Short answer
If your goal is to resolve the debt, and you have the means, settle it. Sending canned dispute or validation letters, or electing arbitration, is a good way to lose a settlement you could have had at 40 to 50 percent before the account charged off.
Key points on this page
- Current trends for settling a Discover credit card directly with the bank run between 40 and 60 percent. Lower settlements happen, but they are not common.
- The best savings usually come in the last few weeks before Discover charges the account off at about 6 months late, and they come from speaking with a Discover collections or recovery representative. Some accounts are flagged for no settlement based on usage before default, a short account history, or a collectability assessment.
- Sending a canned settlement offer letter can get your file handled under a different internal policy, and can cost you the chance to settle before charge off.
- Discover does not sell much of its defaulted debt these days, so it likely still owns the account, and its law firm will have no trouble meeting a validation request. A dispute buys little time here.
- The arbitration play has lost most of its force. Card holder agreements were adjusted, arbitrators see it as a ploy, and Discover will dig in and spend more than the debt is worth. It can run more than a year, you can lose, and you can end up owing more than you started with.
- If the account is heading to the courts, speak with a consumer law attorney who defends collection lawsuits before you decide your next move.
This post was inspired by my comment exchange with a site reader about negotiating a settlement with a Discover credit card that is now in the hands of a collections law firm. My comment would have been too lengthy a reply on the page the discussion originated, and this is also something that is not all that topical to the Debt Relief Program Intro page. What follows is food for thought; not just with Discover Card, but with creditors like Citibank, American Express, Capital One, etc.
For context, you should read the comment string with Jay about settling with Discover.
From the other page Jay said: “I have a Discover card owe $5200 on it. I was communicating with Discover via mail, and offered to settle for 25%. I called Discover and they said my account has been sent to an attorney.”
Resolving Discover Credit Card Debt After Months of Not Paying
If you want to settle a Discover debt, and have a plan and the means to do so, sending them form letters offering a deal is not the best way to go about it. Yes, there are websites full of anonymous posters who promote sending letters for this, that, and the other thing. There are merits to, and strategic goals, that can be accomplished with these letters. Using them effectively is situational though. But the promoters of their use rarely dig deep enough to learn about someone’s goals and financial situation to compare alternatives. And readers of these sites often fail to volunteer the particulars of their goals and finances in order to receive more useful feedback. In fact, most people reading this, and other debt and credit related websites, do not post at all. That is not Jay. He IS on other websites, and here, looking for more feedback. That’s great. But before he got to the place where he started looking for more feedback, I assume he read somewhere that sending in a 25% settlement offer with some canned wording to Discover Card, in order to settle with them, was a good idea. It is not. It is a good way to blow the opportunity to settle with Discover for 40% to 50% before they charge off the account and place it into their collection pipeline.
Current trends for successfully settling a Discover credit card directly with the bank are between 40% and 60%, with some one-off events that can settle lower, but it is not all that common. There are also accounts that can be flagged for no negotiation and settlement that would result in a lower pay off with Discover. Historically, my experience suggests Discovers criteria for refusing to settle, prior to outside debt collection efforts, are based on account usage prior to defaulting on your payments, length of account history (account less than a year or three old), or when a “collectability” assessment suggests the account not be settled. Settling your Discover card before it gets charged off (6 months late), is most often going to be accomplished by speaking with a collections/recovery representative employed by Discover. The best deals and savings from settling with Discover will typically be in the last few weeks leading up to them charging the debt off as noncollectable on their books.
I cannot know whether Jay’s account would have been one that got settled prior to charge off and placement with an attorney for further collection. But I do know that his goal has been to settle, because he sent a letter to Discover offering to, and has said that remains his goal in the above linked comment string. Had he been able to settle early, he could have potentially avoided the charge off entry on his credit, and would have avoided being in the position he is in now. But I suspect Jay read somethings online that, while probably intended to be helpful and useful, may have helped to over complicate an otherwise straight forward opportunity to resolve his Discover credit card bill.
Based on my experience, I would say there is at least some likelihood that the letter Jay sent to Discover Card offering to settle, led to his account being treated differently than others that get placed in the collection pipeline after charge off, or placed even earlier than 180 days of nonpayment. I say differently, but that is a misnomer. Discover, and other large credit card lenders, do have policies and protocols in place that, to them at least, would be the normal treatment applied to a small percentage of accounts where they receive canned letters (perhaps like the one Jay sent), from their card members. Creditors will also develop different attitudes for how they handle, or dig their heels in, when settling, or not settling, with accounts that go in the direction Jay read about, where arbitration is elected, and is primarily why I am writing this post.
In a comment Jay said: “Some people have ask me to opt in for Arbitration with JAMS but i do not know much about Arbitration. I really need advice with this soon. All I have to do is send them a CMRRR saying that I dispute this debt, request validation and elect arbitration with JAMS to resolve this matter between us.”
