they changed the date of last payment and the amount of original amount due on my credit report? I have not received settlement offer in writing, however my lawyer says they are requiring payment March 1st. I also have a question about the date of last payment they say I made, which I never remember making, I found my bank statements and they show no payment to Midland. I did find a reference to AT&T Telco from India and so I google and found Pepper vs Midland Class Action Suit . I remember a girl calling me to make payments on my “Home Depot” card for half the amount due and I agreed to trial for 6mths. This was” MCM”, but I was never told it was a collection agency, She said it was Citibank for “Home Depot, I cancelled automatic debit with my bank because my bank account was debited twice in one month, and I was worried it was a SCAM. The same girl from India called back trying to get me to pay again and I told her this is a SCAM and never to call my home again, I never heard anything else . The AT&T Telco reference does not show dollar amount that I paid for the 6mth period. Do you have any information on this?
shirley – Only Midland can tell you what is up with the change to the credit reporting. My opinion is that the change to credit reporting is, in all likelihood, a data entry error. The epitome of one box being checked rather than another.
As far as the 2010 payments – are you being sued on the Home Depot account?
Hi! I just spoke with a civil officer who told me that Discover Ban subpoenaed for owed debt. I have not received the official document. What is my best course of action. I know I owe them the money, I am not sure exactly how much somewhere around 8000 ish. Should I call them and try to settle. I can put down about 1000 and make payments over 24 months. I am trying to avoid court and garnishment. I really cannot afford money or time for a lawyer. But is it best to try and settle or should I go the attorney route before speaking with discover. My husband and I got into.financial trouble and are just now recovering. I am just really scared and want to do the right thing.
eswalf – You can certainly call the attorney for Discover and work out some form of payment. Putting one thousand out there as the first payment will be taken seriously. If you can manage the rest of the payments over 24 months, they may go for it. Do you have any way to pool together resources to settle this in one lump sum? You may be able to work with an attorney to help you draw this out for several months in order to buy time to come up with enough to settle with Discover in one lump sum.
Once sued, and agreeing to long term payments, you typically sign off on a stipulation/consent to judgment. Not the end of the world, but something to avoid if you can.
Do you have other debts out there that remain unpaid? If so, what is the total of all of those debts?
I originally owed Discover @$3000 plus, but with their arbitrary late penalties and interest rates plus now with court costs, et al, I owe over $5000. I paid the collection company $1300 a few months ago, but just rec’d letter stating my wages are going to be garnished. I barely get by with what I make now and the garnishment very well may do me in…
Am I past the point of no return or is there something I can do to ward off garnishment? I’m feeling very defeated and truly a little frightened. I am a 62 yr old female and have been at my place (not position) of employment for @17 yrs. I rent my home, drive a ’94 chevy, and my take home pay is approximately $1400/month.
Thank you for any help or advise…or maybe even hope…you can provide. You must be a very compassionate, understanding person to do this…
Dana – The garnishment notice you received may have come with instructions for how to request a hearing to show your earnings are low enough to qualify for either full or partial exemption from any wage garnishment. If those instructions are not evident, contact the court clerk and ask how you can proceed with that.
If you are able to qualify for full exemption from garnishment, you are not out of the woods yet. Your bank account can be levied. But you can take steps to greatly reduce any hardship that would create by banking and paying bills a little differently.
If you can qualify as exempt, the Discover debt will not go away. Judgments often grow with interest. I would encourage you to put a plan together to make payments on your own terms, or pool together the resources to settle with Discover (through the attorney they placed your debt with). You can often settle judgment debt for a savings, but that is not all that likely if they are getting paid through garnishment. Here is more information about dealing with judgment debt.
Let me know how the garnishment part turns out. I can offer feedback from there.
Great info. My problem with Discover is I have a $9500 balance with 29% APR. Even with paying min payments (account is current) I am over my limit with little chance of really paying it down. Their offer is 0% APR on new purchases, meaning I would have to pay lump sums to free up my available credit, then be able to take advantage of their 0% APR “offer” (not sure what terms and length of offer are but I’m sure it reverts to the standard rates after a certain period of time). My question….how should I approach a settlement with them? 50-60% of balance seems fair given I have paid huge interest only amounts over the past 5 yrs with them (of course…assuming I can get the means to have a one time bulk payment). Thanks
John – You cannot settle your Discover Credit card while current with payments. If you cannot afford the payment right now, than falling behind is a foregone conclusion. Based on trends today, Discover would likely offer a better payment reduction as noted in the original article, or settle after you are several months late (likely 5).
