Bank of America – Settling My Charged Off Credit Card and Debt Collectors
I do have some knowledge of credit repair/collections/debts, etc, but I have some specific questions that I don't have answers to and there is a disconnect that happens in my mind when I begin trying to figure out where they truth actually is with respect to collections/charge off procedures, etc. I want to take the necessary steps to clean up my credit, but there are serious issues that I am having because there was about $35,000 of credit card debt that I let go, spread over different credit cards and I don't want to make mistakes tackling this issue.
Therefore, if you don't mind, I will ask several questions:
1) Part A: When a consumer (such as myself) stopped paying a credit card account....i.e. Bank of America...and it is 3 months past-due, am I correct that at that point, it sits in the internal collections department of BofA? (I had this happen to me, but not sure if this is correct).
Part B: After this account was Charged-Off, did BofA sell the debt or did it assign the debt, and how would I know?
Part C: Since a Charge-Off is a Write-Off (and in this question - BofA), usually doesn't the bank, BofA write the ENTIRE amount off their books as uncollectable debt and get covered by FDIC for the entire amount, and if so - how then can they sell the debt to a collection company if they already got paid...or do they only sell 10% of it for (i.e. - 10 cents on the dollar for the entire amount) and get covered for the other 90%?
2) Part A: I noticed that on my report there are charge-offs and open collections. In speaking to mortgage lenders, they expressed a concern and told me that all my open collections would need to be paid if I wanted to buy a house. Are these open collections assigned by the original creditor or was the debt purchased, and what about in the case of charge-offs....if it was a write-off, how could a collection company purchase it?
Part B: (Sort of mimics part A, but slightly different) When it says "Collection" on the report, not "Charge Off", does that mean this is a newly created collection item after the sale, after the Charge-Off occurred by the original bank, or did this collection report, while this was with the original creditor?
3) How would I know when specifically to use the debt-validation tactic? (as I read your blog on backfiring and I don't want it to backfire on me)
4) Is there a point in disputing an item that is being reported by a collection agency/original creditor, if there is still a balance being reported? (wouldn't they verify it anyway?)
5) Part A: Statute of limitations normally is 4 years from last DLA date....should I wait until this expires to try to delete the item or would it not matter? (as after 4 years they legally cannot collect on it)
Part B: Is there a point in settling a collection/charge off account (if this is reporting under different collection agencies), if the original DLA expired on the original bank account, or is there no way to stop them from selling/assigning and selling again to new collections...and how can I permanently stop this process?
If you can answer all of these, you are a hero because after reading too many forums and all kinds of sources, I still cannot fully understand the truth about this and where should I begin.
Thank you for your time and I really appreciate your help in advance.
What are the pros and cons of settling my charged off bank of America credit card that is with a collection agency?
—Adrian
1a. Bank of America does currently tend to keep accounts in internal collection departments when the credit card has not been paid for 90 days. That is not always the case though. BofA can and does assign unpaid credit cards out to assignment collectors prior to charge off.
How to Find Out What Bank of America Did with Your Unpaid Debt
1b. You can find out which way Bank of America went with your account by:
- Calling Bank of America and asking who your account was placed with or sold to – just keep in mind that if your credit card balance was sold to a debt purchaser, that buyer may have sold it off to another debt buyer.
- Running the name of the company trying to collect from you against a list of usual suspects in the debt collection and debt buying world and identifying whether the company is likely an assignee or buyer.
BofA insurance claims against the FDIC for charged off credit card accounts:
1c. Where are you getting your information about banks insurance claims with the FDIC? The FDIC insures depositor funds.
Banks charge off credit card debts that remain unpaid. If they sell the debt right away or later on, they would make an accounting adjustment at that time. Charge off happens as an accounting function. If Bank of America is later paid through a debt collector they hire, or sells the debt for say 9 cents on the dollar, they adjust the accounting.
You mentioned you are somewhat confused after reading many web sites and forums. I would suggest not putting too much value into anyone of them that gave you an impression there is FDIC insurance for charged off credit card debts.
Charge Off Shows on Your Credit Report From the Original Lender
2a. In this instance Bank of America. A debt collector may report an additional entry at some point as well. If a debt buyer is reporting the collection account, the debt buyer will show a balance owed, while the original creditor would need to show there is no balance owed to them (as they sold it off). Be sure your debt balances are not being reported as owed multiple times to multiple places.
Just because an account is charged off does not make the debt noncollectable. Charge off is an accounting function. The debt remains. As mentioned above, if something is paid on the debt after charge off, the amount paid, if received by the bank, will cause an accounting adjustment.
Debt buyers purchase charged off debts. It is a practice that became popularized after the savings and loan crisis in the 80’s. They buy the debt because the bank is a willing seller. The legal transfer right is your original creditors.
It is possible to purchase a home with unpaid collection accounts. Lending standards have tightened some. It is not too surprising you are being told that unpaid collection accounts are a barrier to a home loan. The barriers are set by the lenders and underwriting standards. The underwriting can change a bit from lender to lender or even from person to person. Resolving the accounts by settling them may indeed be required though.
Collection Agency Shows Up for the Same Account on Your Credit Report
2b. Accounts below that heading are all collection accounts. Accounts that appear there are generally going to be accounts sold off or assigned out to a collection agency.
Charge off is an original creditor reporting item and would appear in the banks trade line they have on your credit report.
Debt validation is your right:
3. Requesting a debt collector or debt buyer validate sets a few things in motion.
My cautions about debt validation are generally (but not always), aimed at someone who wants to resolve old credit card debts by settling them for less than the balance owed. If you want to verify the amount owed, or that the debt collector is the proper party to negotiate with, you can do that over the phone with your original creditor.
How and when a debt validation request would backfire on someone who wants to settle a debt will be situational. There is no way to cover this caution well without knowing a great deal more about who the debt were with originally, where they have been placed for collection along the way, and who has the debt now. If you would like to provide all the details about the accounts in a comment reply below, I can get into more useful feedback.
Credit report disputes:
4. There is a point to disputing an entry on your credit report. It requires your dispute be investigated.
If that investigation turns up inaccurate, out of date, or erroneous reporting, it gets fixed. If there is no response to the investigation efforts of the credit reporting bureaus by the furnisher of the information (bank, debt collector), the item should be deleted. If sending a dispute just because you don’t like something on there, but the item is valid, it would likely be a waste of time and postage (though not always).
Credit Cards in Collection and your states SOL
5a. If the statute of limitations is past in your state, disputing collection entries for credit card bills will run into the same issues as in item 4 above.
The longer its been since a payment was made on the account your disputing, there may be a slight increase in the percentage chance you get an item removed because no one responded to the credit reporting agencies investigation request.
A balance being reported as still owed on a collection account is not going to be the only validation metric. You could have a zero balance being reported by Bank of America, and no one else reporting the account at all. That would not mean you can easily dispute away the charge off entry on your credit report.
Settling Credit Card Debts Past the Statute of Limitations
5b. If old charged off credit card debts are passed the statute of limitations for you to be legitimately sued in order to collect, and the accounts are with debt buyers and collection agencies, it may still make sense to settle them for less than the balance owed.
In your case, you are looking to purchase a home but underwriting suggest you settle the old debts before being approved. Settling debts that are past the SOL for you to be sued are often done at the steepest discounts. Just be sure you are up to the negotiations and never let on that you are trying to accomplish something other than just settling and moving on with your life. If a collector is aware you have a credit purchase or credit report need, they may not go as low in the settlement they agree to otherwise.
The shelf life of unpaid debt:
There is really not much you can do to permanently stop the next debt collector or debt buyer from getting your debt and at least making one attempt to collect from you.
Bankruptcy is probably the most thorough way to eliminate collection calls and letter, but even then, collection calls can happen.
If your debts are passed the SOL for legitimate lawsuits, and you are not going to attempt to resolve any of the debts, you can always write cease communication letters to any debt collector or debt buyer you hear from. A cease communication letter triggers certain rights under federal and state laws. It’s the epitome of telling the collection agency or debt purchaser to go pound sand. If they don’t follow the law after receiving the cease communication letter, you can pursue them for collection violations. Be sure to send the letter certified mail return receipt requested and keep the green card and a copy of the communications you send in a safe place in case you need them later.
For more information about some of the topics covered above I would recommend reading:
About Michael BoveeMichael started CRN in 2004 with a mission to provide people in need with detailed debt and credit help and education. Michael has participated as an expert panelist in federal consumer protection rule making, collaborated on state law changes governing debt consolidation, has worked as an expert witness in court matters related to the debt relief industry. He is available to speak with you about your financial struggle and helps people resolve their debt problems daily.
I am being sued by Bank of America for a unsecure loan in the amount of 56,000. I have been paying this Loan for ten years I now owe 10,800. My last payment. To them was last year when I went into default due to hardships. My question is will the judge take into consideration that I paid 75% of it and the interest I paid in it for ten years already paid that amount. Would the judge lower the payment? I already spoke to their lawyers and they wanted 200 monthly but I can’t afford that now.
The court is not there to consider your past timely payments, just whether or not you owe the balance that remains.
What if you could settle the Bank of America account for half the balance? If you had, say 6 months, do you think you could pull the money together?
Recently I consolidated my debts with Clearpoint Credit Counseling service. BOA was the only credit card to refuse this request. Next I went to BOA and requested their payment program. They also refused this request. BOA is the biggest reason I went into consolidated debt management program, their fees are too much. I continue to get late payment fees, even though the card was closed 6 months ago. I would really like to repay this loan or perhaps file bankruptcy on just this loan? What are my options? Thank you.
What is the balance owed to BofA? What is the interest rate? How long have you had the account?
The interest rate is 23%, balance 10,000. The card had been open since 2010. It is currently in arrears, because I cannot get them to accept a payment plan.
When did you last make a payment?
How much of the balance owed is from balance transfers, cash advances, in the last 12 months?
What if you were to settle only this BofA account for less than the balance owed? How long would it take to put your hands on, say 4k?
I would not be able to do that at this time. Payment arrangements with my other debtors allowed me not to have to file bankruptcy. This is the only account I do not have payment arrangements. That is my dilemma.
You could settle for lower than 40%. Sometimes much lower. But I am trying to determine why BofA is not accepting the credit counseling payment proposal.
Can you answer my other questions about your BofA credit card usage?
Did Clear Point Credit Counseling tell you why BofA would not do the DMP? Do you have too money left in your budget after all your bills are paid (or too little)?
You can often set up payment arrangements with a third part collection agency BofA sends your account to, but I am not a fan if you can avoid it.
I’m pretty much in the same exact situation and almost the same amounts. I believe they didn’t accept because on paper I have money left over.
Dear Mr. Bovee,
I live in Texas. Back in the early 1990s my business failed. I defaulted on several bank credit cards with balances of several thousand dollars. (2-4K each) I am now retired and living on a very modest social security income. I recently received a check for proceeds from a personal injury case in the amount of several thousand dollars. The check to me is written on an account of one of the credit card issuer banks that I defaulted with more than twenty years ago. It is one of the larger national banks. Can that bank seize the funds if I deposit that check to my own bank account or take it to their bank to cash? Thank you. James
Were you ever sued for collection? There would have to be an existing judgment for those funds to be at risk.
i was never served with any actual lawsuit but I did receive demands for payment from the bank and there could have been collection efforts from third parties but I don’t recall if there were, but eventually, after I didn’t pay the exorbitant requests for payment their efforts to collect from me did cease, after a year or two. But my understanding from reading online is that banks never forget or forgive an unpaid debt even after the statute of limitations bars legal action, that is, while the statute of limitations stops the ability to collect via a lawsuit they do not stop a bank from other means of collection, and since the check is drawn on that bank I was afraid that my name and address, which are on the check I received from my lawyer, would bring up a flag that a debt is owed when the check is processed by that bank. I was thinking of calling the bank to ask if they have any record of debt that I owe the bank but I was afraid that might cause them to flag my name, address and possibly my ssn in case they do find a record of the old debt and I try to deposit any check drawn on their bank. I honestly cannot recall if I settled that old debt from back in about 1992. I know that I did settle a few. Thank you very much for any insight you may provide. James
I suspect you have nothing to worry about. But if you like, I can email you a list of experienced debt collection defense attorneys you can call and run this by? What state are you in?
i am in corpus christi, tx thank you very much.
We have a lien on our property from old B of A credit card that we our trying to have removed.
This card was discharged in a chapter 7 4 years ago. FIA was the collection agent at the time and the ones that filed the lien. But now tell us they no longer handle it (the lien was filed in 2013).
Have you contacted your bankruptcy attorney about the common way to handle something like this? It comes up, so he/she will be able to tell you what to do about it.
Hi Michael i was wondering how i should go about cleaning up my credit. Within the last year (due to unemployment) i fell behind on 2 BoA credit cards. I recently got my credit report and noticed BoA charged off the 2 cards. 1 totaling approx 15,000 and the other approx 8,000. I’m not sure what my next move should be. All last year i was getting calls to settle, unfortunately at that time j had very little savings so i was suggested to not pay the monthly payments to try and see if they would settle for my agreed amount. I’m struggling back and forth with the idea of claiming bankruptcy or trying to settle. And if i settle is it possible to have the “charged off” removed from my credit report?
You cannot pay the settlement and get the paid charge off removed, but you don’t need to. Your credit will bounce back from there.
For me, it is not so much about credit reporting and debt relief, It is about cost and time. If you can settle with BofA for, say 7 to 8 thousand, then compare that to chapter 7 at under 2 thousand dollars. Chapter 7 wins. Next compare how long it takes you to pull together the 8k vs the 2k.
Be sure to read that article about credit reporting and debt relief. It will help you make the decision you have.
I had a “gold loan” with Bank of America – basically an unsecured line of credit – that I was unable to keep up with the payments on. It has been sent to D&A services for collections, the balance is about $7,600. Bank of America is my current primary bank, and I also have a HELOC with them that is current and in good standing. I did receive a letter from B of A saying based on a credit review, I could not make any additional draws from the HELOC (it was maxed anyway, so a non-issue). I am not sure if D&A will be willing to discuss a settlement on the gold loan, but I wanted to have my options ready if they are.
My concern is can B of A forfeit or close my HELOC early due to a settlement/ partial payment on the other account? The HELOC is $155K and is secured by my house, so I really don’t want to mess with that. I am working on a loan with a family member, so I could maybe pay the full amount, but I really need to conserve my capital to deal with a few other debts. Thank you!
Is is possible that and creditor will evaluate your risk differently when they see you are not paying all bills on time. Settling with BofA, or paying in full, is still going to show the late pays and collection placement.
I was informed that a debt collection agency filed two lawsuits against me in hopes of being granted a default judgment against me for two BOA credit cards. I do not deny the debt–just due to unemployment for 16 months made it impossible to pay. Instead of rolling over and ignoring the summons, I replied to the court and the attorney for the debt collection agency explaining the circumstances. The judge ruled that they have 30 days to contact me to work out a settlement. I have 2 questions: 1) what happens if I don’t hear from them within 30 days and 2) the filing claims the plaintiff is Bank of America, not the debt collection agency. Can I argue that is incorrect since BOA no longer owns the debt?
If nothing happens with them contacting you to try to resolve the debt the court is not likely going to throw the case out. It will just grind on to its conclusion, which could be summary judgment.
If the filing identifies BofA as the plaintiff than it is most probable that they did not sell the debt. Most of the larger creditors either do not sell debt, or do not sell much at this time. Chase quit selling debt in 2013. Amex never really has. Discover stopped many years back.
I am seeing BofA sue more recently. What has happened to suggest to you that the debt is sold?
Perhaps I misinterpreted my credit report. I don’t understand why a huge “too big too fail” conglomerate would pay for attorneys to represent them to collect a debt that they charged/written off–especially under $10,000.. Cost of doing business. Anyway, if I don’t hear from them by the date the judge stated on the answer to the summons, the judge could still rule a summary judgment for the full amount? As I explained in my answer to the summons, I am not working, collecting widow’s benefits from social security which they cannot garnish, have no savings, the threat of ruining my already low credit score is moot, and even if they did put on a lien on my house, so what? I’m not going to be selling until after I die which I am hoping is at least for 15 years. Realistically, what can they do to me? .
There may not be anything they can do to collect from you after a judgment is entered June. But that typically does not stop the debt collection machine from running people over. There are only a couple of exceptions to this type of behavior when it is obvious someone will never be able to repay, and BofA is not one of them.
What can they do to you? Nothing much. Maybe have you respond to asset discovery requests just to be a PITA.
Thanks Mike. It may develop into who can be a bigger PITA. They are more than welcome to my Franklin Mint Wizard of Oz collection and my Thomas Kincaide painting. That’s all the “assets” I have since my husband died with no life insurance and the short sale of my property in 2008. Oh there is the 2002 car I have with 192,000. LOL
Hello,
Great wealth of information here (pun intended!). Thank you for your service in helping people. So my situation is a little tricky due to a recent death in my family. I live in NJ and unfortunately, this state is great for every possible tax or fee one can think of.
I have been out of work for almost two years so I have no working income. I currently have a $21,000 credit card debt with Bank of America (Mastercard) that has a low APR. I am not behind on payments. The monthly payments (which are approx. $305) have been made in full and on time. This is the only substantial debt I have except for a $4000 car loan (and mortgage) that is paid on time with a low rate. My credit score is now 709. It used to be above 800 (I have never had debt until job loss) but because I lost my job, I fell behind on the mortgage. The mortgage was refinanced and is now current but my credit took a hit. I am looking to settle my debt with the bank directly. I have been living off of savings and borrowed money. Fortunately, I am now receiving a monthly stipend through inheritance (my father). This income is not taxable, except the interest portion which is roughly $1900 a month. I also receive random child support payments. They are very inconsistent and can be $0 for three months and then a lump sum of $1200. Will the bank be able to go after my monthly inheritance and do I have to report this information (income) to them? Will they also be able to go after my child support? To further complicate matters, I inherited shares in an S corporation and In the next couple months, I will also receive a lump sum of inheritance (do not know amount yet). I am concerned that this lump sum will not only kick my son and I out of the state Medicaid program (insurance is ridiculously unaffordable without an employer) but that the bank can go after it. I need to get back on my feet and pay back family members that I have borrowed money from and settle some major home repairs. Therefore this will not leave a lot afterwards. I also do not know how long it will be until I find employment so I need to be very frugal. I want to handle this so there is the least amount of damage to my credit and not risk having the bank go after my inheritance or company shares. Since this inheritance is all new and not settled yet Im wondering if I should try to negotiate with the bank prior to receiving the lump sum or wait until I have funds to settle a portion of the debt?? Coincidentally, my checking account where inheritance is deposited is also with Bank of America. Any advice you can give would be much appreciated. Thank you!!
BofA will not have visibility into your finances in the way you are concerned about unless you give information to them. BofA would have to sue you, and get a judgment, before there is any risks to your cash flow. Done correctly, you can settle with them well before that, and for what I would estimate to be 8k or under.
You will not want to negotiate with BofA while current. It does not work that way. You have to fall behind, and by several months. That means a hit to your credit score, but you can bounce back from that.
I would encourage you to call in for a consult Pam. Your impression of how settling with BofA will work is a bit off. I will help you better navigate the process, or perhaps help you better understand why you would avoid doing it. You can reach me at 800-939-8357, option 2 rings to me.
Thank you. I called and left a message.
What are the basic steps to negotiate a payoff and avoid a lawsuit? I assumed I need to let the account fall behind by 2-3 months and then I would call BOA directly to negotiate a payoff amount. My guess is they will close the account when its all over but Im weary of what will happen to my other credit cards which currently have little to no balance. I need to keep some sort of credit as eventually Im going to need a car. But most importantly what are the steps to handle this?
Michael,
I was served 2 days ago to appear in Cook County Court (Chicago, IL) in 2 weeks. I’m being sued by Midland Funding LLC for credit card debt of just over $3,000 from over 3 years ago. Midland has assigned a local Attorney in this area to represent. Should I contact the Attorney representing Midland to try and settle outside of court or should I call Midland Funding directly.
At this point you want to be in touch with the attorney for Midland Funding in order to negotiate. I have dedicated page up for working through Midland Funding collections.
The deadline to reply to the Civil Case is March 25th, 2016. Under the circumstances, do I have a chance to win the case since, since the merchandise was returned to the seller. If not, then what’s the lowest amount I can negotiate or settle with Bank of America. Will I have to settle with BOA or their attorney’s Fredric Weinberg Associates.
Please advise. thank you
You will be able to settle if that ends up being the goal. How much they will take could depend on several things, one of which is how big of a collection target you look to be. I can add more feedback about this once I know if you got a response to your dispute.
Hello Michael:
Thank you for your insight and input. I did not get any offer to settle from BOA. I got a letter initially stating that my dispute was denied as I agreed for a store credit in the fine print of the puppy contract, even though I returned the puppy within the 48hours (the time required and stipulated for a return). I did not read the fine print. I had clarified with the sales person that if my spouse does not agree with keeping the puppy, then if I will be able to return the puppy. I was reassured and believed the sales person.
A year later, I got a statement indicating charge off. I stopped getting the statements after that. Now I got the civil court summons. In general, What’s the lowest amount BOA will consider to settle the amount.
Once sued, optimistic settlement amounts tend to be in the 50 percent range.
I would go after the pet shop if it were me. But I would still settle with BofA for as little as possible right now, as that is not going away, is time sensitive, and I would want to avoid a judgment on my credit reports if I could.
Should I call BOA, and ask for settlement? Do you help negotiate with BOA? and what’s involved with your services?
You will typically want to call and negotiate with the attorney suing you on behalf of Bank of America.
We have people in the network that can help you settle the debt. You would probably benefit more from some one on one coaching, which is affordable and designed to help you reach the best outcome (it’s what CRN is most known for).
Fill in the consult request form and submit that in order to move forward.
My wife and son bought a puppy dog from a puppy store in 2011. I went and returned the puppy within 48hrs. The store would only give a store credit and not issue credit back on the credit card. I filed a timely dispute with the credit card company “FIA”. FIA was bought or taken over by Bank of America and I started to get statements from Bank of America. Later in 2013 I got something in mail stating that the debt was charged off. One time I called Bank of America and was told the debt was sold to another collections company. I never got the evidence submitted by the seller to the credit card company. Now, I got Civil Court Summons that I owe over $4000. Do I have a recourse to defend the dispute further. The Plaintiff on the summons is Bank of America via Plaintiff Attorney: Fredric Weinberg Associated. Not sure If BOA sold the debt to a 3rd party company. The credit report only shows Bank of America and no other creditor or 3rd party company.
In general, Don’t people have 3 to 3 days grace period to make a decision on high ticket items. I am located in NJ. Should I file a complaint with Division of Consumer Affairs against the Puppy Store. Would appreciate any insight and feedback. Thank you
To continue with the earlier message, I forgot to add the information from the credit report:
Status: Account charged off. $3,934 written off. $616 past due as of Feb 2016.
BANK OF AMERICA
Address:
PO BOX 982238
EL PASO, TX 79998
(800) 421-2110 Account Number:
426428999844….
Address Identification Number:
0209573352
Status Details: This account is scheduled to continue on record until Dec 2020.
Credit Limit/Original Amount:
$11,500
High Balance:
$5,320
Recent Balance:
$3,934 as of 02/2016
Recent Payment:
$0
Your Statement:
Account closed at consumer’s request
Since, seller accepted and got the merchandise back, do I have a recourse against the seller to get the credit instead of store credit. (there is nothing else in the store that I can buy for that amount other then pets, and I have dog and cat allergies and cannot have a pet inside the house).
