This post is part of our “Charge Off” series and discusses what typically happens with your unpaid accounts after they are charged off and when the loan or credit card balance is assigned to an outside debt collector.
In order to have reached charge off, you will have survived the many collection attempts from your original creditor that typically last six months. Here is where your account goes from the frying pan to the fire. This is where your stress level regarding unpaid bills will increase. I know, as if additional stress was even possible….
Unpaid Accounts are Charged Off as an Accounting Function
Creditors have three options available to them once they charge off an unpaid debt. The most popular of the three, at least with newly charged off accounts, is to place the debt with a collection agency.
Debts placed with an outside collection agency are generally done on a contingency basis and with short time frames built into the assignment contract. This means the debt collector gets paid if and when they get you to pay as a result of their collection attempts. If they cannot collect from you they will lose the account.
The amount of time your account remains with a contingency debt collection agency will vary, but my experience is that they will have your account for a few months at a time.
The typical debt collector working for your creditor as an assignee has two primary tools available in their effort to get you to pay; your phone; and your mailbox. There are other methods of collection, such as calls to your work place, friends, family members, neighbors, but I want to keep the focus of this post to the most general efforts used by the debt collector who has been assigned your account just after charge off. This brief video will help to illustrate your options and how to time your negotiating efforts with debt collectors.
Debt Collectors Calling after an Account Has Charged Off
First, similar to when you first fell behind in payments to your original creditor, the phone rings with debt collector calls, a lot…. Next, the phone rings some more, and then… some more.
WARNING: Do not use your phone for target practice! You may need it later.
If you want to resolve an account that has been placed with an outside collection company, you will have opportunities to do so. Here are some important details to consider in your effort:
- You will have to pick up the 2 ton telephone receiver and call the debt collector in order to identify your available options with the account. I would not limit yourself to written communications.
- You will be speaking to someone who has been trained to push your buttons using the most effective and proven methods for collecting debts.
- The collection agency can only work out arrangements for payments that are consistent with the guidance they have been given by their boss – the bank that issued you the credit card.
- You will not be able to re-age the account after the credit card is charged off.
- Avoid some of the nut job advice on the internet about handling this stage of collection
- In some ways you have more payment options with charged off credit card bills than you would with the original creditor
- The debt collector only gets paid if they can get money from you
When a Charge Off Gets Reported to Your Credit Report
You should know that a charge off event is going to be reported to the credit reporting agencies and will appear on your credit report for about 7.5 years from when you missed your first monthly credit card payment .
The reason to point this out is that once the credit card is charged off, the damage to your credit is now done. You do not get to re-age charge off accounts. The credit damage from not paying a charged off account can now get worse by being sued, followed by a judgment entered against you. A judgment can later show up in the public record section of your credit profile. Also, a collection trade line may later appear on your reports, and this would be considered additional damage (this aspect will be covered in additional posts to the Charge Off series).
Any threat or comment from a debt collector about how you should be concerned with your credit report and score after the account they are collecting on is charged off is just a collection tactic. Collection agencies will have no ability to change how your original creditor reports the debt to Equifax, TransUnion or Experian. If you feel a debt collector has used your credit scores and reports in an unfair or deceptive way during a collection attempt, post about that in the comments below and I may be able to offer feedback about how to deal with that.
Negotiating Lower Payments with Debt Collectors
There are tactics and timing you can learn that will better prepare you for dealing with outside debt collectors trying to get you to pay a charged off credit card bill. I cover some of the basics in the above embedded video. Here are some additional way to optimize results:
- When and how to get a deal by settling a charged off credit card debt.
- When to pass on an offer because there is a high likelihood a better debt settlement offer will be available later, or because the offer is a stretch for you financially.
- What your specific creditor will allow the debt collector they hired to do when settling or accepting payments on the charged off account (which leads to you getting the best deal).
- The tricks and tactics that debt collectors will be use to get you to pay more than was necessary.
- What is considered debt collector abuse and violations of fair debt collection laws.