Disputing Your Discover Card Debt and Electing for Arbitration
There is a long sorted history with using arbitration to collect unpaid credit card debts. I cannot possibly cover it in this post, even if I wanted to (I don’t), but I am very familiar with the history, and the strategic purpose of someone in Jay’s situation electing for it now. And though I may come off as not supportive of the different ways you can succeed with “alternative methods” for resolving debt, I am actually all for using different strategies to best resolve a debt when someone is well informed of the risk/reward of the alternatives, like disputing a valid debt, or serving notice to a debt collector that you will elect for arbitration of any dispute. But that does not appear to be a good alternative for Jay when considering what he shared in the other comment thread. Nor is it going to be an effective or realistic option for many who try it. Here is why:
Jay’s goal is to resolve the Discover Card debt.
Jay has access to the resources to help him do that.
Electing for arbitration, or other alternative methods to dodge a legitimate debt, may in fact lead to a HUGE time commitment in order to succeed. What is your time worth? If you have to spend what could be countless hours researching and applying what you learn if the CIR Law Office receives his letter and does not do as that website Jay has been reading suggests (CIC) – where the debt collectors “run for the hills” (man I hope there is more to what he read over there than that) – are you prepared to follow through? What if the process takes more than a year (it could), and you lose anyway (you could), and end up owing far more than originally owed to Discover (could happen)?
In the first comment Jay left on the other thread he said he owes a debt to Discover for 5200, but is being encouraged to dispute it. I do not know the context of what Jay read, or any comment exchange he had on another site, so I do not know if there was an outline given for the strategic purpose of disputing a debt Jay already knows is legitimate. But it does not matter. The general strategic purpose for disputing a legitimate debt is to buy time for some other reason, or with the expectation that the debt will be treated as a “hot potato”.
Debt collection and playing hot potato: The incorrect assumption that all debt collection is a numbers game that relies on collecting the most, from those most likely to pay, for as little overhead cost as possible. If someone identifies themselves as less likely to pay by sending a dispute or debt validation request, the collector moves on to another file, sends the account back to the originator, sells it off, or assigns the debt to another collector. You then send a dispute, debt validation request, or cease communication letter to the next debt collector you hear from. Wash – rinse – repeat.
Sending a dispute and request for debt validation to the CIR Law Office in Jay’s case will not buy much time. Why? Discover does not sell much of their defaulted credit card debt into the open market these days, so I am confident they still own the debt. CIR will have no trouble meeting their obligation under the FDCPA to provide Jay with validation. I suspect the validation request, dispute, and serving notice that arbitration will be elected in order to resolve any dispute, will only lead to further complexities for Jay, and others who are faced with similar circumstances.
There is an Ebb and Flow to Debt Collection
Creditors deal with things the way they want to; assignment and contingency collection agencies do things a certain way (often as dictated by creditors placing debt with them); debt buyers manage their operations and collection files in the way that makes sense for them. They can all make changes to their practices and recovery goals due to changes in the economy, internal data, legislative changes at the state and federal level, lawsuits they may have defended and lost, or succeeded in, new case law, decisions from higher courts, etc. Consumers electing for arbitration was an effective way to cause creditors and debt collectors to treat the file as a hot potato after the National Arbitration Forum was shut down several years ago. The effectiveness of the strategy was/is real, but is ebbing towards non effective as card holder agreements have been adjusted to eliminate clauses, arbitrators see this as a ploy, and creditors, like Discover, dig in and become stubborn. Stubborn can mean Discover, and other banks, are willing to spend the money taking some of the cases all the way through – even though the costs can far exceed what they can collect (especially given the fact that if they win the consumer can elect for bankruptcy).
Playing hot potato with a debt collector can deliver the desired effect. But it is counterproductive for someone who:
- Wants to, and has the means to, resolve a debt.
- Wants to refinance or purchase a home without waiting until the Discover credit card ages off the credit report (7 to 7.5 years). And is not okay with the higher potential to be denied other credit products like future auto loans, and credit cards, and is not okay with paying a higher price for those credit products in the future (maybe even insurance products).
Should someone in Jay’s situation try the hot potato approach with his Discover credit card? No. Not in my opinion. Not when his goal is to resolve it, avoid being sued, and move on with his life.
Are there instances where someone should do as Jay is considering? Yes, but those would be very limited instances. And would be limited even further if the average person really had a grasp of how much time and energy they would need to commit to the process doing it themselves, and who were also fully informed on how to compare other options that would help them accomplish their mid to long term personal financial goals before proceeding.
My comment to Jay on that other page is to speak with an experienced consumer law attorney (with a practice focused in defending debt collection lawsuits), before making up his mind on what to do next. The attorney may recommend Jay take a defensive position now that his Discover account is likely headed to the courts if it cannot be resolved in the near future. The attorney likely has dealt with CIL in the past, and will be the best positioned to give Jay solid advice about what he is considering.
An Invitation
I invite anyone concerned with the topic I covered in this post, or whose goal is to settle or make payment arrangements on their Discover Card, to participate in the comments below. Just know that the bias of this site (and of yours truly), is to mostly publish content and provide perspective about resolving debt, and not playing hot potato with collection accounts.
If you would like to consult with me about your Discover debt you can reach me at 800-939-8357, choose option 2.
If you are dealing with an attorney collecting for Discover, and want affordable legal help to handle the court process while working toward settlement, fill out a profile on this site and get help. It’s as easy as clicking the “get started” tab under the consult request image below.
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.