What, if any, was the response you received from FIA/BofA about the disputed amount? Do you have a copy of anything sent in writing, or accurate notes?
Hi,
Five years ago Bank of America charged off almost all of my equity line but left a small unpaid balance in my account which is still there today. If I do nothing can I have the account removed from my credit report in another 2 years, or does the small unpaid balance mean that the account is still active and therefore will remain on my credit report until I pay off the small remaining amount?
Your help is appreciated!
Bank of America negative credit reporting has up to a 7.5 year shelf life. They cannot keep an unpaid balance on their longer than that. If there is some error allowing BofA to stay on your reports longer than is allowed you can dispute it, and these days have more confidence in the correct outcome.
Hi Michael,
I have two mortgages with Bank of America (B of A). The second mortgage is a line of credit. Due to the high interest rate, I attempted to do a modification on two occasions and was denied both times. I fell behind on the second mortgage after 8 years of never being late. B of A decided to write off the second mortgage valued at 40K without notifying me in writing. I called to discuss some sort of payment plan and was told the second mortgage was being placed in collections and would be written off as bad debt. I informed the agent that I was not aware of this decision and what were my options. She said she would get back to me and called the next day with the following–B of A would allow me to make monthly payments less than what I was paying and I would have no interest. I would not receive statements and after six months I would have to call to renew the payment plan–automatic deductions from my checking account. The loan no longer shows on my B of A mortgage statement but does reflect on my credit report as being charged off as bad debt but in payment plan.
I am curious as to whether or not if I could sell the property and if I would have to pay off both the first and second mortgage if the second is “written off” and in a voluntary payment plan. My credit score was seriously impacted and all I was trying to do was to reduce my interest rate / receive a modification.
You will likely have to have paid BofA on both in order to pass clear title to the buyer when you sell.
This would be a great time to settle the second mortgage with BofA in order to save money. The credit damage is already done. Call me to talk over that strategy if you like at 800-939-8357, option 2 rings to me.
Hi MIchael –
I love your blog and I have been following it for some time. It is very informative!
I have a situation I wanted to ask you about. I have an account with BOA that used to be called MBNA or Gold Option. In 2009 I lost my my job and had difficulty keeping up with this payment. I believe the payment back then was like $480. The original loan was $16,000, but I believe the balance then was around $12,000. They worked with me to knock the payment down to $370, but they would not budge beyond that because it was considered “gold option” and they had no ability to reduce it any further. It was a strange deal.
I kept up with the $370 payments for a while, but due to a reduction in income. I fell behind again on the payments, where it got to 120 day late status. At that point I was able to start making payments again, but I could never get the payments past the 120 day late status stage.. I would get calls every month from BOA asking about whether I was going to pay because it was going to be charged off. I would always make the payment before the due date to keep it from charging off. My balance at this point after consistent payments was $2,000 (November 2015).
In November 2015 I got multiple calls from BOA asking about what my intention was with this debt. I figured that they were calls like all of the other months because it was still at the 120 day late stage and I would just pay it before the drop date.. Well I went online in November to make my payment like usual and I find out that the account is no longer listed online and was charged off!! I don’t know what changed from my making consistent payments to it being charged off!
I did check my credit report and the charge off is now showing out there. Also, I got a collection call today from a “Mercantile Adjustment Bureau”. I have not received anything in writing from them and have never heard of them. In fact, I have not seen anything at all in the mail regarding this charge off.
It is so frustrating because I had every intention of paying this debt off. I had just paid off two other BOA accounts that are now with zero balances. This was the next account I was attacking and I was so close to paying it off.
My questions are:
– Do you know anything about Mercantile Adjustment Bureau? Is this part of BOA?
– Do you think I should call BOA and work out a payment arrangement with them?
– Is there any way to get this charge off removed from my account if I pay it off?
I want to pay it off like I said. I just wish it hadn’t gone to charge off status before this happened. I am planning to buy a car, but not for a year or so. No other large purchases are planned. I do have other credit cards that are in good status. But, my credit report has definitely taken a hit since 2009.
I appreciate your assistance!! Your blog is so informative!
Alyssa
Mercantile Adjustment Bureau is a third party debt collection agency. They are not part of BofA, but working to collect for the bank.
I would call Mercantile Adjustment and work out any payment arrangement with them. You could call BofA, but they will likely just forward you to Mercantile.
There really is no way to “un-ring” the charge off bell. That is one of the reasons I often recommend settling charged off debts for as little as possible. The credit damage is already there. And in your case, it sounds like BofA was showing on your credit reports as 120 late pay in perpetuity.
I am shocked your account was not charged off years ago.
If it were me, I would try to negotiate the best settlement with Mercantile Adjustment, get the zero balance owed reported on my credit reports from BofA, and move on.
Thanks so much Michael!
I talked to someone at BOA in house collections yesterday and they were actually surprised this charged off because I was keeping up with the $370 payments for a long time. But, somehow I missed the November payment before the deadline and it charged off. I was never notified that it was about to be charged off. The BOA rep said that I had been making payments consistently and he thought maybe they could work out an arrangement with me. He talked to his manager and they said they would be willing to take the account back from Mercantile and set up a payment arrangement through them. I still have never received any notice of it actually being charged off from either BOA or Mercantile. But, I am getting a lot of calls from Mercantile.
The guy I spoke with at BOA in house collections said I could set up automatic payments of $370 through them like I was doing and it would be paid off in 6 months. He then asked me for my bank information and that is when I got nervous and I told them I would call them back. They said they would send me something in writing, but could only send a letter once I set up my bank account with them. Something just didn’t feel right about it.
Is there any benefit to working with in house BOA versus Mercantile at this point? I have every intention of paying this off. I checked my credit report today and I don’t see Mercantile showing on my credit report. I have received nothing from BOA or Mercantile in writing.
Thanks so much for your help!
Given the opportunity I usually prefer working with the original creditor in a full pay situation. I would go ahead with BofA, and do be sure to get any agreement from them in writing.
Hi Michael, I have a credit card with Bank of America that was charged off (in 2013) because of non payment. I want to clean up my credit report and pay off the credit card. According to my credit report, I do not see that the account was sold off to a collection agency. It is still with BofA showing a balance of $4500.00. I can’t afford to pay this amount. What is the best way to deal with this? If I “settle for a lesser amount” will this hurt my credit? I can pay $2,200.00 to settle this once and for all. I live in the State of CT, I believe the SOL is 6 years here.
Thank you
With a debt this old, your credit situation can begin to improve by resolving it, rather than letting it go unpaid. I like your chances of settling with BofA for less than half of what is owed today.
Have you received any recent collection notices or calls? I am wondering if BofA has your account placed (not sold) with a collection agency, or if you will need to call FIA card services to negotiate your settlement.
I would like to pay (4) 10 year old time barred debts in full. I live in the State of Maryland. How do I complete this task without getting extra fees and interest added on to th pricipal balance. What information do I need to have in writing before the payment is submitted. 2 are with banks that assumed the debt when they purchased other banks, one is an apartment management company and one is with a bank that hired an attorney to collect 10 years ago. Thank you
Call me for a consult Jay. You are basically looking at settling even though you want to pay them off in full. When you only want to pay the balance owed at the time you stopped making regular minimum payments it often means negotiating away the fees and penalties.
You can reach me at 800-9839-8357, press option 2.
I defaulted on my credit cards in 2010 when I went through my separation.. All credit cards were in my name so my ex was not required to pay on any of them. Two of them had a cancellation of debt (1099-C) filed with the IRS here in California. I got the letter from the IRS dated 5-4-2015 and they adjusted my 2013 tax return and had me claim this credit card debt as income and had me pay taxes on it. I paid the IRS 7-20-15 and thought I was done. Now I am trying to close on purchasing a home and I am being told Fannie Mae is requiring me to pay this credit card (through Chase) off at closing. My question is…. IF is was filed with the IRS and I had to claim it as income why would I have to pay it off. The cancellation of debt shows that they cancelled the debt and in turn I claimed it as income. Chase said they will not report it to my credit burrows as a $0 balance because it still is not paid. This is were I am confused. How is it still owed (according to Fannie Mae) if they (Chase bank) so to speak wrote it off. I don’t see how I can pay a card off that the IRS made me claim as income? To me its like double dipping.
If I do pay the card off (as Fannie Mae is requiring) how or what do I do to notify the IRS that I paid it off so they can adjust my taxes?
Your situation is a catch 22 people find themselves in when Chase proactively forgives debts that they no longer intend to try and collect on.
You can settle or pay Chase the balances owed; get the credit reports updated shortly after to show the balances are resolved; and amend your tax filing if within the last three years.
Talk to a tax professional before you move forward.
What are the balances owed on all of the accounts at issue?
She will have trouble raising money since her earning power is now reduced. Another issue is taxes on the discharged amount. She will have trouble raising money to pay the additional taxes as well.
How old is she? What can she afford to pay that is more than $50?
You generally have to meet some payment criteria set by the loan owner or servicer. It sounds like she might be on the pay forever plan. That is something I like to help people avoid, but it is not always possible.
Earlier this year, a collection agency was handling a private education loan account on behalf of Bank of America. My mother defaulted on this loan 3 years ago, when she lost her job. This collection agency contacted my mother and she responded in the form of a debt validation letter. After the collection agency confirmed the amount, which matched with her records, my mother sent another letter with her conditions of the payment arrangement and began a $50.00 a month remittance, since her earning power is much less than 3 years ago and it is all that she can afford for now. Well, the collection agency was insisting on having her agree to a temporary payment plan, with regular reviews to seek monthly increases or full payment of the remaining amount due. She found their terms to be inflexible and rejected their temporary payment plan several times, while continuing the $50.00 a month remittance. This went on for months, until today, when my mother received a returned check from the collection agency, along with a note that said:
“The enclosed payment(s) is being returned to you for the following reason – Close account – Contact BOA (Bank of America)”
We’re not sure what to make of this note. Do you believe the collection agency ceased efforts due to my mother’s refusal to sign the temporary payment plan agreement?
It sounds like BofA pulled the account back from the collector, and probably because the collector failed to collect consistent with expectations.
There are options to consider with private student loans with BofA, such as negotiating a lower pay off amount. Is it possible to raise cash in order to settle with BofA?
I have a question pertaining to a Bank of America Charge off on my credit reports. The account was charged off in 2009. In 2012 I was served papers by Blithe and Gaines suing me for the money owed to BOA. In order to avoid a judgement, I hired a lawyer and settled for a lump sum payment less than amount owed and the case was dismissed. My credit reports note paid charge off, settled for less amount. My question is. In May Bank of America as well as other credit card companies were taken to court regarding reporting old charge offs after bankruptcy. The agreement was that these companies remove old charge offs from consumers credit reports. Although I did not file bankruptcy, BOA has not removed this account. This is from the article: Bank of America promised to go further, agreeing to fundamentally change the way the bank reports all the stale debts that are sold to financial firms. For all credit-card debts sold since May 2007, court records show, the bank will remove any marks on consumers’ credit reports. That way, a lawyer said, “should a previously sold credit card account go through a bankruptcy discharge,” the mark will already be gone. So my question is, why hasn’t my charge off been removed? Should I contact BOA and ask them directly or do I file a dispute with credit reporting? Do I include the article? Thanks for reading!
Who was the named plaintiff in the lawsuit against you?
It appears to me that BofA never sold your account (not all debts are sold). That means you do not fit either criteria for Bank of America to proactively drop the paid collection from your credit reports.
If the named plaintiff is different than Bank of America post who that was and lets go from there.
Hi Michael-
I live in California and have 2 BofA credit cards that are on my credit report that have a Payment Status Details as a “Charge-off” on 9/1/2012. However, both show the status as Late with a current balance, One card at $8,483.00 and the other at $8,314.00. Both show a Past Due amount as well.
I fell on some hard times with medical issues and settled some other credit cards that show on my credit report as Legally Paid in full for less than the full balance and the Payment Status on those cards show them as Paid.
The thing is, with the other credit cards, I received phone calls from collectors, letters from collectors etc…so I settled with them. I have never once received a call or letter from BofA on those two accounts. Honestly, with everything that was going on at the time those two accounts got pushed to the back of my mind from not hearing anything from them. Until recently, I checked my credit report and saw these two accounts are showing as Late. I have heard with SOL if I don’t do anything they would go away, but if it’s too good to be true, it usually is.
Should I call BofA and see who they sold them to and reach out to the collectors or continue to wait and hear something from whomever bought them? It’s sorta odd that no one has contacted me for payment. I don’t want this to linger on my credit report and drag my score down. But if there is a Charge off and no one is trying to collect perhaps the account is lost in the system and will go away?
Thank you for any guidance you may have.
It sounds like Bank of America did not sell your accounts. If they had there would be a zero balance being reported as owed to BofA (which is accurate because they would have no legal right to the debt once sold).
Debts can just fall off the radar. And because of that, I am not sure I would do anything right now if I were you. If the accounts show a September 2012 charge off date that means you likely stopped paying around February/March 2012. That puts the SOL to legitimately sue in California 6 months out (4 years from when you stopped paying).
Having said that, if you have credit and financing goals in the next 3 to 4 years, those unpaid BofA collections could get in your way (especially a home loan). If that is the case, and you have some resources to work with, it could be a good idea to negotiate lump sum payoff settlements on the BofA accounts now and remove all doubt or risk that you would be sued in the 6 months left for that to happen.
What are you inclined to do?
Thank you for your quick reply! Given the dollar amounts I am dealing with in being delinquent, what is the likelihood I could be sued?
I honestly don’t remember when I stopped paying the credit cards but if your guess of Feb/March 2012 is a good one based on the charge off date of 9/2012 then, I feel I am inclined to wait out the 6 remaining months of the SOL, save some money, then reach out in say June/July 2016 to BofA and try a settlement amount with this debt so that it could be off my credit report in 4-7 years.
How long does it normally take for negative things such as this to be removed from a credit report?
The only big purchase I feel I would be making in the next couple of years would be a new automobile. I’m not looking to buy a home loan at this time. I really just want my score to go back up to the low 800’s where it was before all this began.
Thank you! 🙂
The credit report time frame is typically 7 years from that charge off date bank of America is reporting. The accounts will drop off your credit report whether you settle them or do nothing. But the credit reporting through September 2019 will hold you back from certain goals.
Given how little you have heard from anyone about the debts I do not find it all that high a risk you are sued, but that does not mean you won’t be. Have you moved in the time since you were paying the account and today? Changed phone numbers?
Hello I received a letter in the mail from Jefferson Capital Systems, LLC for Bank of America, NA Amt of Debt:1008.02 Charge Off:6-24-05. They are offering me The Payment Rewards Program of 504.00 within 18months and qualify for a MasterCard. I need to know what this company is and my understanding of making some type of payment to the acct will re-trigger my debt 7years again. This B0fA debt was in 2005 which makes it Out Of Statute. Can you help me in what I need to do to get this resolve?
If it were me I would send Jefferson Capital Systems a Cease Communication letter. But only if I am certain the SOL to be sued is passed. The fact that BofA is no longer showing on your credit reports is a good indicator that the debt is more than 7 years old.
I got a Bank of America credit card debt ($4438) that was spend to Frederick J. Hanna & Associates, PC to sue me. I was not serve but was delivered to my parents place where I live. I’m general not home and my parents took the document. I thought it had to be send to me and not family member. I do owe the money and I read that I could try to settle this out of court for half the price. I also read bad practice this FJHA group does and was sue for it in 2014. I would like to know whats my best choice to get rid of this and pay as little as I can. I also have some medical bills that I’m going to be facing the next few years that are over $12000.
The paper that was sent to me abut what I owe is right but the dates when it expired does not look right. It should be in 2011 or 2012 and not 2014 when the credit card was closed with bank of america. I’m located in Georgia and know it’s in the 6 years of suing me.
Should I talk to a debt relief person or do it my own and will this FJHA will settle for less because it looks like they don’t and handle over 100,000 case in the last 5 years? Thank you.
When was it that the lawsuit was handed to your folks? If you were to negotiate the settlement, do you have the money now to pay the agreement in one lump sum?
Sometimes it is good to file an answer to the lawsuit even if your goal is to settle the BofA debt with Hanna and Associates. It can often help achieve a better settlement result, and also buy some time to come up with money you need to pay the settlement you reach in a single payment.
There is much to say about Hanna and Associates collection practices and history, they are currently being sued by the CFPB. But none of the histrionics are necessarily going to help you.
Post answers to my questions and I can offer more feedback.
The lawsuit of file was “sworn and subscribed before me” June x but was not filed by the office until June x. I was served(parents) a few days later. I do have enough money to pay a lump some to get rid of the debt.
I didn’t know if I should go online to answer the lawsuit from the court office which it states on the document I got in my hand. Should I talk to the lawyer who filed it and get a settlement?
I have a page up dedicated to settling with collection attorneys. Read through that article and the many comment exchanges to get a feel for the process before you attempt to call Hanna and Associates to negotiate the pay off amount (you will be calling the attorney to settle, and not Bank of America or the court).
Can you verify for me that the named plaintiff on your lawsuit is BofA? This old of an unpaid credit card debt will often be sold off to debt buyers like Cach LLC and others. Is there any other company name on the court documents besides BofA and Frederick J Hanna and Associates?
It says that, “you are hereby notified that BANK OF AMERICAN, N.A. has made and filed a claim and is asking for judgment against you in the sum of $xxxxx.xx plus court costs, as shown by the foregoing statement.
S. Louis Schiappa is the Attorney for Plaintiff which works for Frederick J. Hanna and Associate PC.
Okay, thanks for the clarity. Whether an original creditor or debt buyer is suing can sometimes alter my feedback and targets for the percentage of savings that are realistic.
Can you delete some of my info please if thats true?
I think I understand what you are concerned about and asking for. I edited some specific identifiers I would use if I was a debt collector.
Just so you know, I have always found the Hanna firm fairly easy to deal with when negotiating settlements for clients. I am not aware of them focusing any attention on this site, and while I would love for BofA to give a rip about my message and feedback to their cardholders, I can tell you for certain that they do not.
Business Credit Card Debt with Bank of America — In May, I received a letter from Bank of America offering an opportunity to settle a business credit card debt for 50% of the outstanding balance (last payment was December 2014). A representative on a recent phone conversation (who was attempting to collect the minimum about past due) said that the creditor intends to charge off the debt at the end of June unless a payment is made. (A separate May letter also states that the debt could be charged off in June).
The debt is in the business name but personally secured.
The goal is to settle the debt. The concern: Currently, the debt has not appeared on my personal credit report. What are the chances of keeping this off my personal credit report …. (1) if settled? … (2) if charged off?
Is there a place where the delinquent business debt be reported?
Thank you!
Dunn and Bradstreet is a very common place to have business debt show up.
I have seen some BofA business debts like yours get settled prior to charge off and never show up on the personal credit reports. I have seen the opposite too.
I think your best shot of avoiding it is settling prior to charge off. Are you going to have enough to fund it?
Ok, thanks so much for your reply. I’ll have to research how to view the D&B file. We’re a very small start-up operation …
I do have enough funds to settle.
Thank you!
If you run in to any trouble and need help let me know.
Credit card debt collections with Bank of America. Had a credit Card with Huntington National Bank in Columbus, Ohio that I opened in 11/06. Had a clear history with zero issues. Huntington decided to stop servicing credit cards and it was taken over by B of A. around 2011 if I recall
At the time I had a 7.99% rate, then took a massive pay cut (over 60%) after the economic crash in ”08/09. Then, my mom (who lived 100 miles south) fell and broke her neck in ’10, forcing me to work a part time schedule given the geographic difference and $4.50/gallon gas prices.
She then passed away in ’12 leaving me with the remaining balance on her mortgage loan and utility bills. Ultimately could not keep up with the payments and the interest rates had climbed to 27% by ’13. At that time I could no longer afford to pay anything. Since then I have re-employed, climbed back out of debt and wish to attempt to settle my outstanding debts, this being the most troubling one.
My credit report shows a past due of $921 and a high balance of $3844. I can pay the $921 past due in full without problem.
—1) What should I request or accept as a settlement offer?
—2) What is the likelihood of having this removed from my credit report?
The settlement amount you want to target in your negotiations can vary depending on whether BofA is still the owner of the debt or not. Generally speaking I would realistically target 40% of the balance owed today. But there are reasons to target much better savings.
Getting Bank of America to remove the derogatory from your credit report is not going to happen. But if you get the account to show that there is a zero balance owed, your credit will recover.
My credit report shows B of A reporting it. Really unfortunate because it is the only big negative on my report.
If it is settled and shows zero balance – and I can pay a $1000-1500 lump sum – how much would my scores jump an how quickly after reported?
And along those lines, what is VantageScore 3.0 and how do the three bureaus view this?
Thanks for the advice!
The Vantage score is not in wide use. The three credit bureaus view it like it’s their baby, as it is a joint effort from them. The better question would be when you submit an application for financing to ask which score is used, and which version. Someone in the know may tell you.
Your score may not jump much in the immediate, or even at all, from a recently resolved collection account. There are scoring models that would drop your score a small amount for a couple months from resolving an unpaid debt.
Is there a specific financial goal you are aiming to accomplish in the near future, like a home loan?
Possibly an auto loan. Have been approved, but would like a much lower rate. Two loan officers (one I know personally) told me the B of A and the Pinnacle/Chase acct to a lesser extent were really hurting me.
Quick follow up on VantageScore; do the three bureaus factor it into their credit score since they basically created it?
Read that paid accounts in collections will stay on your report, but will not be factored into your score. Is that true?
Both FICO and Vantage have developed new credit scoring models that do not factor paid collections like before. They are not in wide use. It will take several years to get to the point where older scoring models are phased out.
Hey,
I contacted a debtor about a BOA line of credit that was charged off in December 2012. I wrote them a letter asking if they would prove that the debt is mine. Two weeks later, I get a big envelope with the old statements for the account. I then write a certified letter asking if they would accept 1500 USD in lieu of the 5500 USD balance. A month later they just send me a generic debt collection letter. They did not at all address my offer or make a counteroffer. What gives?
I really want to be done with them, and I don’t have/don’t want to pay the full 5500 USD (BOA screwed me over big time with those loan terms and was not helpful when I tried to make payment arrangements for the loan— they’ve gotten enough money from me).
the debtor is FMA Alliance LTD.
Should I call and try to make an arrangement that way (I am concerned about debt collector tactics and don’t want anything that I can’t have a paper trail for)? Or should I sent another certified letter?
I want to be done with this soon because I want to buy a house next year or early the year after. Leaving the charge-off on their with the debt left unsettled would be bad, right?
Thanks
You are going to need to resolve these debts if you want to get a home loan.
Writing in to settle debts with debt collectors, or even Bank of America, is not as effective as calling in to negotiate the pay off, and then getting the agreement in writing.
Call FMA Alliance and negotiate the lump sum pay off. Generally speaking, your target of $1,500.00 is possible, but be prepared to pay a little more to reach your goal. Settlement targets with debt collectors like FMA Alliance can very if there are unique situations. Post an update if you are unable to strike anything close to the deal you can afford.
Get everything you negotiate in writing from FMA Alliance before you remit payment on the agreement.
So i have tried calling FMA Alliance, but they claim to not be able to find me in their system. The reps are usually insistent on using my social security number, but I refuse to give that information to a debt collector and over the phone no less.
None of their correspondence with me has the full account number that they have now assigned to the account and the reference number from their certification correspondence is “too long” to be an actual reference number according to the reps. It’s frustrating and I am not sure what to do. Is it normal for debt collectors to take such personal information over the phone?
My question is this, the account has been charged off and the only negative line on my credit report is the charge-off from BOA almost 3 years ago. FMA is not showing up on my report (yet).