- You can get professional debt help at an affordable cost.
If you post more about the debt collector and the accounts you are dealing with (collection agency name, original creditor name, balance owed, when you last made a payment, what state you live in, etc.), I can offer helpful feedback to you about each of the above bullet items.
If you are struggling with multiple credit card debts that are in the post charge off debt collection stage, it is important to understand your options and identify your resources for handling the accounts before they end up in, or are immediately placed into, the more advanced stages of debt collection – which can include being sued by a debt collection attorney.
It is sometimes important that your next step to deal with your now charged off debt be the step you take to put the debt to rest before the situation can deteriorate further.
Anyone with questions and concerns about a charged off credit card debt is welcome to post in the comments below for feedback.
I had my personal information stolen and used to open an Aspire credit card. After I vacate aware of this I filed a police report and informed the credit agencies. Aspire wanted me to name a to name a roommate in the police report but I declined because of his innocence. I later discovered a likely suspect but when I contacted aspire I was told the file was closed and there was nothing they could do inspire of my having new evidence.
Today I got a letter fromCKS financial.
What is my best move but I do not want to pay a debit that I don’t own?
Are you saying the outcome of the ID theft is they refused to recognize the fraud because you did not who did it?
Check out my article about how to file a complaint against Aspire with the CFPB.
Hi Michael,
I have 3 questions as follows: 1) After a credit card debit has been charged off and a law firm sues, is the debt still with the credit card issuer (Capital One)? I asked the collector/law firm personnel if they had bought the debt and they said no that it was still owned by Capital One and they are collecting the debt on bank’s behalf. Is this correct? 2) How can I better negotiate the debt? The balance is $5100 but they would only reduce by $700 and says that is all the leeway they have. 3) If I agree to come up with the lump sum, how much time in general will I have to to make that full payment?
Thanks,
Rene
Received a call from from United Law group at my work today and they also called my brother. They stated this bill was from Household Bank under Capitol one. I don’t remember this account but they had all my personal information. Giving me today only to make a settlement payment. They offered to let me pay in 3 monthly installments. I live in West Virginia. They would not give me any information on when the account was closed. If I do owe this accountit has to be from at least 9 or 10 years ago.
I have a debt that charged off for $4500 back in 2014 and now I’m getting a notice from a collection agency with a copy of something showing they are ready to file a lawsuit and have the papers ready to file in the court if we don’t pay it asap. It all looks fake and I’m trying to figure out if this is all a scam or what…
What state are you in? When did you stop paying on the account at issue? Who are all the players involved (original creditor, debt collection company and/or collection law firm)?
Live in Texas. Citibank was original creditor and with midland collections and Scott and assoc law firm now. Stopped paying in like Aug if 14
It is highly likely it is for real. What is your goal for resoling this?
I have several debts both credit card, medical, and dental that most have been charged off. I am making a small payment to each trying to show that I know I owe the debt and was told as long as I make some monetary effort, they are not able to proceed with legal action. I hope this is the case?? Many of these are accts that have been sold to debt collectors. There is no way I can even come close to the settlement amounts being proposed. I do want to pay something to show I want to pay the debt, especially the medical bills that I do believe payments are going straight to the original debt holders. However I have been in contact with some of the credit card companies that have let me know the debt was sold. My question regarding this is, what legal action if any can they take against me. A couple of the credit collectors have actually used bullying and threats with me and one in particular told my place of work that they had to speak to me because I had a claim against me and had to be in our county’s circuit court the next morning at 9:00. She also told me that I had a felony fraud charge and when I questioned this, she denied she said it although over and over she was telling me the conversation was being recorded. I let her know I was happy about that. When I asked to speak with someone that was willing to answer questions she threatened me that if I didn’t let her help me, she would follow through with legal action immediately. I am making an effort to pay, but at this point does it really matter since the original company is not receiving the money? I am following David Ramsey’ s plan and will pay more as I get others paid off, but that matter? Can they still pursue me legally? Thank you so much for your help. Reading some of the other posts and replies have been helpful as well.