Do you have other credit cards with high interest rates? Is Discover the only account that is unmanageable?
Thanks Michael. One question I asked in my previous post that the law firm is requesting that I have to make the first payment immediately and setup the remaining payments by providing a bank routing number and then I will receive the “agreement in judgment” document 3 wks later because it takes time to prepare. Does that make sense, don’t I have first to review the “agreement in judgment” before I make any payment to make sure I understand the terms. Is this a typical process?
Sal – It depends on the debt collector as to whether the behavior of demanding payment right away – without providing the agreement in writing – is typical. There are some fairly decent collection attorneys out there. There are also ones like you describe collecting on your Discover Card.
The collector for Discover, unless really new, already has a consent/stipulation/agreement to judgment template in their system. The process of inputting your particular details would be clerical and simple. Instead of it taking 3 weeks, I suspect it could take as little as 15 minutes.
My concern is that you make a payment and think all is well. Your time to file an answer to the complaint they filed in court goes by, they then file for default judgment. You never get the agreement in 3 weeks, but your next payment goes through. You have already given them your bank account info, and in short order you get a bank levy enforcing a judgment they got, or a wage garnishment is set in motion, and the agreement is proven to have been insincere from the beginning.
Of course what I outline above may not be the collection attorneys intent at all. The office may be run in a manner where simple clerical work is scheduled out 3 weeks…. I have seen the type of concern I am sharing with you play out. I would encourage you to speak with the experienced consumer law and collection defense attorney I sent you contact info for. Be very clear when sharing your situation and the concerns you have about the payment agreement.
Based on what you have shared, I would not trust what the collector will/will not do. Once you get all of your ducks in a row, it would be great if you come back and post an update comment. It would be good to share the name of the collection attorney/law firm Discover sent your debt to at that time. You could help others who find themselves dealing with the same place, and they will be able to weigh your experience when considering their own options.
A week ago I received a court summon from a law office fro an outstanding credit card balance of $8000 for Discover card.
I contacted the law office trying to settle and they asked for for a lump sum of 80% of the outstanding balance which I cannot afford and when I asked about the monthly payments plan. They told me they can accept 24 month payments but I need to sign “agreement in Judgment” and I have to make the first payment immediately and setup the remaining payments by providing a bank routing number and I will not receive the “agreement in judgment” document for 3 wks later because it takes time to prepare. I am trying to avoid a court judgment and I can afford the 24 month plan but I want to make sure that the “agreement in Judgment” is NOT considered a judgment against me if I pay all the agreed payments. Can you explain to me what are the terms of the “agreement in judgment. Is it similar to going to court and receive a judgment which will be reflected on my credit report “public record”. I would appreciate any info you can provide.
sal – If your only option for resolving the debt with Discover is through monthly payments, and now that you have been sued, a consent/stipulation to judgment outlining what you are agreeing to with payments is pretty standard. They are basically agreeing to monthly payments in a formal way, where if you miss one, the judgment becomes enforceable through the court. This can often lead to garnishment, bank levy, and liens on real property.
I understand your concern about the judgment being filed in the court, even though you would make payments on time. The concern about this showing up on your credit report is very real. I have seen instances where a stipulation is agreed to, payments met, and the docs get filed with the court anyway.
If you are hyper concerned about this, it would be well worth the effort, and likely reasonable cost, of speaking with an experienced debt collection defense attorney. You can run the docs you get from the collection attorney suing you, and all of your concerns, by the attorney. If you need help locating one with the type of experience you need, send me an email with the name of a nearby larger city.
Also, for later readers, setting up manageable monthly payments directly with Discover when you are late with payments, but not yet sued, is not difficult at all. You can stretch the payments out 60 months as opposed to the payments being condensed into 24, like with Sal.
I also discovered A LOT of different ideas on debt settlement when I started looking around the web. Their are probably some folks out there that have used some of the more risky tactics with success. When I finally took my head out of the sand and realized just how far in debt I was, I just wanted to settle at a reasonable cost, as quickly as possible.