Things stay the way they are, could this account keep me from being able to get a home loan some time early next year?
It is completely normal for debt collectors to want to verify who you are using private information. If they are legitimately collecting on the debt, they have it all anyway, just so you know. They are verifying they are talking to the right person.
Call BofA directly and verify who they have the account out with for collection.
Yes, this account being unresolved will likely prevent you getting the home loan next year.
I wanted to say thanks!
between some old records and the little info I had from FIA ( a contact number at BOA) I was able to find out that them that BOA had actually taken the account back.
Ended up paying more than I had hoped, but was able to settle the account for 50% of the 5700 some odd dollars. Now that that’s done I am hoping to apply for a secured card with a 1000 dollar limit from the local credit union two months from now.
And early next year, I think I will be in good enough shape to start house hunting (assuming my scores rise from the low usage on the new credit card and paying off student loans helps in the mortgage application process).
This website has been a life-line.
My wife and I entered a debt consolidation program in Dec 2011 at which point we, as instructed, stopped making payments on all credit cards. This included 2 BoA cards combined at $11,000. My wife has just been served papers on one of these accounts and is quite unnerved.
Would BoA ever have sold this debt? Can I challenge “chain of custody” on the account? Can I try to settle for a fraction of the cost? Is there anything I can do to reach the 4 year SOL in December?
Any advice is greatly appreciated
Who did you sign up with for debt consolidation?
Who is the named plaintiff on the summons she was served with?
Does BofA show negative, but with a zero balance owed on your credit reports?
If the debt was sold, you can raise different defenses. Chain of title may/may not serve a strategic purpose.
You can often settle these debts for a savings, but what is it you mean by a fraction? How much money can you pull together? Where is the money you paid to the debt consolidation company for 4 years?
You cannot do anything to get to the SOL now.
We used Innovative Law Firm.
My wife is the named Plantiff.
It shows closed, collection/charge off on the credit report. ($5692) (she had two BoA accounts in her name)
We can probably pull together $1500-$2000.
The debt consolidation has successfully settled on the 15,000 of the remaining 17000 of debt and are contacting the last card presently.
If you are on the last account with your debt consolidation company, and are being sued, but are working with a law firm yourself, I would stick this out with them. Be sure to let them know you can pull together the 2k.
I do want to clarify that your BofA accounts are with the debt consolidation company? I could read your comments to mean that this account your wife is being sued for was not part of it.
Your wife would be the defendant in the lawsuit. Who is named as the plaintiff suing her? I am looking for a name other than BofA or FIA, which would mean a debt buyer is suing.
Both BoA accounts were included in the debt consolidation program. I will be calling them (debt consolidation ) this afternoon I was just concerned as to wether or not this was beyond their services. Also, should I be concerned about an impending lawsuit for the second BoA account?
BoA NA is the Plantiff.
Thanks for the clarity. Yes, you should be concerned about the BofA lawsuit. You need to pull together as much money as you can to settle with them.
Post an update with how you progress with the debt consolidation firm.
Hi Michael, thanks for the advice thus far.
I had a credit card issued from BofA in 2008-2009 (while in college) that I did not pay off in the amount of $437. It has been on my credit report since and states that it is in collection still to this day. The date opened states 9/28/2012, which I can only assume is when it was sold to the collections agency, is that correct?
My question is, should I pursue paying this debt with the collections agency? I worry bc I know that admitting to the debt opens the possibility of them refreshing the 7 yr clock. I am willing to pay the debt in full, but want to make sure that the derogatory marks come off my credit score ASAP if I do so. If I ought to pay this in full, what steps do I need to take in order to make sure both the collection agency and the reporting agencies recognize this debt as paid in full and expunged from my reports? Thank you thank you!
I will be better able to target my feedback if I know the following:
What state are you in?
When did you last make a payment on this account?
Is BofA showing on your credit report with a balance due?
Who is the collection agency, and do they appear on your credit report, and if so, what balance do they show?
My husband and i live in Louisiana and we defaulted on a bank of america credit card exactly 1 year ago and the amount is now 18,800.Northstar sent us a couple of demand letters but today we received a demand letter from an attorneys office licensed in our state called Couch, Conville & Blitt. Now we are worried that already our account is placed with an attorney for a suit. The letter does not state anything about legal action. Just a regular collection demand letter saying they represent bank of america. Michael in your opinion does it look like to you they will be considering sueing soon? Or is this a scare tactic? What is the possibility of setting up a payment plan with them before a suit? We cannot afford a lump sum settlement payment. Would an attorney help us to negotiate a reduced balance with a payment plan we could afford?
I would say the risk you could be sued have increased dramatically.
You can call and see if they will agree to a monthly payment you can afford. Collection attorneys are not just about getting paid, but also securing their clients ability to collect. That means that are predisposed to want to get the judgment first sometimes.
You do not need an attorney for this type of thing, but it does help to have someone in your corner that knows the ropes.
Can you come up with even 25 percent of the balance owed?
Hi Michael! Currently I live in NY, but I opened the account while in college in MA, but I had and still do have a bank and savings account with BofA, both of which were opened in Texas. I have not paid anything since 4/1/2010. BofA shows up as Collection/Charge off but with a $0 balance. The collection agency is CAVALRY PORTFOLIO SERVICE. They show a balance of $437. I cant thank you enough for your help! These remarks at the bottom of my Trans Union report: Remarks Charged off as bad debt
Purchased by another lender
And at the bottom of my Equifax it is stated as: Charged off account.
Thanks. Cavalry Portfolio bought your unpaid credit card account from Bank of America. There is nothing you can do about the way BofA is showing on your credit reports. The charge off should not stay on your credit report for more than 7.5 years from your first missed payments, which sounds like you would start counting forward from May 1st of 2010.
Cavalry Portfolio reporting you can impact, but likely only by resolving the debt with them, whether you pay in full or negotiate a lower pay off with the debt collector, the end result will be your credit reports are updated to show a zero amount owed to Cavalry. That will be an improvement, but it is unlikely the collection will be removed voluntarily by Cavalry. The Cavalry Portfolio Services entry on your credit reports should drop off at the same time as BofA’s entry.
Calling to pay does not reage the credit reporting limits at all.
It appears like Cavalry has a year or so left on the SOL to sue you in New York. Calling to talk about resolving the debt will not necessarily reset the SOL in NY, where writing to Calvary acknowledging the debt may. If your goal is to take care of this account, the SOL is not going to matter, as settling with the collector should put all of those concerns behind you.
What are your credit and finance goals in the next 2 or so years?
Thank you again for all your advice. Do I understand correctly, that if I am to pay the entire debt to Cavalry ($437), the collections balance will reflect $0 owed, but will remain on my reports as a bad mark? You mentioned that the collection is unlikely to be removed by Cavalry voluntarily, is something I can do beyond asking them to remove it? One more question: If I do call to pay the amount in full, should I request something in writing that the concludes our business and that the debt is no longer valid? My goals for the future are to have a clean slate so as to eventually purchase a home, be approved for credit cards with more perks (the two I have now offer very little in the way of benefits, but I do carry a zero balance and pay them 2x a month).
Hi Michael, is there anything I can request from Cavalry stating that they will remove the negative remarks from credit report upon payment of the debt? Will they voluntarily stop reporting it as soon as I pay?
Thank you!
Not really. Calvary is not generally going to agree to that in writing or verbally. You can expect them to update your credit reports that the debt is resolved and a zero balance due. They are generally good about that without having to be reminded.
You can try to dispute Calvary off your credit reports after all is said and done, and maybe they will not respond to the CRA investigation (now that you paid they may not be as concerned), which could get this deleted. But I would in no way have an expectation this will succeed.
Thank you Michael. Just as a curiosity, what is their reasoning for not deleting the negative information from an individuals credit report after debt has been paid? You have been most helpful by the way, thanks again!
The sanctity of the finance and lending markets.
And I say that only partially tongue in cheek.
But more to the point about debt collectors like Cavalry, they need the information and tools offered by the bureaus to go about their debt collecting. The credit bureaus frown on deletion of accurate, current, and complete credit details. The value of the relationship is not worth the money you could pay Cavalry to delete what they share with the bureaus.
Michael, this is a BOA mortgage question. BOA has been trying to foreclose on my home since 2012. I tried to short sale and deed in lieu and was denied on both requests. So at the beginning of 2015, I learned BOA sold my mortgage (even though it’s in the foreclosure process) to Rushmore Financial. Yesterday I get a letter from an attorney saying they are attempting to collect a debt of $110,985. My house has not been foreclosed on as of yet. How can they skip over the foreclosure process and send my account straight to collections? And also should I dispute this or just file for bankruptcy? Thank you for any advice I am very confused.
Are you or anyone else still living in the home?
What state is this in?
I’m in great standings with my auto loans, house and current credit cards. My house was sold from BOA to Green Tree 2-Years ago which probably hurt my length of credit paying on my house. I’m currently working on paying extra to car loans to clear those off in the next couple of years.
I would send the disputes if it were me.
Hi.
Have a question pertaining to Bank of America. Back in 2011 I was, 2 going on 3-months late and BOA put me on a payment plan and closed my 2-accounts. I recently looked at my credit report and after they closed the accounts, lets say in July 2011 they reported me late until the accounts were up to date,” payment wise” in January 2012. I paid one account off one account 6-months ago and the other last month in full. Is there a chance of getting the reflected late charges after the account closure off my credit report or am I stuck with them? If so, how bad do they hurt my score? Both accounts are showing 9-late payments each, totaling 18. Mainly in 2011. I did contact them about the issue and they said to send complaints to the credit bureau’s. Will complaint’s work in my case?
Thanks!!
So that your credit cards do not show late pays in perpetuity, BofA will sometimes reage accounts once you agree to a payment plan, and then make those newly agreed upon payments on time for several months in a row. It does not sound like they reaged yours.
Late pays on paid accounts from 4 years ago are not harming your credit much, if any, at this point.
What are your credit scores currently (if you know)?
Are there any other negatives on your credit, and if so, what are they from and how old?
My feedback about sending in disputes to the credit bureaus will vary depending on your answers.
No other negatives on my account accept for back then. I’m around 650 give or take. Do the late payments fall off 7-years from the start of them or at the end of them?
I also couldn’t believe that they recommended me to just file complaints with the bureau’s. I’m trying to get my credit in good standings in hopes of selling my current home and getting a bigger home. Anything that I can do to help is what I’m shooting for.
Thanks
Just also checked and my Discover Card Account shows a FICO score of 700 as of today. Not sure how accurate that is.
I think Discover gives you the real time score.
The credit score your lenders see may be different than the one you see. Score modeling will vary from one loan product to another. When you go to apply for a mortgage, many lenders will use a tri-merge report, and the scoring will not necessarily mimic what you would see with the FICO Discover has for you at that same time.
700 is more like what I would expect with what you have shared.
The late pays will drop after 7 years from the date it was late, so from the start of them, and on a rolling basis.
I could make an argument that you should dispute the late pays Bank of America is reporting to your credit. The months you were late were fewer than what is being reported.
I might send a written dispute that states you were never late with Bank of America like is being reported (you weren’t). See if it comes off. If you do send a dispute, send it in writing and use certified mail return receipt.
You are not in great mortgage shape today with that 650 credit score, but would qualify for FHA underwriting.
A few late pays from 4 years ago being the only negatives, what are the positive items showing on your credit?
Hello:
I have a Bank of America credit card that was charged-off in July of 2010 due to a job loss. The balance at charge-off was $30,000. My account was placed with Gatestone and I have been making $200.00 monthly payments since August of 2010. The current balance is $20,000. I have less income than previously and have little money left over at the end of the month for a settlement. I have decided to stop making payments and set aside the $200.00 for a settlement. At this point in time, I feel that this is my only option to resolve this.
Do you recommend stopping payments at this point in time?
In your experience, how long do I have until my account is turned over to an attorney? I am hoping to have enough funds to settle the account before the end of the year.
What is a targeted settlement amount?
Will 4 1/2 years for payments be taken into account by Gatestone at the time of settlement?
Not making payments is a difficult decision for me. I am trying not to panic. At what point should I take further action? I do not want this to turn into a court case.
Thank you for your assistance.
A realistic target for settling with Gatestone would be 30 to 40 percent. You may not be dealing with them 8 months from now when you are ready to fund a settlement, so that target can change.
Those years of making monthly payments to Gatestone will not come into play when you negotiate the settlement amount.
If you cannot keep up the payments, it just is what it is. It would be good if you can raise the money to settle as soon as possible.
Do you have other collection accounts to contend with other than with Bank of America?
I can keep up with payments, but do not have the extra funds to set aside for a settlement. Should I ask if I can lower my monthly payments and explain to Gatestone what I am trying to do?
I have no other collection accounts.
If I explained anything to a collection agency like Gatestone, it would be that I am unable to continue with the payment arrangement I have. I would not bring up settlement until I am close to being able to follow through with funding one.
Hello I have another question,
I disputed a line-item on my credit report at Transunion and Equifax. Transunion confirmed/reinstated the debt on my profile. Equifax after 30 days removed it from my report. Then, Transunion followed suit…
Can this debtor go back and put the same claims for hte same account on my credit report? Or am I free and clear?
What was the debt about?
Who was reporting?
How old is the debt?
They were for fees the rental company assessed well after I had moved out last summer. Showed up on my report in November, I thought about paying it just to get it off as I plan to buy a house in March, but then I thought I would give disputing it a shot.
It’s around $650 and from Fair Collections & Outsourcing. It’s no longer showing up, but I know these things are sometimes sold to other debtors who then put it on the report at a later date (been dealing with that for a bogus phone debt that (is not mine) I disputed and was removed last year, sold to someone else, now showing up again so I have to dispute it all over)
It can happen, as you already know, and not necessarily as a result of the account being sold or transferred to another debt collector. Keep an eye out for the account to reappear on your credit. It it turns up out of the blue before your loan closes, you will have a business decision to make about whether it is a good use of funds to pay it in order to close and get the loan funded.
What are your credit scores today?
I am not sure, but according to credit Karma and Sesame, I am probably in the mid 600s range. I plan on having that improve as I continue to pay down debts. Am looking for an FHA or similar type mortgage loan and have a solid salary.
It sounds like you will reach your goal. Just keep some powder dry (money available) in case you need to pay a collection account off last minute in order to push the loan through.
I have a situation similar to many of the other people on this blog, but would appreciate your input (thanks in advance, this blog is a lifesaver!).
I am planning on buying a home between next March and June. My student loans are almost all paid. But I don’t have much credit anymore (only a 300 dollar BOA cc).
My overall credit score is between 605 and 620…. I have three negative marks on my report:
1. Verizon bill but I am having this investigated, because I don’t believe it’s mine
2. A BOA line of credit that was charged off three years ago, so it’s passed statute of limitations. I can’t wait till it falls off my report because I need to buy a home next year. I don’t have a collections line item for this loan, but it does say account closed as chargeoff and shows that I was 180 days late ☹ the balance is 6000 dollars (original amount was 11000) It has been sent to a collections agency (Northland or something like that)
3. Another collections for about 1000 dollars that I plan to pay this month.
For many reasons I don’t want to pay the BOA off in full. How much do you think I should aim to settle? Do you think the collections agency would accept 2000 grand?
I know that settling this account and paying the smaller one in full won’t boost my score, but it’s what I can do without losing my down payment money for the home.
Once I pay these two, I plan to apply for a secured credit card of 1000 USD so that I can up my available credit limit and perhaps up my score that way (I foolishly applied for a credit increase on my still functioning BOA card and was denied 🙁 but I did get my Transunion credit score out of it) Do you think this plan is the best one to make me mortgage application ready?
Is it advisable to pay collection agencies with money orders? How do we ensure that the payment is reflected on our accounts? Thanks!
It is possible to settle Bank of America accounts for around thirty percent. The amount you can realistically try to negotiate your lump sum settlement to can be a moving target based on who is collecting now, and how collectable you look. In fact, you may want to focus on settling the larger BofA account first, before settling that smaller collection balance and having that fact be updated to your credit reports. The other unpaid debt makes you look in worse financial shape, which can help.
You are going to want several months to go by after your debts are updated to show as zero balance on your credit reports. I would wait for that time before opening an unsecured account, if it were me.
You should see the fact that your collections are now paid on your credit reports withing 30 to 60 days after your funds clear. I do not like sending money orders unless they are ones issued by the bank where you have your checking account. Use a method of payment for your settlements that is easy for you to track, and to have access to proof of, should a situation come up that you ever need it.
Here are some critical reports I would encourage you to read before getting going on your negotiations, how to pay the settlements you negotiate; and how to get your deals documented.
Michael:
My Bank of America credit card account was charged off in July of 2010 with an approximate $30,000.00 balance. At the time, Bank of America offered to settle the account for $6,000.00. The account was placed with Gatestone and I have been making $200.00 payments since August of 2010. The current balance is about $20,000.00. I would like to settle this account and move forward with my life. Gatestone is willing to reduce the balance significantly, but not willing to state an amount. At the time of charge-off I had no 401K, savings or the ability to obtain a loan to settle the account. My current situation is about the same. In 2010, I believed that I could turn my financial hardship around within a couple of years, but fast forward 4 years and I am living the new “normal”. How much would Gatestone settle for? I have paid more than Bank of America originally offered to settle the account for. Will Bank of America ever write off the balance at a certain threshold? I just do not see a time in the near future where I will be able to come up with a settlement.
Thank You!
What BofA offered to you back then is not all that relevant today. It was a good deal, but a deal is only as good as your ability to take them up on it.
When it comes to established monthly payments with a debt collector for Bank of America, like you have with Gatestone, your best settlement will often be the result of their being no money being sent in. You could potentially get a 6k settlement from Gatestone. That amount, or something close to it, takes nothing of what you have been paying into consideration. Your negotiations will be starting with the balance owed today.
How much can you pull together withing a few months of today?
Michael:
I can probably come up with $2,000 – $3,000. I do no have a lot of extra money.
If I stop making payments, what can I expect?
I attempted to contact Gatestone in July to change my contact information and could not get a respresentative to call me back. I was told by the respresentative, that a supervisor would need to call me back, but no one ever called. I continued to contact Gatestone in August and September and even went to their local office, but still could not get someone to speak with me. When my September payment was rejected by Gatestone, I stopped making payments, since I had no idea where my money was going. Just last week, Gatestone contacted me and I set-up additional payments with them. Something has changed, but I do not know what. I feel Gatestone is being less than forthcoming with me.
Thanks for any insight you may have.
Your opportunity to settle for the best savings is likely going to require you cancel any of the new payments you set up.
The amount you have to off in a single lump sum is very optimistic. Not impossible, but not common. If you continue to save up any and all cash until you are able to settle, it may take several months, and settling at a higher amount than you have today. That means months of no payments to Gatestone. The risk is that the account lands in the lap of a licensed collection attorney in your state.
The risk to settling accounts is ending up in court before you get the deal negotiated. That is the worst of what to expect. And it may never happen. You can expect Gatestone to call you to try to collect. They may send you collection notices in the mail. After a time, you could start to hear from a different debt collector, or even a debt buyer.
Hello,
I have a BOA Charge off (5, 566 USD) the original date of delinquency was April 2012… I was unemployed and so they would not put me on any kind of payment plan.
FF to December 2012, I had a temp gig and made a payment of 120 dollars (the lowest they said they could go) to keep them from chargding off the account. However, the tem gig did not go permanent and I was completely unable to pay anything. The account was charged off in Dec 2012 or Jan 2013.
It has since been sold to two different creditors. l live in Maryland where the SOL is 3 years. My questions are the following.
1. Is the SOL for this Debt April 2012 (the date of first delinquency?) or is it December 2012?
2. I want to buy a house in a year in and half (Spring 2016) and want to know if the charge-off account remains on the credit report, but my credit report has no collections for this account, will it still adversely affect my ability to get a decent mortgage rate?
Talk to an experienced debt defense attorney in Maryland to see how the courts have ruled on the SOL concern you have. My impression would be the date of last payment, so December 2012.
I want to be sure about how your charged off credit card debt with BofA is showing on your credit reports. Does it show a balance owed, or zero due? If zero, who are the debt buyers and collectors you have heard from to date?
Yes it is showing up as zero. It says Charge-off and I realize there isn’t much that can be done about that at this point. But, I tried my best to avoid that (but life happens). Looking forward, I am almost done paying off my student loans (about 20,000 USD worth).
and have only one other negative on my credit report (a charge of about 680 dollars from a former landlord… sent me to collections for cleaning services… but I am not sure I ever got their original bill —- shady address forwarding practices). This bill has been sent to collections, and I plan on just paying it when I can in another month or so. Basically I just want my report as clean as possible before I go for a home. Not sure FHA is the route I want to go, so I want to be in as good shape as possible for any kind of mortgage.
re: the BOA debt, I have heard from two different collectors and and leery of giving either any money. I don’t mind settling for less than owed, but am wondering if it’s better to let them be and let the SOL run out. even if it’s December 2012, then the SOL would be the end of next year. Both have stopped contacting me (phone and mail) in the past few months… and I wonder if either really can supply proof of debt owed.
I just looked it up… North Star location services is (one of the) the collectors. There was a nother, but I haven’t heard from them since after the charge-off (not FIA card services I know that that is BOA’s in-house collector).
Neither collection is showing up on my credit report for 2/3 agencies at least (I stagger my free credit reports so I don’t know about the third.
Looking at some of your other articles, I am wondering if I should try to settle for 1500 USD? I don’t want that line on my credit report though. Would paying North Star cause BOA to change the status of my charge-off to settled?
Also regarding the apartment account in collections the company’s name is fair collections and outsourcing. Do I have a prayer of getting a pay for delete for the almost 700 bucks I supposedly owe?
Thanks!
I’m hoping you can help me with a very difficult decision. I have $19,000 in debt with BofA. I also have a card with Chase with about $8,000 but have worked out an affordable payment plan with them. I’ve tried with BofA, but what they offered me was a $400 payment plan with a debt management company (MMI), but I can’t afford that. It’s higher than what I’m paying monthly now. I’m basically drowning in debt with a student loan, mortgage, car payment etc. I hate defaulting on the BofA loan, but they are driving me to that by not giving me any other options.
The only reasons I would like to stop paying is to, 1 – be able to use that money towards my children and not feel like I’m drowning, and 2-so that they will hopefully offer me a more affordable option. I know I got myself into this mess, but all I’m asking is for a little wiggle room, but it’s not happening after several attempts.
If I stop paying, what’s the worst that can happen? I’m not really concerned about my credit score for quite a few years (have my car, have my home, not planning on going back to school, children are very young so I don’t have to worry about student loans for them for a while.) I just want to get myself out of debt before I’m 40 (6 more years) so that I can start really saving for retirement (have a 401k, but my company doesn’t allow me to borrow against it, but I still put a little towards it since they match).
Any guidance is appreciated.
The lower monthly payment plan BofA is suggesting to you through the credit counseling company is about average for those types of plans. The best it will get would be zero interest with payments amortized over 60 months, and that is roughly 320 a month. And low of a monthly payment is more than likely only if BofA offers it to you directly, and not through a credit counselor, while also something that is not likely to be offered while your payments remain current.
Can you swing 320 a month?
If you cannot, and assuming you can settle with bank of America directly for, say 6k, can you pull together that money in 6 months? If you need more time, how much longer?
Thanks for your quick reply and help.
I pay a little over $320 now, so I could swing it, but it would still be difficult. If after 6 months they offer a settlement for $6k, then I’m pretty sure I could borrow from a family member and work on paying the family member back. Paying it off with a settlement would be ideal. I just want to feel like I’m starting from scratch. It’s the typical, if I knew then, what I know now situation and just want to be debt free to feel like I make the salary I make. Right now I feel like I make nothing because it all goes to bills and I can never get a significant savings.