You were told wrong. Making small monthly payments that do not meet a required minimum, or are not part of an agreement you set up, will not rpevent further collection action. And depending on how small a payment you send, you are not putting a dent in the debt at all.
The collector that told someone at your job about a court hearing is likely a debt collection scammer.
I like Dave, but his advice about paying is far from helpful in some scenarios like yours.
How much does all the debt add up to?
Hi Michael, I had a charge off from a husqurvarna credit card. I had 2 accts totaling around $15k. The question is i just received a letter from an atty representing portfolio recovery assoc. not husquvarna. And it was only for one of the accts. How can a debt collector be using an attys office to a debt the dont own. Should i worry about this?
Yes, you should be worried about this. PRA is a debt buyer, and they sue a lot. You are about to be sued, as evidenced by the attorney contact.
Debt sales are common. You can settle in your situation for sometimes half the balance owed. You can fight the litigation. You can file bankruptcy.
Doing nothing is not a great option when things get to this point, but it is the path many choose.
Received a letter from Suttel, Hammer and White attorneys at law saying Capital One has authorized them to accept a sum for full settlement- can be made in 2 payments or monthly but within 14 days or further collection efforts will be proceeded with. This is the first time receiving anything from this company, yes we got behind on our capital one account and it was charged off. We dont have the money to pay this or a few others . I am worried about further collection proceedings, judgements etc. I also do not know if this place can be trusted and what options we have ( if any) at this point,
You can settle for a lump sum that is less than what you owe, or set up payments with Suttel and Hammer. Short of that, it appears you will be sued shortly. There are options to think about when that happens. Read more about settling a collection lawsuit.
What is the balance owed on your Capital One account? How long until you can raise half of that? Have you looked at your options with chapter 7 bankruptcy?
The balance due is $1829′ they offered a $1371 settlement. I can maybe get together a few hundred but not half. We are not eligible to file for bankruptcy.
When they sue you can start out defending the case and buy yourself some time to settle out of court. You are looking at half as an optimistic outcome then too.
Ok, thank you for your help!,
I have a BofA credit card. A few months ago I contacted them asking if they could lower my interest rate because I couldn’t make the minimum payments. They said “no”. I then told them I could only pay $300.00 per month against my balance and they said that was “not acceptable”. I started paying them $300.00 per month at that point since I wanted to pay something. I’m not trying to get out of my dept I just wanted a little help. They then contacted me and said they would settle for half of my balance but I would have to pay it off in 3 months. I told them if I could pay that much per month there would be no need for a converation at all. I owe BofA credit card $14,699.00 and they are telling me they are going to charge it off. I’ve consistently paid $ every month on time to BofA. Can they still do that? Not sure what my options are at this point.
The 300 a month in your situation is often a waste. You have to bring your account current in order to prevent charge off. If not, they are going to do it regardless. They do not really have a choice. Accounting rules require it of them.
You can settle for a way better savings than that. Call me for a consult at 800-939-8357 ext 2, or fill in the talk to Michael form in the right side of this page so we can email each other and find a time that works for us both to talk on the phone.
Hi,
I live in Florida. I had a credit card with CHASE WAMU which was posted as “charged off” on my credit in 2009. I received a call from a “legal dept” saying that I had until today (July 11 2016) 4PM to work something out with them or on July 21st 2016 the bank will sue in court for breach of contract! that legal dept said that they could levied my accounts, garnish income or place lien on my car….I was under the impression that the statue of limitation in Florida was 5 years even for a breach of contract…I checked on my credit report and that account is not showing on my report anymore..I requested that legal dept to give “validation” of the debt but she said that in the “breach of contract’ they do not do that anymore….could you tell me what I should be expecting?
Read through my post about debt collection scams. You will understand why I think you are being targeted by a scammer, and what to do about it from here.
Hi Michael,
Thank you for your informative articles. I’ve read through a few of them to figure out exactly how to proceed in settling my debt.