Following what Michael and other “for pay” debt settlement service providers say has worked for me. And the fees were well worth it. The forums are a great tool, but talking with someone who has very current knowledge of what the different credit card companies are doing is far better.
My Discover card was settled about 2 weeks before Charge Off in March, 2013. They accepted 36% of the original debt of $9000 (31% of the final balance with all the late fees). I spoke to them at least once a month from the start. They really pushed their “60-60 Program” – paying back 60% of the balance over 60 months, at 0.99%. And it was in their “Attorney Placement Pending” department for the last couple of months.
At the end I got past the lower levels and spoke with some of the managers (at least I think so). My situation had gotten more desperate and I conveyed that to them. I had the card for over 5 years and did not use it for a few months before I quit paying (and no big charges in a year or more).
Charles – Thanks for posting your experience with Discover a few months ago. Editorial and feedback coming from me, while instructive and experience based, is not the same thing as real people getting real results and sharing them.
Michael, thank you very much for your help and writing this article. My Discover account is not yet charged off, it is just placed with an attorney and I think they did it after receiving my canned debt validation letter. I read a lot online and most sources say never to talk to the creditor on the phone as it can be used again you in the court. So i never talked to them on the phone; i now see that was a mistake. I wish I had found CRN earlier, would have been so much easier to resolve all this. I will give attorney a call. Will they work on the percentage of money they save me on settlement or will they require upfront fees? If they do require fee, any ideas how much they can be? Also, Oak View Law group offers 25% fees on the amount of settlement saved. If the other attorney fees are more do you think ovlg.com will be a good choice to approach? Thanks again for all your help. You are a great resource on the internet!
Thanks for responding to this piece Jay. I am now fairly certain that your Discover account was accelerated for aggressive collection as a direct result of the canned letter. Settling directly with your creditors is often the best opportunity to resolve the account. And it absolutely will involve speaking with them. Anyone publishing something to the contrary either does not know that, or does not care that what they put up on the web can do more harm than good in these instances.
OVLG has some fair fees. There are a couple of others with even more affordable fees, like 15% of savings. But you may not need to add the cost of anyone’s assistance. You can call the CIR Law Offices yourself first, and discuss the options for resolving the debt. You have not been sued yet, so perhaps you can settle on the lower end of the norm for this situation. You would call and let them know you talked to your dad about the situation and he can help you out, but only has so much to offer. See if you can knock this down for something around 60%. If you can reach an agreement that you can fund be sure to get the deal in writing before making the payment.
If you hit a brick wall with your efforts, post an update here and lets go from there.
Thanks Michael, Including the post from CIC, they guy over there has been helpful but has contradictory views from you. I will call CIR Law once more and see what happens. Here is the post from CIC for your information and feedback:
Your on the hook for 5200.00 anyway in court or in arbitration.
Arbitration is expensive they wont want to pay for it.
Your want to make it expensive for them to pursue you.
They will spend 7000.00 or more to win 5200.00 Not a good business decision.
Have you read the strategy and steps of arbitration?
[link inlcuded but when I reply with the link, the comment does not show, so removing the link]
You need to study on how to win in arbitration, You will need to make a motion for the court-the examples of the motion are in the above link I keep referring you to.
Or do nothing and get a judgment against you for around 7500.00 after the debt buyer adds in their fees.
Thanks for pasting that Jay. You are not dealing with a debt buyer. Discover may not care about the expense. I know that may not sound right. From a pure economic sense, it wouldn’t. But there are other things that can come into play with how Discover decides to manage an account like this. This is the stubborn part I refer to in the above article. Due to the fact that they made an early out referral to legal collections, they are looking at your account differently already. I cannot definitively say yours is an account Discover will take to the mat, but it would fit a description for that so far. How long ago did you last make a payment?
Was it something you read on that same site that you followed and sent the canned letter offering to settle with Discover at 25%? Just curious.
I made the last payment on Feb 21, 2013. Missed first payment that was due on 4/08/2013.