Settling your credit card with BofA will not be as simple as waiting for them to make an offer. You do want to set the stage in the process. I would encourage you to read through the first stage negotiation and settlement guide starting here: https://consumerrecoverynetwork.com/what-is-debt-settlement/. Click through to the next article at the bottom of each page (before comments start).
You will be better prepared for what is to come, and what to do along the way.
I would not recommend taking Bank of America up on any of the lower credit card payment offers along the way, unless you are 100% confident you can live up to it each and every month without fail. And it sounds like you cannot say that with certainty.
Hello,
Here’s my situation –
I had a credit card with BoA back in 07 and it has since charged off and sold to a debt buyer. I got rid of that debt buyer and had them removed from my credit report, they have sense re-sold the debt but I haven’t been contacted by any other collection agency nor do I care at this point… However, my issue is that BoA is still reporting the credit card as charged off on my report.
How do I get BoA to remove that old charge off from my credit report? I have sent many letters to them with no success. The 7th year will be next year and per the credit bureaus, it should drop off but I don’t want to wait. Again, how do I get them off my report, what verbiage in my letter should I include? Also, i did dispute it with all bureaus and TransUnion was the only one to remove it so far, its still on Experian and Equifax.
Thanks.
If BofA is reporting accurate information about your account charging off, the date of that,that you now owe nothing to the bank(as they sold off the legal rights to the debt), you may just be stuck with it. You may have been lucky to get that off early with TransUnion. You may even get lucky with the other two, or your disputes could be considered frivolous.
What credit or finance goals are you looking to accomplish between now and BofA falling off your credit reports? Are there other negatives beside this one you have to contend with?
i would love to get your advice
i had a credit card go charge off to collectors about 5 years ago balance 2500$
i have never once recieved a creditor call i now suffer bad credit tho
I would like to clear this up to buy home in next 2 -3 years
what are my tools to settle this best i hate that it even got charged off as i paid insurance on the card incase i lost a job.
i lost job told them and they imediatly passed too collections never bothered with it as i i have always been able to get phones hydo cable ect but was turned down on a morgage request and now it hurts me
Is this a Bank of America credit card? Is the account still showing on your credit reports with a balance owed under the original creditor, or is it showing charge off with a zero balance due?
I am looking for who you will need to resolve this with, the creditor, or a debt buyer.
In 2010 we were foreclosed upon but successfully refinanced, our primary mortgage with the lender, Bank of America, who was also the owner of our 2nd, Home Equity Line (both originated by Countrywide). In late 2010, we received a 1099-A from BofA for the Home equity line (balance of $53,000).
We did not file bankruptcy, but did demonstrate insolvency for the other debts we negotiated partial payments on and had received 1099-Cs on each.
We have not filed this 1099-A with the IRS since Florida is a recourse state with a long period for collection, 5 years (I believe).
Is there any action we should take at this time or should we wait until the recourse period lapses?
Can we file an amended 2010 return and include the 1099-A, with the insolvency worksheet? Looking for guidance. We are current on our renegotiated mortgage and BofA refused payments after the foreclosure hearings on the 1st in 2010 and stopped sending us monthly statements also back in 2010. the Home Equity line shows up as ‘charged off’ on our credit report.
Thanks.
It sounds like your loan is likely one BofA viewed as part of the consumer relief side of one of their national settlements. If I am wrong on that, contact them now and see if the debt qualifies with the newest settlement they made with regulators last month. But the 1099-A suggests your loan was factored in for accounting already.
Have you connected with a tax professional, or a consumer law attorney specializing in these issues regarding your questions?
Dear Mr. Bovee,
Per your suggestion to another poster who wanted to compensate you for your generosity, I’m going to donate money or food to a local Food Bank. I’m not sure how I landed on your website but I am glad I did. You are a credit to humanity.
I have a quick question. I foolishly ended up with a judgment against me in Florida and the lawsuit was from Bank of America and LVNV Funding. They sent a “Continuing” Garnishment Writ to my employer but I’m a 1099 independent contractor so when my employer responded that Writ was voluntarily dismissed. A new law firm (Andreu, Palma & Andreu) took over the Open lawsuit and got a new Continuing Writ of Garnishment. I wanted to get this put behind me so I was able to reach an agreement for $5,600 to settle. The Settlement letter shows FIA Card Services not Bank of America and it is very brief . I’m worried that if I pay LVNV Funding the $5,600 then it may not actually settle the outstanding judgment . When I asked the collection employee about the name difference he said BofA and FIA Card Svcs are one and the same and that his phone lines are recorded so I didn’t have to worry.
Do you think I should go ahead and pay money to an attorney to file something at the court to confirm their acceptance of my $5,600 to settle this in full?
Truly appreciate your kind assistance to me and all of the other posters here.
FIA and BofA are, for all intent and purpose here, the same. LVNV is a debt buyer. Look at your credit report(s). Does the Bank of America account show a zero balance owed?
Thanks for supporting those in need in your local community. Low income legal aid offices in your area are sure to be underfunded, and are a cause I get behind for money donations.
Wow, thank you for such a quick response. I’ll also donate money to a Legal Aid Office at your suggestion. This was an old debt and it only appears as a Judgment. So you think I’m probably safe to go ahead and pay the $5,600 to Andreu Palma & Andreu and follow up to be sure they voluntarily dismiss the Writ of Garnishment and paperwork with the court to prove the Judgment is settled?
Can you recommend any collection attorneys in Tampa in case I want to be sure the Judgment gets satisfied with the $5,600?
Thank you for such a helpful website!
I sent you an email with contact information to three consumer law attorneys in the Tampa area, all with the debt collection experience you need. I would talk your situation over with one of them (they likely offer a no cost initial consult), prior to taking your next step with payment on the settlement.
Hi:
I have an interesting situation. I had a 14k cc debt with bofa that i stopped paying on in 2006. It is no longer showing on my credit report. I confirmed with bofa that they sold off the debt to a collection agency. I called the agency, they said the account was closed due to dispute and not in collections. I don’t know how to settle this old debt now that I am ready, and wonder, how do I proceed?
What is your goal with settling the debt? What is the name of the agency that has it? I can better respond with feedback if I knew the answers to those questions.
Good evening Michael. I stumbled upon this site while I was trying to research an issue I’m having with three old (5 1/2 yrs) charge off accounts. Awesome advice on here so I’m hoping you’ll throw a little my way. I have three accounts that were charged off in early 2009 that have reported every month since then on my credit report. In 2009 I also had two other CCs and an auto loan that also charged off but theyve never reported after being charged off. So Im really frustrated at the fact my credit score is barely over 6 after all this time with no negative items since and did some research and found an article at myfico.com that reads “When an OC does a CO, they must, under IRS regs, post it as bad debt on a closed account in order to take the IRS tax benefit of the CO. Then they can challenge the unpaid debt itself, by collection activities. But the account is closed, and no further monthly delinquencies can occur, or be reported.” If this is correct does this mean that they’ve been wrong in reporting this for so long and this is whats killing my score and if so will a dispute get this corrected? Also if corrected, how far back will the correction go and what effect will it have on my credit score going forward?
Guy – I am not entirely sure what the commenter on the FICO forum was trying to say. Charge off is a GAAP accounting principle first, that later turned into a credit reporting reference.
I am not sure what all is meant by the commenter from the FICO forum you are quoting, and I really struggle to understand “challenge the unpaid debt itself, by collection activities”.
Let’s start from scratch.
What state do you live in?
How many positive trade lines do you have on your credit reports right now?
Did you open up any new accounts since these older ones went into default?
Thanks for the reply! I live in NC and Ive opened up three secured cards, one two years ago and the other two 9 months ago. No missteps with any of them and have been using them and either paying off the balance or just a portion of the payment. Credit line for all three combined is around 1500. I think that what he was saying is that once the delinquency reaches the 180 day mark they are legally? required to charge it off as not collectible. Then it transfers to in house collections or sold off and that this activity doesn’t show up on the credit report, under the adverse account tab, but transfers to the collections portion of the report. I guess I’m wondering why these three keep reporting monthly delinquencies 5 1/2 yrs past the charge off date when the others didnt and if this is what is killing my score from improving. Im just reading forums from everywhere, where people have much better scores, with shorter time periods and similar credit issues. IE my TU score has gone up 13 pts in a year. EX is the exact same and EQ is wayyy below 600. Thanks for the help.
Thanks Guy, the additional details help. It is possible that BofA credit reporting is somehow stuck on stupid, and filing a dispute regarding any fresh delinquency, or monthly negative attribute, may help. You would file those with the credit bureaus and with BofA. If the picture is not clearer when those responses come back, lets go from there.
A couple of additional questions for clarity:
Do the BofA accounts show a balance owed to them still, or do some or all show a zero balance owed?
Are there any additional collections showing up from agencies or buyers on your credit reports? Is so, please post what you see with those.
Tried to send this in an earlier reply but it got cut off.
I wanted to give you a little more detail on what the report says on the Capital One account.
Date Opened: 04/09/2005
Responsibility: Individual Account
Date Updated: 07/06/2014
Last Payment Made: 01/20/2009
Pay Status: >Charged OffMaximum Delinquency of 120 days in 07/2009 and in 08/2009PRL<
Rating-C/O
Hope that helps clarify what I was talking about. Thanks again for your help. Can I send you some money for this?
I would still look to disputing any recency reporting on this debt as referenced above. Capital One has to be the most belligerent of credit report furnishers among the larger banks in the US. See this post from years ago where I cover some of the shenanigans: https://consumerrecoverynetwork.com/why-does-capital-one-hate-america/.
I am not sure what you would send me money for, as we are just openly exchanging comments on the site, but no, I do not work with consumers in any paid capacity at present. My policy for help I cannot or will not charge for is to ask you to pick up an extra bag of non perishable food when you are next at the grocery, and drop that off with your local food bank.
I wanted to give you a little more detail on what the report says on the Capital One account.
Date Opened: 04/09/2005
Responsibility: Individual Account
Date Updated: 07/06/2014
Last Payment Made: 01/20/2009
Pay Status: >Charged OffMaximum Delinquency of 120 days in 07/2009 and in 08/2009PRL<
Rating-C/O
Hope that helps clarify what I was talking about. Thanks again for your help.
The charge off is just an accounting term the creditors use. I have a similar issue with AMEX where I became delinquent in 2009. they stopped reporting for a few years and then started again in May 2014. My score also suffered a lot. There really is nothing you can do except wait it out and allow it to fall off your report. I tried complaining to the CFPB but there was nothing they could so.
Best way for you to improve your score until it falls off is to keep your credit utilization low, make timely payments on your active cards/loans, and keep your credit applications to a minimum. Good luck!
Wow! Michael, the amount of time you have spent with these other people is so awesome with a wealth of information within. I am hoping you may have some insight and advice on my situation.
I have 3 accounts marked as charged off by Bank of America & Capital One. All accounts were satisfied by their respective collectors; the collectors even removed their collection accounts off of my credit report when I sent them Goodwill letters. The problem now that I am facing is BofA and Cap One won’t budge on removing my Charge-Off’s. I have sent Goodwill letters to CapOne and I got a response from their Executive Office telling me no. I emailed the CEO of Bank of America and received a no from their Executive team as well. This is how each looks on my credit report:
Bank of America 1
Date Closed: 10/2008
Balance: 0
Current Status: Payment after charge off/collection
Description: Purchased by another lender
Bank of America 2
Date Closed: 10/2008
Balance: 0
Current Status: Payment after charge off/collection
Description: Purchased by another lender
Capital One
Date Closed: 12/2009
Balance: 0
Current Status: Payment after charge off/collection
Description: Settled-less than full balance
At this point, I do not know what to do and am hoping I have not exhausted all options. As others have mentioned, I too am looking for a Mortgage and doing my best to clean up my report as much as possible before applying.
Thank you!!
Kelvin – I wish I had some encouraging things to share that meant you could continue to try to get these negatives from BofA and CapOne off of your credit reports with some measure of hope.
You do not need these to come of your credit to get a home loan approved. What are your credit scores now?
Thank you for the lightning fast response. My credit scores range between 641-658. I know I could be approved for a loan mortgage (At least I am pretty sure) but I know I would get one of the worst possible rates possible. So I take it there really isn’t any methods I haven’t tried that even prove somewhat successful?
Kelvin – Scroll up a little from this comment to KC’s from earlier this morning. Qualified for FHA financing with a better interest rate than expected with 3.5% of purchase price down payment. All things being equal (stable employment, good debt to income etc), you may be surprised by what you can access with your scores, and an otherwise healthy credit profile (other than the charge offs showing from Bank of America and CapOne).
Hello,
Received a transfer of account from Green Tree on a Beneficial Home Equity Loan from 2007 ($28k). Haven’t made a payment since 2009 (due to 3 years unemployment and spouse on SS disability at 1/3 of previous earnings). I currently have a job that pays a decent wage, but as of 9/2/14, I will once again be unemployed and not looking forward to it. So, my question is this; How do I handle this debt collection from GreenTree? Should I request a debt validation? Should I try to negotiate for a settlement. Please bear in mind that we have no savings, no retirement, etc. We have no credit cards, just a mortgage and a car payment and a child in college. We filed bankruptcy in 2004 and have just over a year to go before it’s off our credit report. I’m concerned that with the upcoming unemployment and the knowledge that it may take me up to a year or more to get decent employment, that we may have to file bankruptcy again. Any information/suggestions would be helpful. Thanks.
Jay – What state are you in? What amount of money are you able to pull together if you were to offer a settlement?
We live in Indiana and I’m not sure, maybe $1200-$1500.
The SOL for you to be sued to collect a deb like this is 6 years in Indiana. It is very unlikely you would be able to settle the Green Tree debt for 1500 dollars.
You may indeed need to look at bankruptcy again, and can do that now since it has been 8 years since your last. You do not need to wait for the prior bankruptcy to come off your credit reports. I might wait to see if I get sued for collection before filing for bankruptcy protection. And in the mean time, things could improve enough for you to raise more money to offer a more realistic settlement.
Michael, thanks for the information. In your opinion what would be a decent offer for a settlement with GT? We would prefer not to file bankruptcy. Is there any way a person can find out just how much the junk debt buyer paid for the bad debt?
Thanks.
Jay – Try not to get hung up on what a debt collector pays for the legal rights to collect on defaulted accounts. Knowing that information is not all that meaningful to negotiations, even in the scenario where you might be able to get that information, which is in court defending against being sued.
How these accounts get resolved can vary, and the targets you would look to settle for can be impacted by local markets, your still living in the home/planning to leave, how far underwater the home is, etc.
Are you planning on staying there?
Hi Michael,
I had two BoA VISA cards charged off in Oct and Nov 2011, respectively. One card has a balance of ~$31,000, the other a balance of ~$5200. Both cards are charged off on my credit report with the full balances. I’ve contacted both the BoA collections and recovery departments, and FIA card services indicate the accounts are still owned by BoA but now handled by Trak America (31k) and Hannah & Associates (5k). My wife also had a charge off of $6700 for a BoA VISA, which I just recently settled last month with Portfolio for approximately 50%.
My credit history with Capital One, Discover, Sallie Mae and utilities are spotless and my credit score (even with the charge offs) is fair-good at 670. In the Fall of 2011 I took a new job, and my income has increased 2.5 fold from 2011 to now, and therefore I have the finances to settle the debts at ~40%.
The catch is that I want to purchase my first home in the near future – obviously getting a mortgage with the charge offs are a huge problem, even with the 670 score (even though I now earn almost 100k). The vast majority of the debt on the 30k card is interest, because (unbeknownst to me) my wife was using that BoA card to pay all of the bills until the card was maxed with principal and interest. Thus, I thought I would offer 1800 for the 5200, and then start my offer at 10k for the 30k account.
My plan was to use my savings for a down payment, but my lender is indicating that securing a mortgage in 2014 will be almost impossible until I settle the charge offs. What do you recommend – and do I have any chance of securing a mortgage without settling these accounts (my students loan balance is ~25k with a clear history)? Will settling the card account with the lesser balance have any positive impact on my score and possibility for a mortgage?
Thanks,
KC
The direction for home loans and unresolved collections has been, and continues to be, tougher underwriting standards, and requiring accounts show paid (settled for less is the same thing).
Your negotiating target balances for settling with BOA are on the lower side of realistic. If you can afford to pay 40% in a lump sum, you are ready to get the deals together.
I do not think you have a shot at getting a home loan through by just settling the smaller collection with BofA. If you are not ready to settle both, how long would it take to pull together the money needed to settle both?
Thanks for the honest opinion.
I have the money to pay off the cards now – but don’t have the money to pay off the accounts AND put down a decent down payment. My mortgage agent has forwarded my information, along with a written statement explaining the charge offs, to the underwriters. I will hear the outcome and/or recommendations later this week. My agent indicated he has never quite seen a credit report like mine (670 score with such high charge offs), so he has no idea what the underwriters will do. Also note that I said I would offer approximately 30% – I can always settle for higher, or hold my ground and play the waiting the game…
I have another question. When I ‘fell’ into this mess, BoA had severely over-extended my credit – my wife and I had more credit on 3 BoA cards than our annual GROSS income. BoA kept increasing the credit lines, and informed me (on more than one occasion) that the only way to lower my credit would be to cancel one of the cards. I was keeping the credit line open to get a mortgage, which obviously backfired when my wife used the cards to pay bills. I have taken some time to reflect on this matter, and most of my other creditors would have refused to increase my credit, because those accounts require proof of increased income to approve the request for a credit increase. Can I lodge a complaint with any agency on this matter? Yes, I take full responsibility for the debt, but (IMO) BoA should accept some liability for over-extending credit.
Lodging a complaint against BofA increasing your credit limits beyond any reasonable underwriting criteria will not lead to anything in my opinion. It would probably be a cathartic exercise though, so probably some value to it from that angle.
Let me know what you hear back from you loan officer and lets go from there.
Hi Michael,
Following up, I’m approved for an FHA loan. In essence, the charge offs prevented me from securing a traditional mortgage, but my current finances and my collective credit history with all of my other vendors allowed me to go FHA. I have since settled my BoA card with the lower balance (for 50%), and am negotiating a settlement for the higher balance. I found a house for a much lower selling price, which also allowed me to purchase a home with a monthly mortgage at ~15% of my gross income. I need to settle the last charge off to secure a traditional refinance, but this will only come into play in about 5-6 years, when I will want to drop the PMI from my monthly payment. In all honestly, the FHA mortgage has one of the best interest rates and APR on the current market, with only 3.5% down, so it’s a win-win until I want to drop the lifetime PMI (which was instituted after all of the crappy subprime mortgages and Fannie Mae/Freddie Mac chaos).
Thanks!
Great work KC! Glad you found the site, and our correspondence useful. And thank you for coming back to post an update.
Michael, I owe $1200.00 on a charged-off Kohl’s account. I was called by J.C. Christiansen and Associates and negotiated to settle for $700.00. I asked them to send me the offer in writing. They only offered to email me the offer. Would an email be just as binding as a written offer? Now that I’ve talked to them and negotiated they are only giving me 2 days to secure the offer with my checking account. They said they sent me an offer last week in the mail (which I haven’t received yet), Is it better to send a money order or another form of payment, as opposed to giving my checking account number over the phone? Thanks for your help.
If the email is an attached document, and not a the agreement in the message body, I would accept it. I would also be okay with using an ACH payment, or check by phone payment. But only if you have a written outline of the agreement, or a full recording of all of the details, and also only with an established debt collector like JC Christiansen.
Mike:
I owe a total of $63,398.22 on 3 credit cards that I haven’t paid in 6 months; all have recently been charged off. I’ve retained legal counsel for possible bankruptcy as I can’t pay them due to a down turn in my business (I’m self-employed). I may be able to make a settlement offer (I could pay off 25% of the debt). Does it make sense to wait a little longer and or have my attorney make the offer?
Who are the credit cards debts with? That answer will help me offer more complete feedback.
Credit Card Breakdown:
Alliant Credit Union VISA: $24,811.15
US Bank VISA: $23,114.56
Capital One VISA: $15,472.51
Thanks for the additional details. 25% settlements from your credit union and Capital One are probably off the table. Negotiating 25% with US Bank is no longer all that likely either. Are you looking at chapter 13, or chapter 7? Are any of these debts in the business name only and not yours?
The debts are in my my name. I’m a small sole proprietor business. I was looking at Chapter 7. They’re my personal credit cards.
Hi Michael:
I never heard back after my previous post. Any thoughts? Catherine
Sorry to have missed that Catherine. Avoiding bankruptcy is a worthwhile goal, but should you? Can you continue your business and meet your needs after the chapter 7? Are you concerned about possibly being locked out of the home loan market for 2 years? Did you intent to take out any parental plus, or personal student loans in the next 3 years?
Even settling at 25% with those creditors of yours, or debt the debt collectors that have, or will have them, you are still looking at costs in multiples over the national average for a chapter 7 bankruptcy.
You can see what happens with the attorney making the offers, but if anything over 25% is a show stopper, and there are additional costs with the attorneys efforts, I would put this behind me.
Yes I can continue my business and meet my needs after the chapter 7?
No I am not concerned about possibly being locked out of the home loan market for 2 years? And No I don’t intent to take out any parental plus, or personal student loans in the next 3 years?
CAN YOU CLARIFY WHAT YOU MEAN BY THE FOLLOWING:
Even settling at 25% with those creditors of yours, or debt the debt collectors that have, or will have them, you are still looking at costs in multiples over the national average for a chapter 7 bankruptcy.
Also, based on your final comments are you saying bankruptcy may be the best option?
Yes, I am saying that chapter 7 would be the better option based on the little I know of your situation. Mostly from the perspective of costs, but also now from credit and finance goals too (no need to refi a home loan or get a new one, no student loan needs). See this post about comparing the impact to your credit, and access to credit products, by settling debts compared to bankruptcy: https://consumerrecoverynetwork.com/credit-report-score-rating-debt-relief-programs/
National average costs for a chapter 7 bankruptcy are about 1800.00. That is start to finish, all court costs and fees. Based on your debt load, and settling with your creditors at 25%, you are looking at more than 15k in costs, not including the fees for the negotiation service. Now add that Capital One will not likely be settling for 25%, and that it is now more rare to negotiate a 25% payoff with USbank (though still possible), and you are looking at more than that.
If you learn something about how the bankruptcy will impact you that gives you pause from filing, lets dig in and find a way that settling can work for you.
Hi Michael:
A follow-up to my situation. I was sued by Capital One and negotiated a 50% settlement (payment over 4 months). I am unable to do Chapter 7 at this time as I’m making too much and have too much cash on hand with receivables. I guess having the money and the uptick in business is a good thing!
I negotiated a settlement with Alliant for 32% ($8K on a $24,800). I have US Bank as my final debt ($23K). I will sit tight on this one until I save up more cash and/or hear from them.
You are doing awesome Catherine! Thanks much for the update too.
Who was the last debt collector to contact you about the USbank card?
My last contact was with US Bank’s Collections Department back in Feb/March 2014. I advised them at that I was being represented by an attorney and was considering bankruptcy.
I haven’t been contacted by a debt collector representing US Bank yet but I’m sure I will be at sometime. I haven’t reached out to anyone at US Bank as I don’t have any funds at this piint to settle with them so I’m letting sleeping does lie (for now). I’ll start saving dollars for the last & final settlement.
It is best to lay low if there is little to no funds to access and apply towards a solution.