I have a BofA credit card charged off back in 2012. It’s actually been quiet until a couple of months ago. Then the letters started to come again from a collection agency (Credit Control LLC). I’ve honestly just forgot about it.
So a few things about this debt:
1) As far as I can tell from my most recent credit report, it has been charged off by the original creditor (BofA). But the full amount is still reported which makes me think that OC still owns the debt and that they just assigned the debt to a collection agency.
2) There are no collection accounts reported on the credit reports by any of the 3 CRAs, just the charge-off account showing.
3) SOL is not passed yet (in CA).
I do have the funds to pay the debt in full and just want to put this behind me. I just want to know the best approach. Should I contact OC (BofA) and settle with them if I can pay in full? Do I have no choice but to deal with the CA (Credit Control)? Should I request anything from them like something in writing before I send a check? Do I have any pull in negotiations?
I don’t look forward to talking to them but if I know what to say in advance, I’ll be less anxious.
Much appreciated,
John
You have the pull needed to negotiate a settlement and get it all documented before you send a penny. You will be able to get the credit updated easily so that situation will improve too.
You will typicality be calling the debt collector to resolve the debt, but call me for a consult if you would like to go over how to optimize your results. You can reach me at 800-939-8357, option 2 rings my desk.
Hey Mike,
I lost my job and have not paid my credit cards for 7 months. My debt is huge. The companies, Chase ($19k of debt) and Bank of America ($30k in debt), have charged off the debt and the collection calls have started. I am still not working and am struggling to pay my utilities and keep my house, so there is no way I can make any type of deal with the collection agencies to pay anything. My questions is this: Is declaring bankruptcy my only option?
Thanks
Robert
Filing bankruptcy may not be your only option, but it could be your best. What state are you in? How much equity do you have in your home? Do you have nonexempt assets that would be at risk if you file chapter 7?
You can hold off filing bankruptcy for quite some time if your goal is to settle when your finances turn around. Assume you will need 15k to settle both accounts at some point. If you are back to work, how long does it take you to raise that amount of money to avoid the bankruptcy?
Hi! I owe just over $17k to discover bank and I was summoned today at my house. What are my options? Who would I call to make a settlement? I’m curious if they would take $5k as a settlement offer? That’s really all I have. Should I contact an attorney? Or do it myself? It’s been about 1.5 years since I’ve made a payment. Thanks!
Settling for 5k now that you have been sued is not common on a debt that size. It would have been an optimistic target without having been sued by Discover.
How long will it take you to raise another 3 to 5 thousand dollars?
I do encourage you to reach out to an experienced debt collection defense attorney for help answering the complaint, which can buy you time you need to raise more money to settle the collection out of court.
Hi,
My home depot account was just charged off. The balance is about $800.00. I spoke to a representative who said I could pay $400 down and make monthly payments of around $100 until paid off. She mentioned nothing about settling . I just got the letter today. Should I wait and then ask to settle? There is no way I can make the above payments as I have a lot of medical bills.
Can you pull together the 400 in a lump sum? How long will it take you to do that?
Maybe 5-6 months. I also have a capital one balance that I believe will be charging off soon if not already.
How much is the Capital One balance? I would be looking to save up and settle with them first and let the charged off Home Depot account wait. Capital One will sue for a few hundred dollars.
Probably around $3000.00. Do you mean they will sue over a balance of a few hundred or will sue us to pay a few hundred dollars?
They will sue over small balances. I typically target charged off Capital One accounts with debt collectors at 50% settlements. I did start off the year seeing a 35%-er, but those are not common. I hope they become more so.