It was from other websites and youtube videos, they even have sample DV letters. There are few people on CIC that say not to talk to the OC either but the forum owner later corrected them and mentioned it is best to talk to the OC and thats when i started making the calls. I was already 2 months overdue and when i made the call, Discover said, we already sent your account to the attorney 2 days ago. I am in the process of settling with Citi and Bofa by making calls and answering their calls.
Okay. This further confirms your account is being treated the way it is due to the letters sent to Discover – because of how quickly it was placed. If you want your offer to be taken seriously you will need to be prepared with 60%. Maybe more. Be sure you can get your dad to loan you what you will likely need first before calling.
Michael, I called the attorney (Jeremy) you recommended. Very pleasant conversation. Boosted my confidence a lot. He said not to elect for arbitration, it causes problems. He told me to send them a debt validation letter as well like i sent to Discover and ask for verification. Most likely CIR will sue, but sometimes they go away. It makes them do a lot more work. If they do sue me, Jeremy said, he can represent me in court for fee of 10% of the debt amount. He said he deals with these cases a lot and has gotten the debt to go away completely in many cases when sued.
Thanks for posting Jay. You will likely have the opportunity to settle along the way as well.You are in good hands.
Michael,
CIR firm called last wednesday and asked about settlement. I said i can do $1800. The representative asked if i can do more, i said not at this moment. He said he will talk to the lawyers about my offer and call me back. I have til end of week to send the debt validation letter before 30 days is over.
I am going to send the debt validation letter today via Certified Mail RRR. Should I word it like ” you are here notified under FDCPA that this debt is DISPUTED and here by request validation regardimg this alleged account” or should I say “I hereby request validation and verification regarding this account”. Basically should i say this debt is disputed or not? and shoulld i included the word alleged?
Jay – There really is not a combination of words that will be more effective than another if you are disputing or requesting validation. I am not certain what you would be disputing, but basically; the word “dispute”, or “request validation” will trigger the protocols they will follow on their end. The end result in your case will likely be the same. They can get the info from Discover to meet their obligation to answer your letter.
Like mentioned prior, settling can be accomplished at around 50 to 60% at this stage (though not in all instances). If you were motivated to put this one behind you, pooling about 600 more on top of what you offered is a possibility. Using the letter will prolong the issue, and could lead to a scenario where resolution will be at a higher cost.
Michael, your comment does not show here but i will write the reply to it. The reason I am not offering more is because they are not coming down at all. They want 100%. I went from 1300 to 1800. If they say can you do 4000 or 3500, i can offer 2600. I do want to settle this and put it behind me, just need a good strategy to do so. The lawyer you recommended told me to send the debt validation letter, i did it yesterday. I hope this makes them do work and they become more flexible to making an offer. Just need some tools to make my position stronger, don’t know if debt validation letter would do it or make it worse. What else do you suggest? How about next time I talk to them, I mention that I am talking to a consumer protection attorney and also considering bankruptcy?
Michael, an update to the posted i just posted few hours ago. I just got a call from CIR Law and the representative said there is no settlement on this account based on the type of account it is. I asked what type of accout is it, he said internally it is called 5591 which means no settlements accepted. He said i can set you up on a payment plan. So, basically i think my account is flagged as No Settlements Accepted. I have sent them a debt validation letter which they will get in couple of day. Any thoughts?
Jay – Comment system bug from yesterday is fixed. I sent you an email and encouraged you to call me direct. I would like to speak with you in a bit more detail about where things are at, and some ways to navigate from here.
I believe the initial letter you sent to Discover led to the way your file is tagged, but there are other reasons that can happen. I can learn more from you when we speak.
Michael, Thanks for helping me on the phone. So, CIR called me again and asked for payment, i said i do not have any money for payments but can borrow money to settle. He again said he can’t settle. I asked, why is my account marked in a way that won’t allow settlement. He transfered me to his manager, i explained the situation to the manager and asked the same question. The manager said the account is not yet charged off so CIR does not have any authority to settle, only Discover does. I said, can you talk to Discover and let me know about my offer to settle? He said he can definitely approach discover but it will be better to make the offer 50% at $2600. I said ok. He contacted Discover and a day later told me that Discover accept my settlement amount.
Thanks again for all your help with this account. I am glad I was able to settle it.
Great work Jay and congratulations – you accomplished your goal!