The reference to attorney representation in their files can create a scenario where the account is not dropped into one of their general collection buckets. You will be contacted eventually, and if not, you can reach out to them when you get to a point where you have 25% to 35% of the balance saved up.
Thank you Mike for all of your information. I do plan on resolving this as quickly as I can. Needless to say, I am nervous and I would much rather settle this than worry and wonder every day, I just needed a 2nd opinion and I am very grateful.
Yeah, I agree. In your opinion, do you think there is much of a threat of a pending lawsuit in this situation? I know there’s no way to guess. I’m trying to buy a little time before contacting them but like I said, I don’t want to push it.
Kyle – I know only what is in these comments, which is far too little. But my opinion is that you are not at risk. Having said that, I am also of the opinion you should look at resolving this as soon as possible.
OK, thank you for the advice. If you were me, would you risk continuing to “hold out”, in hopes of reaching graduation next year, before any lawsuit may develop, or would you just try and settle it now and be done?
My sense is that you want this behind you, and if I felt that way too, I would just get debt collectors and the bill behind me.
The name of the debt collector is Progressive Financial Services. My situation is that I am in school full-time and will graduate in one year, and I could really use the money for tuition. But, I don’t want to push it and end up being sued, especially for the full amount. If it seems likely that I would probably be sued by then then it might be worth the peace of mind to just contact them and try to settle instead of worrying every day between now and then.
Thanks for the additional details. I do not think your starting a dialogue with Progressive Financial Services about settling with them will cause them to sue. Just be realistic about what you can settle for, and try not to get hung up on what they pay for debt like yours. Most debt buyers do not collect a penny on 80-ish percent of what they buy. The price paid will not have much, if anything, to do with what you settle with PFS for.I would target between 30 and 50% if it were my debt (smaller balances do not often settle for the best percentages). I would not go for any payment options, just a single lump sum, and after the deal is documented similar to the prior settlement letters you received from PFS.
Hello, I have a question regarding how to handle a charged off credit card. My card has an outstanding balance of roughly $1200.00. I have received two offers to settle, with the last one being $735.00, with a deadline to respond of March 5th. I didn’t have the money at the time so I didn’t respond. I have the money now but I am wondering if I should contact them to see if they are still willing to settle for that amount or if I should hold out. I’m nervous that they will sue me and ask for the entire balance, but I’m sure they bought the debt for next-to-nothing. I know there’s no way to know for sure what their plan of action is, I just thought I would ask your opinion. Thank you for your help.
Kyle – What is the name of the debt collector? That would help me offer more than general feedback.
If you have 50 to 60% to offer in order to settle the balance now, and the account is not with an attorney debt collector who is preparing to sue, and your credit profile looks like someone whose financial situation has not yet turned around, I like your chances. Being proactive and calling debt collectors to make an offer to settle does not necessarily make you a lawsuit target. Depending on the debt collector, the opposite would be true.
I have an AMEX card I stopped paying in late 2009. The card was charged off a couple of years later. Today, I got an alert from Experian saying that my score dropped 50 points because AMEX listed the card as charge off recently. It seems to me that they are trying to Re-age the account. AMEX reported no Data for two years and not reports as Charge off killing my score. Is there anything I can do?
JR – Was there any new information that showed up on your credit report regarding the AMEX account? Something like a collection account being added? Have you viewed the credit report(s) changes? Your answers will help me offer actionable feedback.
Nothing was added other than recent Key Deragtory. i dont know why AMEX stopped reporting for 2 years and started again. It would have been better if they updated very month. I’m thinking of writing them and also contacting the CFPB
JR – That is the direction I would go, only I would call AMEX about the credit reporting issue first. Document the gist of that call in a formal credit reporting dispute you send to them certified mail return receipt. You can copy your dispute to the credit reporting agencies (send those certified mail return receipt too). That documentation will serve a purpose if you file a complaint with the CFPB. You can also just skip right to filing the complaint with the CFPB.
michael,
i filed a complaint with the CFPB against AMEX for numerous violations by their collectors such as First Source Advantage, Nationwide, & NCO. AMEX actually confirmed at least 4 Violations in their response. i have a few other instances i did not list where AMEX violated my rights. I’d like to use this to negotiate and wipe out my balance or at least reach a favorable settlement. What do you think is the best way to approach AMEX. thank you!
Who is the last known debt collector? What is the balance owed today? What state are you in?
I am in NY. balance is about 7K. last known collector is now Jaffe & Asher, a law firm collector. the SOL is 6 years in NY which I am 6 months away from since i first became delinquent in early 2009. However, NY has had a few cases where the SOL is borrowed from the creditors state which in my case is Utah (4 years)
I have to think that AMEX confirming at least 4 violations by thier collectors to the CFPB investigation has to be worth something in getting this resolved. Thanks!
You would likely fair better using an attorney to bring and FDCPA action. I can email you contact details to some with the experience you need.
AMEX has never really staffed well to handle settlement and negotiations on their own. The rely on all of the companies and attorney collectors in the collections pipeline they set up. But your attorney will be able to converse with counsel for AMEX easy enough once an action were filed, or prior to.
i would very much appreciate if if you could email me names of attorneys in NY who you might be ideal to deal with AMEX. Thank you.
JR – I sent you a couple in the city. It would be great if you were to post an update with how you progress.
Hi Michael,
I had a Bank of America Credit Card, which is reporting as Charged Off on my credit report.
Date Opened: October 2005
First Reported: November 2009
Date of status: May 2012
Credit Limit/Original Amount: $10,800
High Balance: $12,000
Recent Balance: $10,740 as of March 2014
The status states that the account was changed off. $10,740 written off. $1,545 past due as of March 2014. The item is scheduled to continue on my record until December 2017.
In the past, I have also been contacted by Gatestone Collection agency regarding the debt though I have never acknowledged the debt with the collection agency.
I’m hoping to purchase a home in the near future so repairing my credit is important to me. My question is as follows:
1.) Did Bank of America sell the debt to Gatestone Collection Agency or does Bank of America still own the debt?
2.) If Bank of America did not sell the debt, why did Gatestone Collection Agency contact me?
3.) If I pay the debt in full, will Bank of America reinstate my original credit card account maintaining my original opening date and credit limit and/or minimum remove all negative items (i.e. late payment history, charge offs, and high balance) from all 3 credit reports completely?
4.) If yes to the above, what documentation should I request from Bank of America before paying?
4.) If Bank of America no longer owns the debt, and it is in fact owned by Gatestone, what is my best course of action?
Dave. Thanks for the details.
1. Your BofA account was probably not sold to the Gatestone collection agency. Gatestone is likely collecting for FIA card services. Your comment references BofA still showing on your credit reports that a balance is owed to them. This generally means the account has not been sold.
2. Gatestone is probably calling you to try to get you to pay so that they can collect a contingency fee. Contingency debt collectors get to keep a small amount of what they collect (say 15%).
3. There is zero chance BofA will reinstate your charged off account. You could not pay them triple the amount owed to do that. Nor can you pay off the full amount and get the charge off collection removed from your credit report.
I would recommend settling the BofA debt with Gatestone for as good a savings as possible (40% is a realistic target, but you may be able to get a little lower); get the deal documented following the outline here; wait 30 to 60 days and check to be sure that any BofA reporting now states that the account has been settled, and that there is a zero balance owed.
Michael,
Great article! It was like a refresher course for me about that process. I found this article because I am having a problem with Bank of America. Two years ago, I settled a large amount of credit card debt with a number of credit card companies, including Bank of America. Since then, I have been getting my credit reports periodically to check them. Recently, I finally looked a some of the finer details of the report, especially the BofA credit card. All of the other settled accounts show a Charge Off/Failure to Pay entry in the month of my last settlement payment, and then nothing thereafter. However, BofA shows a Charge Off/Failure to Pay entry for each month since my last payment to them in April 2012.
When I spoke with them today, they said that they do not report a settled account after it has been settled, that the credit reporting bureau is in error, and that I’d have to work with them to get it corrected. However, this error is the same across all three credit bureaus. It seems to me very unlikely that all three bureaus would have the same error on the exact same account. To me, it seems very likely that BofA has some glitch in their system that may be causing this.
What is your take on this situation? Have you heard of this before? Do you have an opinion on how I should proceed to get this resolved?
Thank you very much for your insight!
Paul
Michigan
Paul – I do see issues with Bank of America credit reporting from time to time. All banks and debt collectors have some glitches in this regard.
If it were me, I would send a dispute about the issue to all 3 credit reporting agencies, while copying BofA on them too. Send all letters certified mail return receipt. Keep a copy of all letters and the return green card from mailing in a safe place. Give the the 30 days time to investigate your dispute and get back to you. The issue may be resolved once Bank of America gets a more formal credit reporting dispute communication (as opposed to customer service line getting a phone call).
If that does not lead to the desired result, the paper trail from that, along with your notes about what you were told by BofA today, and all that transpired years back when you settled with them, can and should be compiled in a credit reporting complaint with the CFPB. But lets cross that bridge if it is proven necessary.
Thank you very much, Michael. I will follow up when I have completed those steps.
Hi Michael!
AWESOME article! So, I see how much help you were able to offer some other commenters with their credit issues, and I have a few that I would LOVE some help with.
1. I had an account with Bank of America (checking, savings, and a credit card) and when I signed up, I enrolled in something called “Credit Protection Plus”. The main point of this program was to help me out incase I was fired, sick, or for some other reason lost my source of income. According to the program, in the event that loss of income occurs, a monthly payment will be waived and your account will not continue to increase, and you will not be penalized for the non payment. So, in June of 2012, I became very ill. I had to take a bunch of time off work, and in the end it was discovered that it was my workplace that was making me ill. So, when I took my first leave of absence, I notified B of A that I was sick and wanted to use my “Credit Protection Plus” (a program that I believe I payed into the whole time I had that card, which was since 2006). They sent me a form, that I filled out in its entirety, and sent back to them. Thinking that they got it and that I was taken care of, I stopped making monthly payments on my card. Well, 6 months later, they closed my credit card account as a charge off and the balance had gone from around $700.00 to $3,000.00. What on earth can I do to fix this!?!
2. A few years ago, I enrolled in classes at UNM in Albuquerque, NM. Well, I ended up leaving the state before the classes even started. I didn’t even attend one of these classes. My dad told me he would drop me from registration and all that stuff. Well, turns out dad is forgetful and a charge for a bunch of money from UNM showed up on my credit report. I tried calling the school directly to dispute it with them and they said that there is nothing that can be done. Is this true?!? I mean, I could understand if I went to the classes and failed them, but I didn’t even go!!
3. I have heard from people that medical bills on your credit report are not taken as seriously as other delinquent bills. Is this true? If not, how should I take care of my medical bill debt?
4. Last question, thank you for being so patient! I had an account with Verizon Fios because they sent me a box for cable service and I never recieved it. Find out a month later, my neighbor did. As soon as I got it, I sent it back to them and I paid them what they said I owed. The weird thing is that this account still shows up on my credit report, and as negative? Why is that? When will it show as resolved? I paid it mostly because I wanted to help my credit score (because it was a B.S. charge) and it hasn’t helped it at all.
Thank you SOOOOOO much for your help, I have been trying to find a way to fix my crappy credit for SO long now and I started to think that the light at the end of the tunnle just might be a train! I really appreciate ANYTHING you can do or tell me to help. Thanks again! : )
Kelly
California.
Kelly Anne – There are some very real concerns that are being raised about payment protection plans with large credit card issuers. What, if anything, did Bank of America say to you about the credit protection plus program after you brought it up all this time later? When is the last time you contacted BofA about the account?
It is terrible that they would still charge you even though you moved out of state and never attended a single class. I would suggest you put together a complete chronology of all that took place with the UNM student debts (dates, names, results or lack thereof). Once you have all it all put together, file a complaint with the CFPB here.
Medical debts that go to collection are… a collection. They will impair your credit, and your DTI ratios, etc. How many medical debts are we talking about, and what are the balances? How long ago were the debts incurred?
If the Verizon account was showing as a negative when you paid it, it is normal for it to now show as a paid negative (an account that went to collections but that is no longer owed). Paying the account to help your credit, with an expectation that the needle on your credit score would move, is not a realistic expectation if you have many other collections.
I live in Connecticut Mike
Thanks Leisa. An expired SOL for legitimately using the courts to collect from you can lend to different negotiation approaches. I am going to encourage you to speak with an experienced debt collection defense attorney in Connecticut about how your bank of America business line of credit is viewed for SOL purposes. If viewed as a revolving account, the SOL passed after 3 years, if as a written account, and given you said the last payment was 5 years ago (even though business closed more than 6 years), you still have at least some risk of being sued.
If the SOL is indeed passed, you have some decisions to make about settling. And if you do choose to continue to resolve the BofA debt, you could certainly be more stubborn and not agree to any paperwork they are asking you to complete.
Talk to the attorney about the language they are using that concerns you. It would concern me too. I have never seen that verbiage in a doc when settling debt with Bank of America, whether business or personal accounts. But it sounds like boiler plate language. So you could be looking at a form used for all sorts of things.
I have a list of experienced consumer attorneys you can call. Many of this type attorney offer a no cost initial consult. Would you like me to email that to you?
That would be great. I would like to contact a lawyer
Thank you for your help
Leisa
Hi Mike,
I am glad I found this site. My mother and I had a small sign business that ended for me in 2005 and two years later the business dissolved with my mother. We had a small credit line that I thought was taken care of and wasn’t informed until about 5 years ago that we defaulted and owed Bank of America. I found this out when they deducted money from my checking account. At that time I was unemployed and had no way of paying a settlement of 5,000 owed 12,000. Now I have received a letter saying I owe 17,000 with interest etc. I have spoken with the lady there and she is telling me I need to fill out confidential personal financial statement that states (this statement is submitted to you for the purpose of inducing you to extend or maintain credit to me(us) etc. I had offer her that I can close my 401k that only has 4,000 dollars and would that settle it. I am very reluctant to fill out this form. I don’t own any real estate etc but I want this resolved. Something is telling me not to fill this out.
Thank you for your help
Leisa
Leisa – Is there a judgment in the courts on the Bank of America business line of credit? If so, is the judgment against you personally, and the business? If sued on the LOC, was BofA the plaintiff?
Hi Mike,
Currently there is no judgement. The business was an LLC. Its been dissolved for over 6 plus years.
They are looking to settle but they are asking for me to fill out a financial statement and in that statement it says this statement is submitted to you for the purpose of inducing you to extend or maintain credit to me(us) whether as direct obligor(s) or indirectly as guarantor(s) or orther indirect obligor(s) of credit extended to others.
What does this really mean. It sounds if I am reapplying for a loan.
Thanks
Leisa
Thanks Leisa. I should have also asked what state you are in? Once I reference the SOL for you to be sued I can offer some more focused feedback.
Hi Mike,
You and I had a conversation on here a couple of weeks ago about being “served” from a debt collector. I called the collector within 15mins of receiving the papers, and made a 100.00 payment. The next day I received a letter from the collector offering for me to use my tax return to settle at a reduced rate. I sent the offer to them which was for 1875.00 on 2983.00 debt. (I accidentally deleted the email responses that I received from you so I apologize for having to repeat all of this). Anyway, I haven’t heard back from them regarding my offer yet. I noticed just now that the filing date on the paperwork is dated for December, 17 2013 , but actually received it on February, 3 2014… Would they have intentionally held the paperwork to make sure that I didn’t contact them within the 35 day deadline?
Thank you for your help.
Kyle
Kyle – I am not an attorney, and cannot offer you legal advice, only offer some general feedback, which should not replace you speaking with an experienced consumer law attorney. I can help you locate one with debt collection defense experience if you would like. Just post the name of a nearby larger city. That said, the date a suit is filed in the court generally is not the date that starts the clock ticking for you to file a response. It is the date you were served that starts the clock. So, no, I do not think they were trying anything creative.
When you say sent above, do you mean took them up on the settlement offer and sent payment? Did you talk with anyone at the firm about the offer?
Thanks Michael. Actually, I did both. I made a 100.00 payment immediately over the phone, and it was the following day when I received the offer from them in the mail to settle for less by using my tax return. I haven’t heard any feedback since then but that was only about 10 days ago. I filed the Answer to summons this afternoon in person at the courthouse and they said that the 35 days started the day I was served, not the day that it was filed with them so I’m safe there. And, I stated in the Answer everything I’ve mentioned here as far as contacting them immediately, making a payment over the phone, and returning the offer to them (this was recommended by the court clerk so the judge would see that I’m trying to settle this).
The offer they sent me didn’t specify a particular amount (I came up with the 1875.00 myself. I’m just waiting to hear a response from them on that.
Okay, so it sounds like no 1875 was sent, just a firm offer relative to them sending you an offer after serving you?
I generally encourage people to negotiate on the phone and leave the documentation to the final stage of settling, where everything being agreed to is spelled out, reviewed to be complete and correct, any questions answered, and only then are settlement funds sent in on time to meet any date on the agreement.
You filed an answer, but it sounds like you pretty much agreed to the debt. At this point, if I were the collector or the attorney, my decision to settle for the $1875 will boil down to real time value of money (which is a motivator in the collection industry), and whether what is represented as available to settle is what I think I can get.
If you do call to check on where they are at in review of your offer, do you have any personal financial hardships that led to the inability to pay in the first place, that can be used to elevate how positively your offer is viewed?
Yes. I am in school full-time, and I had not been able to get enough hours at the hospital that I worked at because of over-staffing, so now I am applying at other hospitals and I mentioned that during the initial contact with the attorneys. They have no access to garnishing wages at this point because there are none. I did agree to the debt since it is valid, I’m just hoping that since they sent an open-ended offer to settle for less, using my tax return, that they will take it or at least a close amount. I didn’t call back to negotiate when I received their letter since it was only the following day since I had talked to them and I was still in panic mode. The reason I wasn’t able to get hours at the hospital was because they had hired a lot of new employees in preparation for a huge expansion that opens this fall and I was in a “flex” or “PRN” position which does not have a guaranteed number of hours.
Thanks Kyle. If I were in your shoes, looking at the same set of circumstances you shared, I would call and see about getting that offer to settle accepted. My concern would be that I have made myself look more collectable, and would assume the other side sees meas someone who, if they got a judgment against, would be likely to pay it, and the legal costs associated, in pretty short order (after school, or once working again). Not all debt collection is geared toward getting money “right now”, even though that is how debt collectors come off when going about the job.
Lock it in if you can, and be prepared to repeat your hardship, and for the offer to be countered with a higher amount.
Michael Bovee,
I just recently looked at my credit report. I went delinquent on an account with Nissan back in 2010. Nissan is reporting on my credit report that it was charged-off/sold or transferred, showing a ZERO balance, and closed. Just recently a collection agency, the agency who purchased the account, reported it on my credit report also. I was told to dispute it. I sent a debt validation letter, certified and return receipt, today to the collection agency. If they do not respond with the adequate information within 30 days, what are my rights? Do I send a letter to the credit reporting companies to dispute the collection agency so that it is removed? If it is removed, does that mean that the Nissan “charge-off” has to be removed also since they have the same account number? Thank you so much in advance for your help! It is GREATLY appreciated!!
David – In all likelihood your debt was legitimately sold to a debt buyer pursuant to your original contract having assignability/sale verbiage. Virtually all loan and credit contracts have them. The original lender is showing zero owed on your credit report, as they should. The new owner can report this, and with the balance owed to them, as they purchased your debt.
What is your goal with the dispute?
Debt collectors receiving your dispute, or validation request, are not required to respond within 30 days. And when they do respond, there is really not that much of a barrier for them to provide “adequate” information. But if they continue collection efforts before providing validation/addressing your dispute, they will run afoul of your rights found in the FDCPA, and perhaps state rights as well. But them not responding is not anything special. Happens all the time.
You can send a dispute to the credit reporting agencies to remove the collection item, but it may not be removed, and you should have a firm basis for your dispute. If a debt collector, or debt buyers trade line on your credit report is removed, it does not mean the original lenders credit entry should be removed.
Dear Mr. Bovee , can a scam fee recovery company actually recover $3,300 I paid in 2009 to help sell/rent my timeshare. I paid the $3,300 to a fraudulent timeshare rent/sell company.
I used a Capital One bank credit card to pay the fee. I did try to recover the money back in 2010, but was unsuccessful, as the cc bank took the money back after the charge back. The scam company produced the bogus contract I had signed originally, and showed to the bank and money was given back to them. Now 4 years later, I get a call from a recovery co. that says they can get that money back.
They will charge 30% of the $3,300, when I get the credit back into my CC account. I told them if the contract says “when your account receives the permanent credit” instead of just the “credit”, I will sign it.
Do I have a real chance of getting that money back? Or is this just another scam??
Ermel – I would have zero faith in the recovery company. What is the name?
Michael,
I just stumbled upon this awesome website as I was doing some research about old credit card debts and their impact on my credit score. Basically, we are looking to purchase a new home (after we sell ours which is currently on the market) and upon pulling my scores from each bureau they are all sitting in the 640 range. One of the loan options we are looking for requires a minimum of a 660 for approval and from what I am reading it seems the mortgage tri-merge scores may be lower than what I can personally get from the bureaus.
Before we officially apply I want to try and get my score above that 660 mark. We have zero credit card debt on current accounts but I have 4 accounts that were charged off in 2009 (loss of job, medical bills, etc.) . Anyway, I have been current on everything (1 mortagage, 1 car loan, 1 student loan, 3 cc’s with a limit of about $5,000 total) and I am struggling to see how much improvement paying off 4 c/o accounts, that are all 5 years old, can have?
Here is the information on the accounts that are c/o:
BOA – $6,927 – Charge Off
Chase – $1,294 – Charge Off
Discover – $2,997 – Charge Off
Verizon – $612 – showing as collections but there is no agency listed, just verizon
All 4 of these items show as scheduled to fall off the reports about this time in 2016.
My question is if I were to settle these accounts would it improve my credit score since they are so old?
Also, would any of these companies consider a pay for delete or is that just something I keep reading about on random sites and it really never happens?
Thanks for your time!
Mike
Mike – When is it that you are thinking of needing to apply for that loan product? I ask because approval could be contingent not just on the credit score, but also on any collection accounts being cleared up. I am seeing much more of that type of lender requirement these days.
How the collection accounts getting settled will improve your credit score will depend on what type of scoring is being used. A new model of Vantage score, for example, does not use paid accounts with debt collectors in their scoring model. FICO does use that info, but with different levels of impact, and with some time intervals that soften the impact (so something you can plan for/around).
None of the four companies you listed will play ball with a pay for delete strategy. What you read about as far as that even being an option is way over blown. It rarely is an option, and when it is, would not help the consumer much when there are multiple collection accounts showing from credit originators.
Michael,
Thanks for the quick reply. We are thinking about starting shopping in March. I am fine paying the debts off and plan to do that in the coming days (after reading everything you mentioned in this thread).
Based on your feedback it just sounds like at most I would get a small bump in credit score but my DTI will improve in the lenders eyes, is that correct? Any chance I pay the debts and my score goes down? Does a settlement vs paying in full make a difference in score impact?
Thanks again!
Mike T
Mike – Once debts reach this stage of delinquency, it makes little to no difference to your credit, whether you pay the balance off in full, or settle the debt for less. Having said that, paying the debt off in full, or settling, can cause a temporary drop in your credit score due to the newness being brought to a stale account. It is sort of a catch 22 where doing the right thing can hurt, but only temporarily. And where doing nothing could (and likely will), lead to a lender only approving your loan when the collections are resolved.
The DTI concern is very real too. Unpaid collection balances can be calculated into your ability to repay.