My mom is 71 years old and she had an old credit card with Citibank that she refused to pay because she claimed they were robbing her. I didn’t know about it at the time and apparently this fell into a charge off situation. This was probably close to 12 years ago. The debt was bought by another company and they had been calling her for years to pay it, which she did not. My mother doesn’t have a penny other than her social security and because she claimed they were cheating her she never paid anyone anything. To make a long story short, I recently looked at her credit score and noticed a public notice about a legal action taken. I’m guessing they took it to court and since she ignored all the letters they made a judgment against her. I can see the outstanding balance at around $750. They’ll never collect it from her, she owns nothing and lives off of her monthly social security check and a very small $200 a month draw from her retirement fund which holds very little money. She’d like her credit to be done with this but it’s been 12+ years and I’m guessing it will never go away. Any advice on what steps should be taken next?
The next step depends on the goal. If she cannot pay anything toward the debt to resolve it, there is nothing much to do from here. If there is an interest in settling the debt with the debt collector that has it now, she could likely get a good deal given her limited resources.
What is the goal?
Who is the debt collector involved?
Why would you suggest someone pay a penny on an account that is way past the SOL? Shouldn’t she just tell the CRA to remove ot from her report immediately?
My comment was not related to credit reporting, but what the poster suggested is a court judgement.
I have a Target debt of 7166 charged off last payment 11/2010 and live in NJ. I have not heard anything about this one.
They had made an offer thru collection agency years ago for 900 a month for 3 months which I could not afford. I countered at 350 a month for 12 months which they refused to accept.
I am now of the recourse of letting it ride but would like some advise from someone that has knowledge of their practices.
Do you have any financing goals, such as buying a home, in the next 2 years?
I live in California and I am being sued by Discover – but the attorney is listed as Suttell Hammer & White, which I hear is really the debt collection agency (?) My debt is $12,020.00 and I wish I had money to settle but I don’t. Do I just file my response with the court in the meantime? What if, after filing my response with the court, I come up with the money to settle, is it too late? This is all so confusing and frustrating and I don’t know where to start. Thanks!
Discover has not been selling much of their unpaid credit card debt for the past several years. Suttell, Hammer and White are the debt collectors working for Discover.
If you respond to the lawsuit, and progress the case efficiently, you can buy your self many months of time to pull together money to settle, which could help you avoid a judgment.
Is that the direction you would like to take this?
Quite honestly, I’m not sure what direction I want this to go. I do know that I should be filing a response with the court to avoid anything severe.
That said, what are my other options? And secondly, when filing a response, do I write a formal letter or is there a form I fill out with the court?
Thanks again.
I am going to email you contact details to an experienced debt collection defense attorney in California. I want you to call and talk over your situation with him. He offers a no cost consultation, so take him up on that and get informed about what you want to do from here.
He covers cases all over the state, so distance is not an issue.
That would be great! Thanks!
I have a debt that will probably soon charge off. It is the only bad debt I currently have as it was a loan to the company that I work for which is now financially tanking. I don’t have the money to pay this personally as it is 20K. I am trying to hold off the charge off until I have some money that I can use to settle. I have excellent credit otherwise, own a home etc…
My question is two part:
1. Should I try to negotiate a settlement prior to the charge off. I am probably only going to be able to pull together 30%
2. If they won’t settle, once the debt collector becomes involved, how can I find out if they bought it or if they are working for the creditor?
I am gathering from what I have been learning that this information will help me during the settlement as your video illustrates. The company is Elan Financial Services through Mechanics Bank and I live in CA.
I have long found negotiating a workable settlement with the original creditor to be preferred. You avoid the risk of being sued entirely, can often prevent further credit damage, and can sometimes strike a better deal than may later be available with debt collectors directly after charge off and/or when the debt is sold.
If you cannot strike a deal, you move on to settling accounts in later stages of collection.
You can often tell if your account has been sold by the name of the company collecting. You can call the original creditor to ask if they sold the debt, and look on your credit reports to see if the original creditor now shows a zero balance owed to them.
I recently found out that an accuintance had taken a credit card out in my name. they had been making payments on the card but stopped about a year ago. The account charged off, the collection company has filed a law suit on the account ( I was just served papers). Is there anyway to get this so it does not show as a judgement on my credit report?
The way to avoid a judgment appearing on your credit report is to settle or pay it, and negotiate the dismissal as part of that agreement.
Can you provide more detail about who took the card out in your name and made payments, and how it is you did not know about it, and then came to learn of it? Some clarity on all of that may help me offer feedback about other options.
It was a family member that was staying at the house. I found out when I was served papers and then checked my credit report. I am dealing with the family member and don’t want it to go further than between the two of us. But I don’t want this on my credit report either.
You can settle with debt collectors even at this late stage of collection. The more you look like someone in hardship, the lower the deal you can negotiate. But if you look like someone who pays all their other bills on time (as may be the case with you),but just not this one, you can often expect 80 percent-ish lump sum settlement as being more realistic.
Can you pull together the money to do that?
Is it the debt collection company suing as the plaintiff, or the original creditor?
It is the debt collection company sueing me. The total is $880.00. Would I have to go before the judge to work out a settlement or can I do it with the collection company? My credit is not in good shape, I was just starting to rebuild it.
If your credit looks bad, you may be able to negotiate a better settlement, and before court. Can you come up with 5 or 6 hundred?
Also, if you needed more time to save more than that to pay this off, defending against the debt collector can often buy several months time, and you can negotiate the deal before the risk of judgment that way too.
I started a couple clothing store credit cards to build up my credit score and they were abused by my now ex boyfriend and I have unfortunately been trying to make payments on. I now believe they have been charged off because one I checked the balance on to send another check to them, and it stated $0.00 balance. How do I know if they have been charged off if I haven’t received any mail or phone calls from them or debt collection companies?
Call the creditors and ask what the current balance and status of your accounts are. It sounds like the one that is now zero balance was charged off and sold to a debt buyer. Confirm that with the creditor and ask the name of the debt collector they sold it to.
Post what you learn and lets see if you can put together a strategy to settle with the collection agencies for half or less, rather than make small payments.
I had 2 accounts with a big credit institution, for approx. $1,200 & $3,400- $4,600. Both are with the same collection agency and went in to charge off in the past 6 months. I answered their call one day and made arrangements, right off the bat, for $65.00/mo. For 60 mo. automatically coming out of my bank account. But this was only for the higher balance account. Should I have tried to negotiate something for both then? I have been in this situation before, unfortunately, and remember receiving offers for settling at different amounts, but all at once, for ex. $800 for the entire account to be settled if paid all at once. Is there any advantage on my credit from making payments vs. paying all at once? Does my low credit score (as a result of the charge off) improve in any way by this account being fully settled, although it went into a charge off status? I live in CA. Thanks for your time.
Quick change, did some math. The account is for $3,887, not $3,400.
If your credit score recovering is your primary concern, saving up, or pulling together the money to settle with a lumps sum amount, but for less than what is owed (say half), would be better than long term payment like you set up with a collection agency, and when dealing with an already charged off account that cannot be reaged.
Assume you could settle with the debt collector for 2,000.00-ish. How long for you to come up with that money?
P.S. I will homestead my house, but am interested in what is exempted from debt collection. I am self employed and am payed mostly from health insurance companies. Can those payments be garnished? Thank you.
Post a reply with the state you live in. I can respond with all relevant exemptions.
I live in California. Thank you so much for responding so quickly.
California protections from judgment creditors
40 times CA minimum wage protected from garnishment.
Value in your automobile is safe up to $2,900.00 dollars.
75 thousand home equity, 100k when married. There are more protections with low income qualifications met, and additional elder law that can apply uniquely.
California protects your household stuff from debt collectors.
California protects your deposited wages from debt collectors.
I have 3 charged off credit card accounts with ARS National Services. Two are Citibank cards and I have been offered 48 % of the balances to settle. The third is WAMA/Chase and I have been offered a 40% settlement. Of course, I am looking for the lowest possible percentage, and haven’t run across any info on the website on ARS. I would have to borrow money to pay the settlement amounts, and the taxes the remainders would create. They only give me about 3 weeks to respond, and I don’t know how much room I have before they try to sue. Any guidance is greatly appreciated. Thank you.