Given everything you have shared so far, if I were in your shoes, I would target settlements for the best savings, make sure the credit reports are updated to show a zero balance now owed on all collection accounts with all credit reports, and see where that puts you in 60 to 90 days relative to the loan product you are shopping.
Ok here is my situation… I had to stop paying on all but one credit card (the minimum is only $26 a month on the one I can afford) Bank of America is included in the ones I had to stop paying… I owe a little over $21000 I think to them. Capital one, GE capital (jc penneys) have all made deals with me to get me back on track but BofA will not help at all (I know they are not required too) the account will be charged off in a week in a half unless I pay $400 (I am currently around $3000 past due) my question is do I have repayment options with BofA after charge off or are they likely to sue? In the last 6 months I have paid little amounts here and there. Currently a settlement is out of the question… Any advise insight is greatly appreciated. Thank you
Bree – It sounds like you are trying to set up affordable monthly payments on all of your accounts. If you could get BofA to lower your monthly payment to roughly 440.00 would that work with your budget? Is the Bank of America account the only one of your debts (credit card or otherwise), not on a plan?
Unfortunately that amount will not work… I lost my job and was on unemployment for over a year (applying for more jobs then I could keep track of every week). My unemployment was stopped and it took a little over 2 months to get it straightened out. By then the damage was done. Bank of America would not make any agreements that I could afford. I also have a card at a dept store and my minimum on that one is $26 a month so it is the only card I was able to keep up on. I am almost caught up on the 2 cards that made agreements with me. I was able to secure a part time job but so far Bank of America will not come up with a number that I can do… I actually a Bank of America rep tell me that bankruptcy may be my best/only option when I contacted them last month. I’ve been trying for over 7 months to avoid going that route but I’m scared it might be my only option.
Bree – Let’s say the 21k with Bank of America could be negotiated and settled for 7 to 8k sometime in the next 12 or so months.If you are able to keep up with all other bills, and somehow develop a plan to come up with the money to settle the credit card with BofA (probably with a debt collector), you avoid bankruptcy. Alternatively, roll up all of those other debts in your bankruptcy and get a fresh start financially is appealing. If chapter 7 bankruptcy is an attractive path to you, and you are going that direction, I would want to start that right away so that my credit can begin improving sooner, and I could quit wasting my limited resources on paying the other debts.
I would also see chapter 7 as a last resort, and that if all other bills can be managed, I am filing over that 7 to 8k I reference above.
What are your thoughts given that perspective?
That is something to think about… In the beginning I was really worried about my credit score but now I’ve come to realize that my credit score is not my top priority if I can’t afford my basic needs… But I have another question you might be able to help with… I am married (since August of last year) and all the credit cards are only in my name. The debt is solely mine. I live in California which is a community state property. I know that I am able to file bankruptcy alone but I’m wondering if my spouse’s income is going to come into consideration. Without her income my income right now is about $10,000 a year. I have one car that is paid off (valued at about $3,000) credit card debt total around $34,000 and a car that is in both our names and we owe $16,500 (valued at about $10,000) We bought the car 2 years ago when we were dating. Any chance you have insight on how this might play out in bankruptcy court? If I file I want it to only be on me… Thanks for any info.
Bree – Talk that over with an experienced bankruptcy professional. Generally, total household income is going to come into the means calculation, and the car loan can be reconfirmed (keep paying the loan and driving the car).
I understand credit score and credit report concerns, but that should be much further down the list when dealing with debts that cannot be fully paid. I know you are realizing that, but for other readers, this report compares the impact of debt relief options to access to credit: https://consumerrecoverynetwork.com/credit-report-score-rating-debt-relief-programs/
Thanks for your input. After talking to BofA one last time and basically getting no where still I have no choice but to file bankruptcy. I feel horrible because every other card I have has bent over backwards to help me improve my situation and now they too will be included. I found a web site that had a “hypothetical” means test (with current information) and I entered in my income as well as my spouses. After the calculations it said our disposable income is in the negative which means I’m a candidate for chapter 7. Thanks again for taking the time to answer.
Your welcome. Do not fret over the other banks that were willing to work with you. All of them know that a percentage of accounts will never be paid. It is a cost of doing business to them, and calculated into their operations before you opened your account.
Back in 2008, I settled my credit card debt with BOA for approx $4K less than I owed them at the time. The good news is that it only shows on my Experian Credit Score, the bad news is it seems like I am taking about a 100 point credit hit from it. At the time my world was falling apart financially. Now things are moving well again.
My current scores are EX 630, EQ 715 and TU 721 from what I see after signing up with myFICO today.
I have a couple lates on an old Sears card that I opened in 83 and foolishly closed back in Nov. 2007. The BOA account is my second oldest account having been opened in 2000. My other credit cards were opened in 2011, 2012 and 2014.
So here are my questions – should I contact BOA and ask if I can reopen the account and payoff the $4K or just wait for the next 1+ year and let it drop off from the 7 year age? Is it even possible to reopen this type account?
Thanks in advance!
FRC – You cannot reopen an account with Bank of America that you settled like this. Even if you could, it would not change the credit report negative. You will have to wait for BofA to age off of your credit report.
It is a bit odd that there is such a large difference between Experian and the other two bureaus. Have you cross referenced that the contents of each credit report are identical in every way? It is also a bit unusual to have a settled, or even an unsettled, negative item on your credit report maintain its potency to drag down your credit score(s) this far along.
Do you have a specific credit goal you want to accomplish in the next year or two?
Thanks for the feedback. My goal is to purchase a home in the next 12 to 18 months.
I have been researching trying to understand more about my options to rebuild my credit score. And really BOA is the one item that I am uncertain as to how best to address. Yes, the BOA account is only reporting on my Experian report. It was dropped from the others over the past several years.
Knowing it’s only on my Experian report has made me cautious about what actions I take – not wanting BOA do anything that could result in reporting the trade line to the others (TU and EQ).
From what I have been reading – it does not sound like BOA responds well to Pay For Delete offers.
Any suggestions – or is just waiting for it to age off in the next 12 to 18 months?
FRC – Just from a credit score perspective, you are probably in good enough shape to get approved for a home loan with your current mid score. And certainly for an FHA loan.
That bank of America account is settled, and years ago now. It really should not be holding you back. Pay for delete with BofA is not an option.
I would encourage you to talk with a loan officer at your bank, or a local mortgage broker. If you already did that, and that is why you are focused on the BofA account with Experian, get some more input from someone else in you area. And be sure they do FHA loans too (not all do, and you will likely get a broader loan perspective).
everyone should be advised that ANYTHING you say on this website gets PUBLISHED on line for ever.. I am sorry I used my real name and I am sorry that I even USED THIS FORUM
Larry – Everyone should be aware that anything they post to the internet is public, not just on this site, but on pretty much any web site. Why did you expect anything different?
Having said that, I can and have edited peoples posts on request in order to protect their identity, or something else. I am very reachable and available to site readers by email and phone.
Would you like me to edit your posts to show just Larry, or LM (something else)?
Why are you sorry you ever came to this web site?
Okay, thanks a lot.
Yes, the BofA shows a zero balance on all three reports. The credit file on one reports shows the account went delinquent in 2005 as well as showing it again in 2006. But in between those time payments were made. But it probably does not make a difference. As for my credit goals. I just want BofA off my report. I want my score to be in the mid 800’s. I want my utilization rate to be 15%, half of what it should be. My utilization rate right now is not too high, but I want it very low, which is what I am working on, because I want to increase my credit limit on two of my cards by over 10k and in order to do this I know my utilization cannot be high and having BofA will not help, but I’ll see. Thanks again.
liddy – Okay. It does make a difference as far as having a legitimate dispute to get the item removed due to the age of the negative item. If the 2006 date you provided is the one you recognize as valid, you may have about 6 months to go for it to drop off your credit report.
It sounds like you have time on your side. Credit rebuilding can often be an exercise in patience. You have come a long way, with what I see as a short distance to go.
I don’t know; there might not be much more I can do, but any suggestions, I will certainly use.
Thanks!
liddy – You may be a bit early in your efforts, but the credit report showing the 2005 date that Bank of America was last paid could suggest otherwise.
It is normal for a debt collection agency/debt buyer like Cach LLC to show on your credit report in addition to Bank of America reporting a charged off credit card. The difference between the 2 negative items showing up for the same account is – if BofA sells the legal rights to the debt, like was done in your situation, the BofA credit report entry should show a zero balance owed to them, while the new debt owner can report the collection item and a balance owed to them. The fact you got a paid collection from Cach LLC removed is great.
Does the BofA account show a zero balance due with the credit bureaus?
A charged off credit card from a bank can show on your credit reports for 7.5 years from the date of last payment. If you stopped payments on your credit card in April of 2005, and never made another payment after that, it should of dropped off the credit report. If the last payment you made was November of 2006, the charged off account entry from BofA would likely drop off your report middle-ish 2014.
Paying Cach off for the BofA debt does not change anything with these dates.
If you are certain your last payment made to bank of America was in 2005 you could file a credit reporting complaint with the CFPB. If the last payment was that date in 06, look for that to fall off mid next year. If it does not, and if what you shared about all three credit reports showing that 2008 date, then you would want to get that corrected, and perhaps by filing the complaint with the CFPB.
Do you have a specific credit goal you are trying to reach?
Yes, on my credit report the first 30 day late payment was in 11/06. But I pulled up some old credit reports with BOA and one from 7/12 states that the first late payment was 04/05. At this point it may not matter because it seems the more I look thru all my credit reports, they all have different dates. My most recent report shows the first delinquency being 6/08. The BOA account was paid in full 5/09 to Cach LLC, which is Collect America. I was disputing CACH LLC/Collect America since they are a collection agency and it was finally removed last year, BUT it was the same account number as BOA and BOA is still on my credit report. Every time I dispute with the credit bureau or BOA my efforts always are the same. Account was verified. I have sent several notarized documents regarding this account. The final payoff went to Collect America/CACH LLC.
Like I said, Cach LLC removed the account of BOA from my report, but BOA still remains. I guess I just don’t understand that since the account Collect America had was BOA and BOA refuses to budge. So the tradeline of BOA was on my report twice. One with Collect America and one with BOA. Now I just was BOA on there. In 3/13 I spoke with a rep from BOA and told them my situation and the guy told me he would put in a request for deletion and it took anywhere from 30-60 days. I took his name and verified before we ended the conversation that he would submit the request for deletion and I hung up the phone hopeful.
Fast forward a month/30 days, I talked with another rep and they said they were waiting to hear back from the credit agencies. Finally, after waiting 60 days I called in and talked to a rep and she said a request for deletion was never put into my file and that the account could not be deleted. She said she saw were I talked to the rep in 3/13, but did not see anything about the account being able to be deleted because they were not allowed to do that. So, I was told to call the credit bureaus so they could remove the account because BOA said they could not do it; when I call the credit bureaus they said they could not remove it because BOA had to do it. See what I mean?
Hello,
I have a charge off on my credit report for Bank of America. Is there anything I can do to get this removed from my report. The account originally went negative in 11/06, and was paid in full since then of course. But, BOA is reporting now that it went negative in 6/08 on all three credit reports, when originally they were reporting 11/06. It’s been frustrating to say the least. I’ve written every letter in the book to BOA and the credit bureau’s to get this removed, but nothing. I wanted to know was there anything else I could do.
liddy – I do have some actionable feedback to offer, but want to be sure I understand what happened clearly.
It sounds like the first time you missed a payment to BofA was in November of 2006. What exactly happened after that? And how was the account ultimately paid off? What was the date of that final pay off? Did that payoff go direct to Bank of America, or to a debt collector?
Michael,
Here’s another question for you. What are your thoughts on the use of of a “pay for deletion” strategy with collectors? I have various small collection debts on my record that I’d love to get removed…(otherwise, they would all fall off within the next 2 years).
Not sure how much motivation they would have to delete, for example, an $86, 5-year old debt in exchange for full payment. I know I’d need the agreement in writing before paying.
Thank you.
Robert – Pay for deletion strategies are hyped up a bit on the internet, but they are just not that common. If you have small bills like the 89 dollar one that you are prepared to pay in full to resolve, there is not much harm in trying, but larger balances you are trying to get a reduced pay off for I would not encourage. You would be telegraphing an outcome you are after that can mean paying more for the settlement, or not succeeding with one at all.
Add to that the fact that pay for delete is just not going to work with credit card issuers, or large debt collectors and debt buyers that see credit reporting agencies as partners in their overall efforts.
Michael,
I have a charged off credit card that was originally with Capital One, but then was sold to Midland Funding. On 15 Nov 13, I paid off the account and should get a zero balance letter from them this coming week. Once I get it, what updates can I request from the credit reporting agencies in order to minimize their impact on my score?
– Capital One is currently reporting: a $0 balance
Pay Status: Charged Off; Last payment made in May 2008
– Midland Funding is currently reporting: a $193 balance
Pay Status: In Collection; Last payment made in Oct 2013
Thank you.
Robert.
Robert – Nothing should change with the capital one charge off reporting. If you agreed to pay off or settle for less with Midland Funding LLC, than look at your report again in the next 10 to 60 days to verify that the balance being reported as owed is updated to show zero.
Look at your credit reports again around mid to late 2015 to make sure that both the original creditor and the debt buyers negative reporting were removed.
**That was NY State Tax Dept**
Michael,
All public record entries were made in the state of New York. I spent a long time today trying to validate these items with their county/city clerk, NY State Dept, and even an attorney’s office. All indications are that they have the wrong guy in all three cases. I went ahead and disputed the three public records with TransUnion (via online) and will do the same with Experian later today.
The charged-off Bank of America account is actually still with them. Another account that I originally had with with Merrick Bank ($900, also charged off) was sold to DENOVU. I’m working with Freedom Financial to work out a settlement plan that takes care of both accounts, as well as the $12K I have on line-of-credit debt :(.
Can you tell me what the impact of having the three pubic records removed from my credit report would be? I currently have a very poor 561, but hope that will help me bring it up a little ASAP. Thank you again.
Robert – I would generally recommend disputing credit reporting entries in writing. If you cannot get them to correct/delete what is obviously not yours, the written disputes (send certified mail return receipt requested), helps to lay a foundation for any actions you may want to take later. For now though, if you stick with the online dispute format, try to take screen shots of your dispute process, and keep a note book near by with time and dates of activities, names of people and places you spoke to etc.
Getting those public record items that are not yours removed will certainly help your credit long term (less negative items, lower DTI calculations for underwriting and the like), but the removal of those key derogatory and public record items will not lead to any meaningful increase in your credit score right now. Until you settle those unpaid collections with Bank of America that are yours, and that fact is updated to your credit reports, your score will remain depressed.
Is the LOC with Bank of America too?
The LOC was originally with Merrick Bank, now sold to Denovu. The debt settlement company told me that enrolling into their program will have a negative effect on my credit record initially, but should improve over time as the debt is paid off. I’m enrolling on a 42-month plan to pay around $14K of debt. They also said that the individual creditors will likely not update my account as being settled or paid until after I complete the entire 42-month program. Why can’t they make updates after their respective accounts are paid/settled?
Will settling these accounts refresh them on my records in a way that extends their stay on there? I hope not.
Thanks. Debt buyers and debt collectors typically do not update monthly payments like your original creditors do when you were making timely payments. If the settlements that Freedom Financial arranges rely on long term payments to a debt buyer, it is common for the account to be updated at the completion of those payments. Many settlement plans do actually knock one debt down at a time, and that may be the case for you. That would mean your credit reports would be updated periodically with a resolved collection account.
Settling these debts will not refresh the limitation for them to show on your credit reports. Just be sure you review your credit report about 60 days after you complete a settlement to verify the account is reflecting the new status. Also be sure you check your reports at about 7.5 years from the time you first missed payments to Bank of America or Merrick to verify that not only their charge off entries are gone, but also that all other collection entries that are related to the accounts are gone.
Michael,
After closer examination of my report, I find that there are actually four public records…Here’s what the three companies are reporting:
– Equifax: No public records on file
– Experian: Civil Claim for $7,158, entered on 10/8/10
– TransUnion: Civil Judgement for $1,140*, filed on 7/7/09; federal tax lien for $5,646, filed on 4/7/09; and a state tax lien for $7,961, filed in 5/21/09
*Plaintiff is Capital One. this one might be mine, but not sure.
I am baffled by the other items and cannot understand how they got into my file.
The BoA account was last paid 10/16/2008 and it was last updated on 04/27/2009.
Thank you.
Robert – Those credit report entries that are not yours can be disputed. Check out this guide for more details: https://blog.credit.com/2013/02/a-step-by-step-guide-to-disputing-credit-report-mistakes/.
Not knowing if Capital One sued you (if that is indeed your account), is a problem. That would indicate lack of, or improper service. Where is that judgment from, a court in New York, or Florida?
The credit card collection and charge off with Bank of America would fall off your credit report in 2 to 2.5-ish years. The SOL in Florida to legitimately sue for collection is 4 years. You are passed that. When you go to settle this you will be in the drivers seat. Who is it that is reporting a balance owed to them on the BofA account now?
Michael,
Thank you for your insight. I have two questions:
1. My credit report is showing three public records which do not sound familar at all. They were all filed in the State of New York and appear as a federal tax lien, a state tax lien, and a civil judgement. I have never lived in the state of New York nor have I been notified of any lawsuits. In addition, I have filed my taxes and received a refund every year without the IRS withholding any funds because of these liens/judgement. I’m a resident of the State of Florida, which has no state state tax. My dad has the same first and last name as I have and he resides in New York (he”s a business owner). Is there a chance that our records may have been mixed up and that these are his debts?
2. I have a charged-off BoA credit card that was sold and now appears as two separate entries. I’m looking to settle the debt and was wondering when I should expect to have both entries removed from my record? Also, are both entries currently affecting my records?
Robert – It does indeed sound like you have a mixed file issue with one or more credit reporting bureaus. Do you have the same issues with all three agencies (Equifax, TransUnion, and Experian)?
Is the charge off credit reporting entry from BofA reflecting a zero balance owed? If it is zeroed, and the other entry for the same account shows a balance due, than you would be dealing with a debt buyer when you settle. The debt buyer will have no control over how BofA reports the charge off. The debt buyer will likely not remove any negative credit reporting, but is required to report only accurate and current information. When you settle with them, the account should get updated to show a zero balance owed. This will help you improve your credit over time.
When did you last make a payment to BofA on this credit card? That will determine when both negative credit reporting items will age off of the credit reports.
Question… been settling debt for a couple years now and have become accustomed to the 1099C’s and the filing. Last year recieved 2 for cards that were not settled, but the creditor decided to issue 1099C’s and simply write the amounts off.
Now, recently pulled my credit report and have a BOA card that says “Account Charged off / $X written off / $X past due, which is the same language that is listed on the 2 cards that I received 1099C’s on. However, I have not received a 1099C from BOA for this account (which the last report date on the report was 2/12). Is there a way to find out if a 1099C will be coming this year or if it is simply in someone eles’ hands?
Also, what are the ruls for the SOL if you move to a different state? Does the card follow the same SOL as the state inwhich the account became charged off in or does the SOL roll into the new SOL for the state I move?
I ask because the SOL here is 3 years which would mean 7/14 the SOL is reached but the state I am moving has a SOL of 6 years.
Greately appreciate any help in understanding what I can expect.
Paul – Charge off accounts will show pretty much the same thing in the credit report whether a 1099c is issued are not. Nothing about a debt owner forgiving debt and sending the IRS a 1099c shows up in credit reports.
I do not know of any way to contact Bank of America about whether they will issue a 1099. You may never receive one. Does the BofA credit report entry still show a balance owed to them?
You should speak with an attorney experienced in debt collection defense in the state you are moving to about the SOL implications. Generally, the SOL in the state you reside will be the test, because that is most often where a legitimate collection lawsuit would be filed. That said, there are nuanced ways you can use the SOL of a different state in defense of a suit.
Hi Michael, You are a breath of fresh air on this topic. The internet is just information overload. If you don’t mind reading my circumstance, I would greatly appricate it. My boyfriend had a BofA credit card that was charged off back in 2010. Based on his credit report, it appears his debt has been sold twice and now lies with a company called CACH, LLC. They have not contacted him, but he would like to take care of this debt once and for all. My question is, how do we start this process of settling/nogotiation/whatever you want to call it when they have not contacted him? Do you recommend that we start by writing a letter requesting validation of the debt? We are not on a time frame (i.e. not buying a house, not buying a car, not seeking a loan for anything). I have found several resources out there for sample debt validation letters, but they are all responses to the collector making first contact. After reading the posts above, I’m not even sure that is a good first step. Maybe calling them directly would be better? I know that there is probably nothing that can be done with the BofA charge off on his credit report, but if he can get this CACH company to state that they were “paid in full” or whatever the magic words are, that’s still better than nothing, right? Overwhelmed…I appreciate any insight you have.
Thanks for appreciating the site CO Gal.
If settling the BofA account with Cach LLC is the goal, sending a request for validation (at least at this point), would not serve a purpose. Making a call to Cach and starting the conversation with something like – “I fell on some tough times a couple years back due to the recession. I am not all that better off today, but I finally wound up talking to some family about my finances, and they encouraged me to look at what it is going to take to pull the pieces back together, or if I should just get a fresh start with bankruptcy. I cannot afford much, but I am curious to know what I could settle this account for. If it is doable, I could make an effort to raise the money” – or something like that.
With the account charged off by Bank of America already, getting the Cach credit report trade line updated to paid in full, or paid for less, is not of much/any consequence. Getting it to show a zero balance owed is the main thing, and they have to update any credit reporting to show accurately.
How much is the balance showing as owed currently?
What state are you in?
The balance is a tad over $11,000. The state he was living in when the debt was incurred was Illinois. Now, he lives in TX. Not sure if it makes a difference or not.
Is it possible that if he calls them and they agree over the phone to settle for less than the full amount, that they’ll turn around and send him a letter telling him they are suing him. The general gist of everything I’ve read says that you can’t trust these people at all and beyond that, they are devious and will even lie to you. I’ve even read stories of people calling them and thinking they had initiated things only to receive a letter saying they were being sued! Everyone’s circumstances are different, but that terrifies me!
In regard to the validation, I read somewhere else on the internet that even if you are pretty sure the debt is legit, that often times these kinds of companies don’t have the proper paperwork to validate it. From my reading, I think that Cach is “Junk Debt” collector…I’m guessing you’ve heard of them. I even read an article (https://www.creditlaw.com/debt-collection-methods/bank-of-america-and-cach-llc-involved-in-suspicious-debt-collections-happenings/ ) that talks specifically about these two companies during the time my boyfriend’s debt was charged off. If Cach cannot validate the debt, then my boyfriend has no obligation to them, right? They would then have to take the claim off of his credit entirely, right?
Again, your insight is immensely appreciated!
CO Gal – I would target roughly 40% of that balance as a settlement amount given the current info you have shared.
I asked about the state to determine the SOL for a legitimate collection suit to be filed. Texas is 4 years. You mentioned the debt charged off in 2010. Charge off on credit card debt will typically occur no later than 180 days of missed payments. The account may already be passed the SOL depending on when the last payment was made to BofA. I would want to know if the account is passed the SOL, and then would target a lower settlement percentage, or just let this go and wait for it to age off of the credit report in another 3 or so years (but it could prevent qualifying for certain loans due to a skewed DTI – like a home loan).
There is much spilled virtual ink about debt collection on the internet. I find most of it to be not all that useful. The post you linked to has information, but it really would only be helpful to know if Cach LLC sued on the debt. If that were to happen, there are strategies to deal with it, and some really great resources to connect with in Texas. Let me know if that happens.