You may be able to save more on all of the settlements with the debt collectors. Are you okay with calling the collection agent and negotiating (explaining your hardship, establishing the borrowed money is their best shot at getting paid, using situational details to improve your chances of saving more)?
Absolutely.
I have seen Chase settlements with outside debt collectors go for as low as 30% with lump sum payment. Not all accounts will settle for under the common 40% target that Chase has. When was the last time you paid Chase?
There is room to negotiate the Citibank cards. I do not see many Citi credit cards settle for less than 40%. Only a sprinkling of them in the last year. I see some accounts get held fast at 45%, with no better reduction than that, and that is a figure you are already really close to. How long ago were your Citi accounts charged off?
Are any of these accounts branded credit cards (i.e. Chase Disney, Citi Home Depot)?
I am not sure how to determine charge off dates, but here is relevant info.
The last payment I made to Chase was November 15, 2013. I have a letter from Allied Interstate dated April 2, 2014, and then the first one from ARS on September 5, 2014, with an offer made on October 4. It is a Chase Slate card, not branded.
I last paid the Citi Mastercard on November 14, 2013 and the first letter from ARS is dated August 27, 2014. The other Citibank card is a Sears Mastercard, last paid on May 4, 2014 and first letter from ARS is dated September 22, 2014.
Thank you for this invaluable assistance!
I would start with a 25% counter offer with the Chase collection agency. A great result would be getting something around there, and upwards of 35%. If not approved the first call with the debt collector, I would try again a few days later.
ARS National Services may not have the room to go lower than 45% on both of your Citicards (or either). But I would call and counter offer 30%. Same thing here, if ARS does not come down at all, try again a few days later.
Just to be sure, ARS is the debt collector on all 3 three of these accounts right?
Yes, all 3 are with ARS
I was able to borrow a small sum from a relative and settled the Chase account at 25%. The best ARS will give me on Citibank balances is 43%, which is more than I have. What will happen when the deadline lapses and I don’t settle?
As I understand the list of exemptions you gave in CA, my car and the motorhome my estranged husband is living in would not be exempt. I should mention that my business and personal bank accounts are with Citibank. Can they freeze them?
Thank you.
I do not see Citi freezing your accounts.
How far off are you from having the 43% needed to settle with the debt collector?
If you do not settle with ARS, the debt will land somewhere else. It would be best if it did not land with someone with a high likelihood to sue, as the settlement percentages tend to be less favorable than is on the table now.
If they give me a few months to pay the balance, I can do it. Sounds like I should take the 43% . Thank you.
Paying the settlement amount you negotiate over a few months is often an option. Be careful with trying to stretch the payments out too far. The debt collector may see you more as someone who can afford xxx.xx amount each month for the life of the balance, as opposed to a better settlement opportunity.
Who can I contact or consult about settling a Charged Off commercial account? It was an equipment lease with Key Equipment Corp. Original lease was for $82K. We have been making payments to the assigned debt collector for several years now and they claim to have been applying the payments to principle. So at this point the principle balance should be under $8k. The collection agency (McCarthy, Burgess & Wolf) said that there is about $50k in unpaid interest as well as a $9k collection fee.
I need settlement advice in terms of amount and tactics as well as an understanding of how the debtor and their agency see things.
Thanks
You can fill out the form on the right side of the screen and request a consult. Those all come to me. I will connect you with a specialist you can talk to about more options.
Hi Michael,
I hope you are doing well. I have about a $6400 debt with GE Stein Mart Credit Card, and it was recently (4/30/14) charged off and the balance fell to zero and the note said sold/transferred to collection. On my credit report there is nothing from the collection agency, but they have been continuously calling me. I have not answered at this point, but I do want to figure out this debt. Here are my questions:
1. Is it too late to call the original creditor and ask them to remove the charge off if I pay the payment in full? Is that even a possibility?
2. when i stopped paying the account it was actually quite ignorant, the payments were around $200 a month and I tried to ask them to temporarily lower it as I was in school, but they didn’t so I stopped paying. I wish I would have managed to pay and keep the account open until a time when I could make more payments, would they ever reopen it, continue to charge interest if I ask? I feel like that is more beneficial than a charge off?
3. Now that is has been sold to collection, will another file from the CA show up on my report? will this stay on my report for 7 or 4 years if I am in California?
4. What is the best option here? I know I could try to settle with the CA, but I want to fix my credit the best possible way by either having the charge off erased or the phrase changed to something less detrimental to my credit. Is this possible?
Thank you,
David
1. No possibility of getting the charge off removed, or of even dealing with GE Capital. They sold the debt, and even had they retained it, if the account is already charged off, you cannot unring that bell.
2. They do not have a forbearance program for credit cards like you described. You can often miss a month or two of payments, and get those caught up in full and keep the account open and functioning, but anything longer than that, or too many requests of this nature, and the last ditch effort of lower payments and reaging get doen through a credit counseling program.
3.There may be another entry from the debt collector. Depending on who it is that bought it, you may be able to get a deal in place that prevents anything additional from appearing on your credit reports. Midland Funding, or Midland Credit Management (part of the same group of companies), is one large debt buyer with a program in place that allows you this option, but only in the early months of their having picked up your debt.
Any additional debt collector reporting should remain on your credit report for as long as the original creditor reports that charge off. The exception would be if sued for collection and a judgment entered in the court. That would result in 7 fresh years of reporting the collection judgment (to be avoided whenever it can).
4. Ge reporting the charge off on your credit report is a ship that sailed. Getting something done with the debt collector now may/may not prevent anything new appearing on your credit. Either way, resolving the debt is how you manage this setback and limit the impacts to your credit.
Post who the debt collector is, and assuming you can settle for 40% of the balance owed, how long it would take you to come up with that amount?
Hi Michael,
I owe Discover cc. $9255. They sent me a Letter stating with bold letters Attorney Placement Pending. It says if I don’t respond by May 30,2014 it will forward to Attorney to obtain a judgement against me… I called this morning to settle for 30% they said no the lowest they can do is 40% plus they said my account is $9,555 due to the billing cycle that roll over this month… I told her about the letter I received from them and the balance is $9,22.78 she said I’m sorry about that but due to the billing cycle I owe $9,555. She also said I have to make some kind of payment to stop the paper work for the Attorney. I told her I need a settlement paper before I give a payment she said in order for the paper work to stop the attorney I need to state that your going to give us at least $50 so she can’t stop the paper to Attorney… She also said that I need a bank account to settle with them I told her I don’t have a bank account.. In order to settle I need to open a saving/checking account.. I told her can I just pay with money order she said no it has to be with checking/ saving to do the settlement…. Plus she stated several times that to call her as soon as I pay $50 today so she can put in the computer I paid $50 for good faith witch she states it means holding payment . It will go towards my account balance…
My question is that true, that I cannot pay with money order it has to be with saving account/ checking account only????
ivette – Discover card is not the only bank out there that looks to set up settlements with an auto draft from your bank account. Setting this type of payment up is not problematic when you know you have the money. The problem is when you think you may not be able to follow through with the Discover deal, but set it up anyway, which you should never do in the first place.
Read through this debt settlement letter report, and the comments too: https://consumerrecoverynetwork.com/debt-settlement-letters-agreements/
I do encourage people to pay settlements through a set aside account that is dedicated to the purpose. You can read more about that in this report: https://consumerrecoverynetwork.com/paying-your-credit-card-debt-settlements/
Hi, I have struggled to find a job since I graduated in October, and as a result have been unable to pay my credit card bill. It is set to charge off in a couple of days now. I have the money I need to keep it from doing so, however I am not confident that I will be able to continue with payments after this initial one to reset my account. With student loans coming due on top of everything else, I am not really sure what the best thing is to do at this point. Please advise, thank you.
What is the approximate balance, and who is the card through?
It’s approximately $12,500 through Wells Fargo.