There are debt collectors and debt buyers that you absolutely should be careful dealing with. Cach, in my opinion, is one of them. But some of the accounts Cach places out for collection land with collectors that do not play games, and are just as interested as you are in working something out. I could not comment further without knowing who the account is with. Here is some more info about Cach: https://consumerrecoverynetwork.com/question/debt-collector-michael-sipes-cach-llc/
As far as obligation for the debt goes – Bank of America legitimately sells and/or transfers legal rights to accounts they charge off. It is normal. There is a tendency for some to take a position that they are no longer obligated to pay, or owe the debt, when it is sold. That is not true. The debt does not go away. But if someone cannot, or will not pay it, the debt will eventually cross over the SOL to be sued, followed by the 7 to 7.5 year SOL for it to fall of the credit report.
You can dispute the credit report entry from Cach LLC directly with the credit reporting agencies. But I would not try that unless the SOL to be sued has passed. I do not think you will be successful in getting it removed (debt validation of a legitimate debt, and credit reporting disputes are different things).
I’d like to add that my CITI card/account isn’t even listed my credit report from the big three credit reporting bureaus. Additionally, nothing has been paid on that account in more than 8 months, so I should assume it’s been charged off, correct?
More info: My credit reports show that none of my accounts have been turned over to collections agencies.
Citi will have charged off the account at this point.
Not all debt collection agencies or debt buyers send information to the credit reporting agencies.
Yet another Michael here with a question 🙂
I have outstanding debt with 4 different credit cards and had to stop making payments when the minimum monthly payments reached more than 50% of my salary.
Three of them have been charged off as of this month (roughly $500, $750 and $4,800, respectively). The other one is the largest, CITI, has a balance of $36k and has not been charged off. Additionally, the “lovely” people at the office of John Frye in Virginia have been calling me 10+ times a day to try and collect the CITI account–including calling my employer (in addition to my direct work line and cell phone) to reach me.
A few questions:
1) What actions should I expect from debt owners that have charged off the cards (Discover, Capitol One and Chase)? As another Michael mentioned, I too am in a state with a 4-year statute of limitations, but I’m not anticipating any major purchases such as a house or car for many years to come.
2) What advice might you have in dealing with the CITI account and the John Frye collectors? (I’ve read online that typically sending a debt validation request to Frye will get them to stop trying to collect, or they won’t respond in the legally required 30-day period, because they often do not have the official ownership of the debt in order to collect–still don’t completely understand that.) Have you an idea as to the % of the amount owed that CITI may be likely to settle for in the current economic climate?
My wife has been unemployed with no income at all for 5+ years, which is one of the main reasons I’m in this situation, and had an unexpected medical needs that cost a couple thousand dollars. Note: Her name is not on any of the accounts and my name is not on the house (which she owns outright).
I’ve spoken with a bankruptcy attorney and of course he thinks that’s a good solution (it means business for him, after all). But I see that as a last resort.
Thanks in advance,
Michael III
Michael – 10 collection calls a day is harassment from the John Frye debt collectors. My first suggestion would be to speak with an experienced FDCPA attorney about your options for holding them accountable. That won’t help with the underlying debt, but it would help nonetheless.
Current Citi bank settlements can range between 35% (seldom), up to 55%. The collector involved at this point can impact what you settle for. Lets say you split the middle on your settlement. What are your timelines for coming up with that amount of money?
Regarding the other 3 accounts, Chase settles the most favorably, while Discover and Capital One are more aggressive. Capital One will even sue for less than 1k debts. Read this article that ranks your banks for debt relief. All of the settlement targets referenced will still apply to you based on what you shared so far – other than the Citi credit card with Frye.
Bankruptcy can be avoided, no doubt. But it is a good idea to calculate the costs of doing that. Right now I would estimate that cost at about 18 to 20k.
If you need help locating an experienced FDCPA attorney, send me an email with the name of a nearby larger city (email the address you get these comment notifications from). The type of attorney you want to speak with about this typically offer a free consult. If you do work with them on any FDCPA violation they tend to not charge you anything, as their fees are paid by the other side.
Curious: Do you have any accounts with Bank of America?
Michael B., thanks for the quick response and information. I do not have any accounts with Bank of America and my banking for the past year has been through a credit union.
It’s good to hear that Chase settles favorably since the $4,800 one is with them. Discover and Capital One are the small ones ($500 and $750).
The John Frye calls are quite the spectacle. You get the full spectrum of “good cop/bad cop.” After the threatening-sounding messages are left (and you don’t reply) then they have a calm person try. I’ve read that by contacting Frye’s partner (Michael Katzen) and citing potential legitimate bar complaints, some folks have in the past year successfully worked out a 10% deal. (People on the net say Frye’s side of the business “slums” the debts while Katzen is the more legitimate lawyer.)
I can’t afford any bulk settlements–which I’d previously thought was the only option. However, knowing that monthly installments can be an option helps a bit. Regarding CITI specifically, if they settled for 40% I could pay it off in 3 years, without crippling my life (just making it difficult).
The bankruptcy attorney I consulted with gave me an estimate of around $2,800 for my specific case. But I have concerns with how they can take anything you inherit (up to your debt) if you are left anything in a will within 180 days of filing bankruptcy. I’d be crushed if a family heirloom vanished because I filed and a relative passed away in that time.
Anyhow, I see on the credit reports that due to the charge offs, my credit will be scarred notably until 2020 already and bankruptcy would only be 3 additional years–and would open up more options for credit going forward, knowing that no other creditor gets “first dibs.”
Should I first discuss the matter with the Frye people to see what can be done with the largest debt and then gauge what’s feasible?
I’ll follow up via email regarding finding an FDCPA lawyer.
You are going to be hard pressed to get a a 40% settlement with 36 months to pay on the Citi account. When I see something like that it is with one of the larger and more established debt buyers.
Regarding bankruptcy: What I know of your situation, and were I in your shoes, I would be looking at:
1. Get the bankruptcy over with as soon as possible.
2. Resolve all smaller debts via settlement, and only file BK if sued on the Citi account.
Talking with the Frye firm is a next step, but the current aim of 40% with 3 years to pay is not a realistic goal. But you could get a more pliable discussion going if FDCPA violations were brought into the picture by a skilled attorney.
What do you think is the likelihood of CITI bringing suit? How typical is that?
Michael – This is a difficult time in the collection of debts to answer your question with confidence. At one time Citi was the most likely to sue (not too many years ago). That changed recently to unlikely, and now with some signs of uptick, but not enough to say the trend and policy has changed. There are huge increases to being sued if Citi sells the account off to certain debt buyers, like Unifund.
Dear Michael,
I recently found I had a $42,000 debt to BOA when I tried to get prequalified for a loan to buy my family and my first home. I have never had a BOA account ever! I do share the same name with my father and obviously for a time the same address. I believe my stepmother had the account and my father was an authorized user on her account. Is it possible they connected it to me for sharing the same address and name and not go by ssn#?
I have sent a dispute online to equifax and nothing has happened, but a few automated responses. Can you please tell me if it would be better for me to go in person to a branch of BOA and speak with a manager or write a letter? Does BOA have the ability to help since they filed the debt incorrectly to my credit report, or should I just persue equifax? Any info you can send would be greatly appreciated!
Rocky – Is Equifax the only one reporting this, and not Experian or TransUnion?
Yes, it is unfortunately all too possible to have a mixed file like this occur. You should definitely dispute the account as “not mine” directly with any bureau reporting it. You should also copy Bank of America with your dispute. I recommend you send your dispute in writing certified mail return receipt. Keep a copy of your letter and the returned green card. Depending on how both BofA and the credit reporting agency responds, that may come in handy.
If you do not get the correct result from your efforts on the first try post a comment update here and lets go from there.
QUESTION: if the credit collection company files a lawsuit BEFORE the statute of limitations runs out.. AND AFTER the statute runs SERVES you.. is it still a time barred debt? .. can they still get a judgment against you? (supposing you show up in court and contest the suit, as a time barred debt?)
Larry – Generally you need to be served within the SOL. I would speak with an experienced debt defense attorney in your state about this in order to get an answer you can be confident with. Most of this type of attorney will offer an initial consult for free, so no reason not to make the call.
Be certain you participate in the court process. This means answering the complaint etc.
Is this a Bank of America credit card that was sold to a debt buyer?
yes I believe so, FIA card services (don’t know who they are, but I am told that they are bofa. They sent me an “affidavit” and no original papers. I sent the second letter, and they have not responded ..yet. The kicker here is that I “think” BofA bought out MBNA, who bought out Chevy Chase VISA.. this goes back (I think) .. to 1987.
Here is my idea: I challenge them on the original documents. They cannot produce them. I dispute the credit agency filing with this fact, saying that they have not been able to produce the original paperwork, and therefore the debt is not valid. Would this then result in the credit reporting agency DROPPING the creditor from my credit report. ???
I was reviewing my Credit Report and noticed a concern. As 99% of the rest of the world does, i googled to see how i should proceed to correct my issue. I’m hoping you can provide some tips but ANY information/advice will be greatly appreciated. Here goes…I had a BofA credit card in 2004. Due to a car accident in 2008 i racked up 5084.00 on my cc. I was able to pay the minimum in the begining but then fell behind with all the interest. I offered to pay the debt minus the interest. BofA was unwilling to work with me with payments to the point they didn’t even want nothing less than my minimum due (very aggravating). So simply said the account was charged off in May 2009 to a differnt bank/agency. At this time, the new agency was willing to work with me and i started a payment plan. I was paying on-time so it was a big surprise when i was then contacted by a collection agency saying they are now handling my account. So i started another payment plan and was out of debt by late 2010. I know i should run my report every year but i didn’t. Well now i want to purchase a house and i knew BofA was going to appear. It shows the two collection agencies with the statement “paid in full, 0.00 balance” but BofA shows “CLOSED, 700 past due since May 2009”!! Do i still owe this when the account was “charged off”? How do i go about correcting this? Do i contact BofA or dispute my credit report via NCAC? Also i had to claim the difference of the settlement offer (1000.00) on my taxes as additional earned income as well. Again any help or advice you provide is greatly appreciated.
Sally – The negative reporting as a result of the missed payments and the account charging off will remain for 7.5 years from the date you missed those payments. The means the collection accounts AND the Bank of America account will fall off at the same time. The 700 dollar past due sounds like what typically shows as the payments you missed back in 2009. But if there is indeed a balance showing due of 700 (not the amount you were late), you can dispute that off.
Paid collections will have varying degrees of impact on your credit score. 24 months after the debts are shown as resolved is a great benchmark to figure into fairer priced loans and credit products. This of course assumes all other credit reporting items were kept current, no late pays, credit diversity etc., remained consistent.
See this report about taxes on settled debt,
*Does the fact that I entered into an agreement to have my credit cards cancelled, and pay a monthly amount at a reduced interest rate.. CHANGE the date for the statute of limitations?
*Does the debt get classified as a different kind of debt? , and therefore subject to a different statute of limitations?
Larry – Did you enroll in one of the Bank of America hardship repayment plans? When did you drop off of the plan or begin missing payments? Typically your first missed payment on the credit card will begin the SOL.
Entering into a reduced payment plan does not classify the debt in a different way. What are your goals with this account? What are your concerns around the SOL and classification of your account>
Yes.. I signed 4 credit cards in june of 2009, into the hardship program (bofA.. 2 chase cards and hsbc).. so I had 4 charge offs and the last payment was in august of 2009. I want to run the SOL.. and then call them and make a deal … and clean this up.. (can’t remember if it was august or sept. .pretty sure aug.. I will check my credit report to find out, however the credit report is NOT clear or easy to decipher).. I REALLY appreciate having someone to talk to about this.. can’t thank you enough.. Larry
Thanks for the additional detail. So you are hitting the 4 year mark since you last paid on the credit cards. Are you in a state with a 4 year SOL on credit card debt (unsecured revolving open accounts)?
At this stage you will be dealing with debt collectors and/or debt buyers. Negotiating settlements right now, or after the SOL expires, will not change the savings much (depending on who has the accounts). If you are ready with the cash resources to knock them all down, you could do that inside of a month if you wanted to.
in Utah.. one of the cards collection companies sent me a letter.. and I am responding with a request for all documentation.. I have been told that after the 4 years they can still try to collect.. but they cannot get a judgment.. I have been living without credit. and am getting good at it… I still have an address in California.. and plan to go back there shortly.. my residency is not fixed.. I have both… I will be ready with cash in about 2 months.. just want to make sure if they serve me.. that they cannot get a judgment….
Larry – Okay. 4 year SOL for both. If you are served before the SOL expires they could still seek a judgment. If served after the SOL passes you would still have to file and answer and defend the suit to the point of getting it dismissed for being brought passed the SOL.
I like your plan of requesting validation with only maybe a month or 2 left on the SOL. If it is a debt buyer you are hearing from on the collection, you will have a better shot at deferring collections for a bit, and then circle back to settle with much less pressure.
I am from California working in Utah and back and forth so much that even I am not sure where I am from anymore… both are 4 years. Negotiating is one thing.. my hesitation is that I don’t want to incur any judgments.. so I want to sail passed the SOL date. then in a couple of months when I have the cash.. settle.. I have become accustomed to having NO credit..
At this point I feel that I will have the bargaining hand… they all jacked up my credit cards to 30%.. I had NOT missed a payment in 30 years.. kind of like taunting me to fail.. were the big banks betting against me? not happy with the entire scenario… all good credit got me.. was to make me a target for unscrupulous credit mongers..
I hear ya. Credit is a utility that can turn into something more like a noose rather quickly. Once you get to the place where you are ready to negotiate the deals, locate the debt collector or buyer you are dealing with using the search box at the top of the page. You should be able to find a page with a current discussion for dealing with them. You can post comments and get feedback for each.
Micheal,
Where do I start??? I have two accts with B of A that total 41k. We were charged off on both about a year ago. We didn’t hear a thing from them. We are looking to buy a house within 6 months. I can’t purchase as I had a short sale last august. About 5 months ago We were recommended to establish a payment plan so the underwriters can see a history of payments with B of A. We set up 100 payments interest free. Unfortunately with these payments my wifes DTI is too high. I called them today to see about a settlement. I was offered one at 60% and I declined because I couldn’t make that work. I asked how low could they go and I got a 57%. Which is still too high. I said that I was looking for a 30% range. And they said no way. I got the feeling that it was friday night 10 min before close and she wanted off the phone.
Should I cancel my payment plan and see what happens next? Do I let go to a third party?
Thank you for time
St
st – A good amount of underwriting on home loans use Fannie and Freddie criteria. You may not qualify under that structure this soon after a short sale. And I sincerely do not think paying 100.00 a month on balances that size is doing anything for you. Who was it that recommended you take the course you are on?
I am confident you can do better than the 57% settlements. Are you prepared to fund lower settlements in the 30% range right now, or would that take you some time?
Michael,
Thanks for your reply.
To clarify, We are making 100 payments @ 410 monthly. The short sale is in my name only and my wife is on the BAC accounts as a joint acct.
We are trying to qualify for the house using my wifes income only. Thats why we need to get the BAC accounts settled to free up the DTI ratio.
If we were offered 30-35% we’d be more than happy to settle. As I said They said no way to the 12k I offered them on friday.
What should the game plan be???/
Thanks
ST
ST – You have an interesting situation, but one that is navigable if you allow for some time in order to achieve your goals.
100 payments of 410 at zero interest would not be a program set up directly with BofA unless this is some pilot test program. OCC guidance on these reduced payment plans on full balances are not allowed to be designed to last more than 60 months if the accounts have not been charged off. Who was the plan set up with/through? How many payments into the plan are you right now?
If you can answer those questions, I can reply with more useful feedback.
Michael,
The accts have been charged off. The are with the internal recovery dept.
We are 5 payments in at this point. But we need to settle ASAP
Thanks
St
Okay. Here is the catch 22. You need to settle to get the DTI in line, but also need to stop paying in order to get the amount you can afford to settle for to get through the system. WIth the account already reflecting charge off on your wife’s credit report, there will not bee too much more damage credit score wise, but there may be some. Working with internal recovery after charge off will not be like waiting for 5 missed payments to settle at the best rate with Bank of America prior to the account charging off. You will need to miss one or more payments to get to the settlement you need. And you may not reach that settlement with the Bank of America recovery department. It may be reached with an outside debt collector. That will not necessarily be a bad thing – just a different thing.
Is 60 to 90 days ASAP enough?
Michael,
60-90 will work. What else should I do besides ending my payment plan?? How often do I contact them to seek a settlement etc.???
ST
ST – If it were me, and I could fund the targeted offer right now, I would be proactive by calling out every couple weeks. I would also recommend you work one on one with a pro to guide you through the process. You can call in and consult with a specialist I recommend on the site and learn more about the value of that type of guidance at 800-939-8357 ext. 3. Knowing what to do, what to say, and what not to say in your negotiations, is a good resource to have.
Bank of America sent me past due account to collections in June 2013. About $13,700. The calls from collection agency GATESTONE have just started coming in. How would suggest I handle? I can come up with about $4k cash for a lump sum, but I don’t think they’ll settle it for just $4k. I am fully employed, but income is off 40% the past 8 months. Got behind on payments and rest is history.
How to settle BOA debt – sent to collections
JM – 4k to settle that Bank of America balance is not out of the question. A more realistic expectation would be anywhere from 500 to 1500 more.
You would call Gatestone and let them know you never intended to fall behind, but your income was cut in half without warning. You have tapped every resource you can and can maybe come up with 3600.00 if the account could be considered done. Don’t talk in percentages, Just round dollar figures. Do not expect to hear yes on the first call. You could expect to hear a counter offer. Do not agree to anything. Just that whatever number outside the realm of your ability will be impossible to come up with. Do not expect to get this done in one phone call.
Do not go into much detail about your finances. If the call goes in any direction you are not comfortable with, come up with any excuse to end the call (someone at door, son or daughter calling etc).
You will want to read about getting settlement letters, and how to pay settlements.
Do that and lets go from there.
I spoke with GATESTONE / FIA Card Services and followed your directions to a “T”. I said, “Never intended to fall behind – income is cut in half without warning. I’ve tapped every resource to try and keep up with payments. I can maybe come up with $3,600, if they account could be considered done.”
The rep drilled me for personal financial information. I provided none. He kept saying that he needed it as leverage in order to submit the $3,600. I held strong and provided no personal financial information – stating repeatedly that all I have to say is what I’ve already said. I then repeated myself several times. He finally stopped asking the personal financial questions and then played a pre-recorded 1099C recording and said that he will let me know if they can accept the $3,600 as settlement. He also asked me several times I would simply go back on the payment plan and I said NO. He also asked me how quickly I may be able to come up with the $3,600. I said, “I’m not sure – maybe 14 days, and that’s a maybe.”
The difference of the settlement will be reported to the IRS as income, correct? 1099c form will be sent to me and I will then be responsible for taxes on that difference, correct?
Thank you in advance for your continued assistance. I greatly appreciate your knowledge and correspondence.
JM – I posted the above comment for you. Sorry you had difficulty with the site. Thanks for the update. Stick to your guns. Follow up in a couple days if you do not hear back.
See this report on how you may or may not owe taxes on forgiven debt when settling. The 1099c being sent to you and the IRS by the creditor/collector is real enough. How you calculate if you will owe tax or not is simple to determine.
Please do keep me posted on how this turns out.
Hello Sir my question is I did a Short sale almost two years ago about $70000 was charged off by BOA and is showing up on my credit as a charge off I would like to possibly negotiate with BOA to offer a settlement for maybe 5% of the balance to get the charge off, off my credit I don’t know what Dept to contact because the short sale Dept is saying they have nothing more to do with it and the Cust Service Dept is telling me to contact the Short Sale Dept it’s a big run around can you please advise me on who I can deal with in regard to BOA any help is appreciated
Cornell – If your goal and purpose for settling is to get the charge off Bank of America is reporting to the credit bureaus removed from your report, it will not happen. If the goal is to settle in order to get the amount to reflect a zero balance owed in order to improve the DTI on your credit report, and make progress rebuilding credit from there, that would be realistic.
5% is not a typical settlement to get approved. Was there a promissory note signed for the 70k in order to push the short sale through?
To the best of my recall B of A had me on a 60 month program and before entering the program some late payments plus introductory rates ending had me at 29% I think. So, needless to say, things were getting out of hand at an alarming rate. Presently the interest rate is 4%. I would love to settle the debt but have no one who could lend me 4,000, so don’t feel that option exsists.
I have considered going bankrupt but talked to MMI today and they advised I go ovr my budget with them and take another look at my account.
I think I’ve been considering allowing the one account to discharge to free up some money and then to hopefully have time to regroup and repay that debt at a lower monthly amount. What I’m trying to understand is would that just be creating bigger problems in the long run? I would like B of A to lay it out to me, as in “we discharge this debt and so and so collection agency will soon be calling”. But I know the people who answer the phone for B of A are instructed to encourage me to make that minimum and not abandon the account and then they move on to the next guy. As for MMI my guess is they prefer not to advise me to allow the discharge even if like you mentioned, they could eventually help me work with a debt collector. Or maybe they are all giving me good advice, to somehow make the payments?
Debt is a nightmare, but there are times I wonder do I opt to finally pay my dentist some money and buy my kids some things they need or do I try to keep my already bad credit from being worse?
Carolyn – Thanks for the additional info. At the current 4% interest rate BofA set, and when contemplating paying the balance back, the monthly payment is not going to get much more affordable. 4% can only be lowered to zero percent and the balance amortized over 60 months in these creditor direct repayment plans. Those are parameters set by bank regulators, not bank of America or MMI.
Letting the credit card with BofA charge off and hit the collection pipeline can create bigger problems in the long run. But those issues can be managed along the way. It is not so much the issues down the road I want you to think about (though you must), but the affordability of what you are doing now, with this, and other debts.
I want to encourage you to read a couple of articles that will give you a bit more perspective on what happens with the BofA account if it remains unpaid, and also consider the affordability of the path you are on, along side the short, mid, and long term impact to your credit (and access to new credit products).
What type of debt relief can you afford – This brief exercise will help you understand if the path you are on now is mathematically sound given your income and budget.
What banks do with unpaid credit cards. This is the stuff Bank of America is not laying out for you clearly.
Solutions for debt and access to new credit. Surprisingly few debt relief service providers will lay out the facts of credit scoring and access to credit in the way this article does. Compare your future credit goals and needs with your income after reading this. Credit scores bounce back, and your debt load can prevent you from getting any new credit just as much, if not more, then a lower credit rating will.
Paying back your debt is always sound advice, but only when you can afford to. Not being able to pay the dentist, or provide basic necessities like shoes for your children (whose feet seem to grow out every week – been there), suggests you look for other ways to trim the budget, and if no wiggle room exists, consider alternatives to the debt management plan you are on.
Post any questions or concerns you have in the comment sections of each of the above linked articles, or return to this one and post them here.
Hoping for some help please! I have been in a debt management program and half way through. Before I signed on with MMI I had two accounts with Bank of America in a debt program. When MMI created my program with them I didn’t realize B of A wouldn’t accept the terms because of being in a program with them already. So, B of A declined the offer but I had MMI continue to send them money as it was all I could afford to do and figured better to keep trying. Presently one account is in good standing but one account for roughly 13,000.00 will be 90 days past due if I don’t make up the minimum payment. I have been told this would lead to the debt being discharged which they told me would be very bad. I am making my payments to MMI by what feels like a miracle each month. I understand the mark against my credit the discharge will be but I am not going to be buying I home as I am very lucky to eventually be inhierting the house we now rent. I don’t plan on using anything but my debit card for purchases and we buy old, used cars so don’t see new car payments in the future. My question is, should I let that account go the route of being discharged? I know it could be sold to a collector and that I would enter into paying them but could that be under more affordable terms? Can they charge interest and can they garnish my wages? I live in California by the way. To pay 500 less to MMI for that B of A debt would give me some breathing room I must admit. I would like to pay my dentist some money and buy my kids some shoes!
When I talk to B of A or MMI I come away more confused and need some facts from someone unattached to either enity please! Your help deeply appreciated, thank you!
Carolyn – It is a fairly consistent policy for bank of America and other card issuers to not offer monthly payment reductions through consumer credit counseling agencies, like Money Management International, when the bank has already enrolled you directly into one of their internal plans. Couple questions:
Is the lower monthly payment option Bank of America set you up with internally temporary, or were you told this could go for the life of the balance at a fixed monthly amount for 60 months?
What was the interest rate on this BofA account prior to agreeing to anything else direct with BofA?
What was the interest rate reduced to in the plan?
If you let the 13k account with BofA go unpaid for a few more months it will charge off and get dropped into Bank of Americas collection pipeline. That means your account will either be assigned out to a contingency collector, sold to a debt buyer, or at some point sent to an attorney for collection. You will have options to resolve the debt along the way, or get with MMI to see if the debt can indeed be folded into your debt management plan with them once you know where the account is placed. Contingency collectors and debt buyers (even collection attorneys in some instances), do set up affordable monthly payments long term through credit counseling agencies.
You can also look to settle this account if it is not rolled into your plan. I would target about 4k for the settlement. If you can tap a friendly resource for that, it is something to consider a couple months from now.
I should point out that your being in a position where your DMP payments are being met monthly, but you are unable to afford basic necessities, suggests you could be one hiccup away from not succeeding with the repayment. Have you looked at all of your alternatives?
Hi Michael (so many Michaels on here is getting a bit confusing),
Few things here. First and foremost, I appreciate your replies to the comments as well as your original article. Very helpful.
I’m in the process of re-building my credit after a recent apathetic approach to my credit and election to live with cash. I was recently added as an autorized user on an account with an $18k limit and $400 balance with 15 years of on time payment history. Unfortunately, it only raised my credit score one point and now has one of the reasons for my score being that I have recent accounts opened. Does this make sense? One point seems a little low for the kind of account history. Would being added as an authorized user be classified as a new account? No other accounts have been opened for at least three years.
Also, I have a BofA credit card that was charged off early last year. I checked my score today (as I do almost weekly) and noticed that the ONLY change was BofA changing the remarks from charged off as profit and loss to charged off purchased by another lender. My score somehow dropped 42 points because of this change! How could this be?! The balance now shows zero (I understand because it was sold). Is it the update that’s making it look brand new again? Very frustrating when I look forward to tackling this issue. From reading what others have had to say it’s going to prove very difficult to do anything but settle and wait the remaining 3-4 years for this to fall off from reporting. Ouch.
Any tips, advice or insight. FICO isn’t exactly a company you can call and complain to and there doesn’t seem to be much outside of hiring an attorney to explain this stuff.
Thanks in advance,
Michael
Michael – It can take 6 months to season a new entry on your credit report. That is not what is dragging you down though. The recent Bank of America credit card charge off is what is killing your credit. I want to be sure I understand what happened to you. Your comment reads like:
Credit card with Bank of America charged off in January of 2012.
Nearly 18 months later an update of that account shows up as having been sold to a debt buyer.
Is it the debt buyer reporting a new entry that you are looking at? Is there a debt buyer collection entry on your credit report? If so, who is it?
Settling a collection account and getting it updated on your credit report as zero balance owed does not mean another 3 or 4 years for your credit score to improve. Far from it. You can have far better success than that.
What is the balance owed on the account? Who owns it? What is your score now? What credit goals do you have for the next 24 months?
Side note: Most attorneys are not versed in credit reporting. Hiring one, unless they are an FCRA expert (very few focus on this area in their practice), would be less than productive.
Hope this works when I post it. You can see I ran my report on 5/22 and then 5/29. As I mentioned this is the only change in my report but my score went from 638 to a 596! I don’t know who bought the debt and they have not posted anything on my report to date. The account originally charged off just over a year ago. They apparently updated in November and again this last week and it seems to be hurting my score each time.
Do you have any information about my authorized user account moving my score from 637 to only 638? If you prefer, I’m happy to directly send you screen shots of my TU report. Thanks for the help. Can’t tell you how much it’s appreciated!
BK OF AMER Old – 05/22/2013 New – 05/29/2013 Comparison
Account No.: 73** 73**
Condition: Derogatory Paid
Balance: $1,946 $0 (-$1,946)
Type: Credit Card Credit Card
Pay Status: Collection/Chargeoff Collection/Chargeoff
Past Due: $547 $0 (-$547)
High Balance: $1,946 $1,946
Terms: — —
Limit: $1,500 $1,500
Payment: $0 $0
Opened: 10/05/2005 10/05/2005
Reported: 11/14/2012 05/20/2013
Responsibility: Individual Individual
Remarks:
Charged off as bad debt
Profit and loss write-off Charged off as bad debt
Purchased by another lender
Late Payments (last 7 years):
30 Days Late: 0 0
60 Days Late: 0 0
90 Days Late: 0 0
It can take some time for the addition of the new account you are authorized user for to have an impact. That impact is muted by the charge off. It would have been better to have resolved the unpaid debt with Bank of America before adding the authorized account, or to have resolved it with the debt buyer that will likely show up in the near future. You would then better be able to gauge the full benefit. You are set with a scenario where your credit can recover more rapidly, but not until other fresher negatives take on a more stale and aged affect.
If you would like to try to avoid the debt buyer showing up on your credit report as a fresh negative, you can call Bank of America and inquire as to who they sold it to. Then work out a settlement and pay it.
You can enter the name of the debt buyer in the search box at the top right of this page and likely find an ongoing discussion you can add to. If there is not a page dedicated to the collector/buyer, you can start one by using the “ask Michael” link at the top of the page.
Michael – Brilliant. Thanks a million for the replies. One question remains regarding my BofA charge off. I verified that it originally posted in my credit report in December of 2011. How could the update this past week seem to refresh the charge off and impact my credit as though it were a very recent charge off? Thanks again.
It could be that because Bank of America just recently sold the debt, and updated the reporting to reflect now zero dollars are owed to them (which would be accurate and required reporting), also adding the fact the account was sold off to a factoring company with it, hit you with the “freshy”.
So my score can diminish each time they update the information? The purchasing company of the debt has yet to post anything to my report. To my understanding, when they do it can’t pull my score down because it’s for the same charge off. Seems like I’m being punished repeatedly for the same charge off that originally impacted my score negatively in Dec 2011. Is this a situation you would recommend contacting a consultant? Thanks. I’m glad I discovered this site. There is a lot of beneficial information in its contents.
Pretty much. The new information is showing that Bank of America made a debt sale, and with that comes a certain amount of freshness to what was already a bit stale – depending on how long ago the charge off happened.
A new collection item is… new. Its fresh. This can, but will not always, impact the credit score. When you settle a negative trade line it also brings freshness and a brief, but often minor, credit score drop (though this will no longer occur with the new Vantage score model rolled out earlier this year).
Yes, you are continually hurt by a charge off. I have written about the “double jeopardy” aspect of collections and credit reporting in the past, but for other sites. It gets worse with what can be viewed as “triple jeopardy”, which is when someone is sued for collection – judgment entered in court record – data miners pick up the judgment and report it to the major credit reporting agencies where it becomes part of your public record section in your credit report (a whole new 7 year reporting shelf life too). All from the same credit card account that went unpaid.
Whether or not you need a consultant to help you accomplish your goals can depend on what you are looking to accomplish and how soon. I can help you get where your going with general information and specific tips for each creditor or debt collector you are dealing with – right here in the comments of this and other pages of the site. But generalities are not always what is needed, or are they going to catch subtleties of your situation and goals that working one on one will help to maximize results. We do offer access to work one on one with a specialist to help you get where you are going. Its affordable, and you get to work with someone just like me. Call in for a consult to learn if there is value for you: 800-939-8357 ext. 3
Michael,
Great to speak with you as well. Your input was very well received and I’m putting all of the pieces together and will be ready come June.
In the mean time, I have a couple more curiosities if you don’t mind?
Hypothetically speaking, but knowing my primary goal and assuming I am successful in reaching an ideal result. In the 6 months or so that it may take to re ailigne my credit, would having a friend or family add us as an authorized user help in building things back up?
Also, are medical collections ignored when it comes to mortgage underwriting?
Again, I cannot thank you enough for your time and professionalism.
Mike – Adding you as an authorized user on a long established, higher credit limit, low balance owed type of card has proven to be a good method to either help establish, or reestablish credit and bump a credit score after a time. I would not look to do that until you get the old charged off Bank of America credit card balances settled. You do not have to wait for the credit report to update with the fact there is now a zero balance owed, but waiting until the accounts are negotiated and paid. This would help prevent the appearance of any flags the debt owner may view as a reason to hold out for a higher percentage deal.
When it comes to current underwriting and mortgage approval, just about any outstanding balance on your credit report is going to be part of the DTI calculation that can impact loan approval and rates.
Michael – Thank you so much for the great article and your offered accessibility.
I am in a similar situation and would appreciate your feedback, as I am getting anxious.
I have two B of A accounts that I unfortunately walked away from when things got tough in 2008/09. The mentioned accounts both last active 08/2009, totaling close to 43k. After refusing the drastic BK, I have spent the last 2 years doing everything I can to re-establish my credit profile, from paying what I could to credit restoration, two years later, I am not much closer than I was when I started.
I also am trying to provide my family with a new home, but am unable to find financing. Here in Texas our SOL is 4 years and am super close. I would like to know my best bet going forward? I spoke to a couple of lawyers, but am unable to trust another process like that. The accounts show charged off and zero balance from B of A, and balance due from the collection company, so it was sold off. Will it do me any good to contact B of A to negotiate, or are they out of the picture?
Its going to be a long 3 years if there is not much else we can do.
I appreciate your time and effort.
Mike H.
Mike – If Bank of America is showing a zero balance owed them on your credit report, they sold the credit card debts off to a debt purchaser. Contacting Bank of America at this point would be for the exclusive purpose of confirming with them who they sold the debt to.
You can negotiate with the new owners of the debt, or any collection agency they have the debt placed with, just as easily as you could with Bank of America. In some instances it is even simpler to resolve debts at this stage.
With your stated goal being home ownership, the SOL is not going to mean much for you to accomplish that. The outstanding credit card debts are going to skew your debt to income calculations whether the SOL has expired or not. This will impact loan approval. Especially with the qualified mortgage rules set to go into effect 1/1/2014.
If settling the debts will help you achieve your goals and you want to learn more about, and prepare for that, post a follow up comment with answers to the following:
What are the balances on each account?
Who is collecting or showing up on your credit report (other than BofA) for each balance?
What amount of money can you pull together to resolve the debts (right now or over a period of months)?
Thanks for your reply!
So, with the SOL coming up, that gives me leverage in making them go away? If I were to write them and remind them that the 4 years are up and have no intention of paying them a cent, does this help or hurt me? If it helps, how so?
I was referred to a lawyer as I mentioned, he said he thought he could help, but am assuming that he will only help with the settlement and charging me a ton?
My disgust lingers, because at the end of discussions with B of A their final settlement offer was $4,000, for both accounts combined. Unfortunately, I didn’t have the money at the time and couldn’t burden anyone else with my problems, not to mention I did not foresee this haunting me this far down the road. When I worked in mortgage, most things 12 months out was ignored, but i have no one to blame, but myself.
Desperate to get from under these two accounts, I could probably afford around $5,000 in order to settle and hopefully have them deleted.
The current accounts are owned by Asset Acceptance. Account #1 has a balance of $37,915 and Account #2 of $8,225. Those totals must include interest and fees, as my limit was 34k and $7,200, I believe.
Mike – The SOL would only prevent the new debt owner from filing a legitimate lawsuit to collect on the old Bank of America accounts. If the SOL passes, but the debts remain as unpaid on your credit report, you are still going to be hindered from accomplishing home ownership.
Writing to any debt owner to let them know that the SOL is almost up and that you are never going to pay them is the opposite of productive. As in – don’t do it.
You really do not need a lawyer, me, or anyone to settle the credit card debts. You can do just as well, and perhaps even better, on your own, and without the fees. If a debt buyer were to sue you for collection, that would be a good time to connect with an experienced collection defense attorney.
Bank of America made a great settlement offer to you back then, no doubt about that. At the height of the economic downturn a few years ago, BofA saw record credit card defaults. In response to that, they offered never before heard of low settlement offers. Many CRN members were able to see 15% settlements. A few were settled with BofA for a little less than that, like your offers. Those days are over. Current settlement trends with Bank of America in 2013 are between 25 and 40 percent. I know that means nothing on your accounts, because you are dealing debt buyers, but I want later readers of this page to understand the offers made to you back then, are not realistic expectations today. Also, don’t brood on that offer passing you by. An offer is only as good as your ability to fund it.
Mortgage approval with really old credit card debts like yours with BofA are pretty 2006 now. With the qualified mortgage rules dictating debt to income ratios that will factor in unpaid debts, loose lending standards of the past will not likely be repeated, or at least anytime soon.
You will be hard pressed to get a 5k deal out of Asset Acceptance on those balances. I won’t say it is impossible, I have seen some things get through from time to time. But that target is not generally a good expectation. Any expectation of settling and getting them deleted from the credit report WOULD be unreasonable. Getting them to reflect zero balance owed and resolved is all you need to work toward your goal of a home loan though.
If you are serious about settling these old BofA accounts, and want to talk strategy with me, let me know in a comment reply. I will send you an email with my direct line.
Every ounce of me is dedicated to conquering my past. I would love to discuss approaches with you.
Good to speak with you today Mike. Post any additional comments or questions you have as they come up.
Hi Michael,
I have a old PAID/charge off from Amex. It’s about five years old. Is there any chance of getting this charge off removed?
Luis – You can always try disputing a negative item off of your credit report. It is best to have a valid reason to dispute it. Is there anything about what is being reported that you question?
Old resolved collection accounts lose potency to hurt your credit scores and rating. How long ago was it that you paid this? What credit goals do you have in the next 24 months?
Mr. Bovee- I have been trying to get them on the phone for days now to reach their internal credit bureau disputes department but I have been unsuccessful. My husband had a short sale through BOA and it “falls off” his CBR in 06/2014, I was calling to see if they could remove it early since the co signer had it removed abut 6 months ago. Any suggestions?
Gina – With the date for this to fall off the credit reports so close, what is the reason you are in a hurry to get it gone sooner?
I have just a few last questions for you Mr. Bovee and then I’ll let you move on. Again, I really appreciate the time you have taken w me and the advice you have shared. If down the road they should offer me a settlement, and, I am able to start saving to be prepared for such, how much do you think I would need to settle a cc debt that is slightly over $18000 w BOA? Obviously you don’t know for sure but from your experience is there a dollar amount or a a percentage I should be trying to negotiate towards? Also I have read that a settlement is typically done in 3 or 4 payments over the course of 90 days..is that correct?
Take Care..Tony
Tony – It is not so much an issue of them offering a settlement. That is a process that is better done in a planned and prepared way. If you were not experiencing something of an anomaly with Bank of America already, my feedback about settling with them would be much more direct and the outcome much more predictable.
If after their count of 180 days, they are still drafting payments, then you are still good to go on the plan they set up with you. Look at your bill and be sure you are not being charged late fees, or any other type of fees.
If they do drop your account into the typical collection pipeline, your target settlement amount will be different based on where it lands. I see Bank of America credit card settlements ranging between 25 and 40%. That is based on real time data as of today.
If you want to drill into the details some more (which I will need some additional insight into stuff you may not want to post online), I can speak with you on the phone. Let me know if you are up to that and I will email you my direct line. Lost in the 50’s weekend here, which is my favorite weekend of the year in my little corner of the world, so Monday would be the earliest opportunity to connect.
I’m concerned too! I just checked the new statement that came out and it’s not good news. It’s showing my next payment of $420 due 6/15 and once again my past due balance as $1600 with a total of $2100 to bring the account current. At this point do you have any advice for me? As I’ve said it took 3 ppl last time for them to tell me nothing was wrong on their end. Are there 2 different repayment types of plans? One for hardship and one just a repayment plan or something? Perhaps I’m in the wrong one?
I really appreciate you taking the time to help me w this. Thank You!
Tony – There are several different payment plan and settlement options with Bank of America. From what you have shared, you were set up in the 60 month repayment plan at a reduced interest rate. It just was not set up in their system correctly. Here are the options I see:
1. Keep hammering away with phone calls until they correct this to show that your payments were reaged.
2. Get a similar monthly payment through a debt management plan using a credit counseling agency who has much more direct communication channels open with Bank of America.
3. See what happens after you cross over the line BofA has you set for to charge off your account. If you transition into their internal recovery department or FIA services, you can likely get set up with good settlement or repayment terms.
Credit card settlements with Bank of America at this time are favorable. You can save a great deal, but would have to raise cash for it.
“Recommitting” never did I hear anything about that. I’m now totally confused. Is what you’re saying that they entered into a 60 month/$420 month agreement that is basically only good for a year? Can they change the terms of our agreement after 12 months or is it just me signing something saying I still agree to our terms?
I’m not very happy w the way BOA does business. At one point in the past few months a rep tells me they can settle this acct for $12,000 then a month later another person tells me they can’t settle for less than $16,000. It’s almost as if one hand doesn’t know what the other is doing over there.
Tony – The 12 month payment commitment is done over the phone. You would get a reminder letter in the mail a couple days after the 12 payment was drafted. Nothing to sign.
I really think your account is not set up correctly in BofA’s hardship plan. That is why you are going through what you are. Bank of America would not offer a settlement at all if your payments were being recorded correctly as on a managed plan.
If you are serious about settling with Bank of America, based on today’s trends, the numbers are much better than the 12k you were quoted. But that is not an option when you are working with them while on their payment plan.
I am still concerned that your account could be charged off and dropped into the collection pipeline.
UPDATE:
After several minutes and 3 people later I finally spoke to someone who acknowledged that rolling that past due into the account had happened in the past however it does not any longer. She had no explanation as to why this practice has been stopped. She also said she didn’t have any solution for my situation other than for me to start paying down the past amount owed. Failure to do so in a timely manner could result in the credit card debt being charged off she told me.
Now here’s the kicker…I generally make my payment the day before it’s due on the 15th. This month I made it on the 10th after speaking to the supervisor. Miraculously….I just looked online to find out that my payment had posted to the cc account and it had changed my past due from $16oo to $1200…meaning the payment I made was applied toward the past due amount. This hasn’t happen at all in the past 10 months that I have been on the repayment plan. Not really understanding the what’s and whys of it all but happy to see movement in that past due amount and hoping it will put a stop to any charge off action.
Thanks for your help!
Tony – I would not expect for it to stop any system charge off action based on what you shared. I am a bit surprised by what you shared Bank of America having told you. It is not at all consistent with the hardship repayment plans they have been offering direct to their credit card holders for years. It would also fly in the face of how Bank of America offers to reage credit card accounts that get enrolled into a credit counseling agencies debt management plan.
My sense is that either what is occurring with your account was not explained to you very well, or they saw the error – fixed it – and you will make normal progress on your hardship repayment plan from here.
Were you told you will have to recommit to the repayment plan with Bank of America every 12 months? This “recommitting” yearly did become part of these types of direct to consumer payment options more recently.
I have $19,000 in credit card debt with Bank Of America. Back in August, when the card balance was just over $22,000 BOA agreed to a repayment plan of 5yrs at $420 a month. At that time I was 4 months past due and had an overdue payment of just over $1600 due. I noticed after making each payment of $420, that the balance of my debt was slowing going down however the statement always showed the past due balance of $1600. The statement also showed that the next payment due was the $420 along with the due date the following month for it. Anyway..I made the payment agreement in August as stated and since then I have always paid the $420 on time. In the past few weeks BOA has been sending letters and calling me constantly. When I returned their call I was told that past due balance was not being paid off and therefore if I didn’t pay more each month then the account would be charged off. Now I’m making the agreed $420 payment each month on time and if I could have paid more than that then I would have agreed to more. I can’t so I didn’t. How in the world can I be expected to pay down the $1600 past and why are they expecting me to when it wasnt part of our original agreement. I guess my question is what do I do now? Do you believe they will charge off my account even though I’m paying on time?
Thanks for your input,
Tony
Tony – When your Bank of America accounts were enrolled in the 60 month repayment plan, the 1600 should have been rolled into that. That is normally what happens. I cannot say why it did not in your case.
Call Bank of America and ask to speak with a supervisor and explain the situation in order to get your payment situation worked out. Please post an update here with what happens.
Yes, as silly as it sounds, if this does not get corrected in their system your credit cards with Bank of America could be charged off and sent to outside collection agencies, or sold off to a debt purchaser.
Hello…my sister had a mortgage loan thru Bank Of America. It has been charged off…she continues to live in home. Bank of America told her she can stay in home for as long as she wants, but to pay property taxes. How can she settle on this charge off? She has been stressing since 2009. She wants to keep her home….Bank of America told her she cannot short sell nor settle on account because it was charged off. Need Help with this.
Thank you bunches 🙂
Isabel – I am not sure what Bank of America may be referring to as charged off debts, even HELOC’s and the like, are settled routinely. I am sure there is more to the story, and probably more than would belong in the comments section of this post. If you and/or your sister would like to call in for a consult, we offer them for no cost. Just dial 800-939-8357 ext 3.
Michael,
I have a second mortgage on my credit that shows a charge off with a balance of $102,000 owed. This home was foreclosed on in 2009 and eventually sold by foreclosing lender in Nov. 2011. This home is in Nevada which I believe SOL is 6 years. The foreclosure doesn’t show up on my credit report because they didn’t respond to the dispute so it was deleted. The CO still shows up which obviously affects underwriting for getting a new home loan ( I was told by WF bank that it must be a minimum of 4 yrs after the the home was sold to be eligible for a new loan). I had contacted an attorney and they stated that the second mortgage SOL to collect in Nevada is only 6months (like the 1st mortgage) after a foreclosure but I’ve read that they may have the entire 6 years from date of 1st default to legally collect. Which is it 6mos or 6 years? The 7 years to fall off my credit is Mar. 2016 (plus 180days = Sept/2016) and the 4 yr window being Nov. 2015 from date of sale. I’ve attempted to negotiate with Greentree with no luck. They are willing to settle for $50,000. If I had that kind of $ I would be in that situation. Would it be worth trying to settle for say 10% since SOL has expired or just wait it out til late 2015/ mid 2016. I’d like to purchase by next May so I don’t want to do this unless I must. Any advise? Thank you so much for your informative posts.
There are different reasons why a second would stay collectable for the full 6 years. The attorney you spoke with about Green Tree being passed the SOL already would have the most reliable feedback if foreclosure law is a regular part of their practice.
If it were me,and if I were certain I could not be sued, I would hold on for the 4 years the Wells Fargo rep said is their standard for a new home loan (after the sale), and use any money I would have paid to settle the charged off second mortgage as part of the down payment on the new purchase.
What would be the reasons a second could still collect for the 6 years? I thought the assembly bill (AB 273 I think ) limited 2nd mortgage holders to a 6 mo SOL if foreclosed after July 2011. What would be the exceptions to the rule and how would I know where I stand in all that?
The attorney you spoke with before would be a good resource to help you drill down into the why’s and how’s your second mortgage would be passed the ability to sue. Some states will apply different treatment to seconds when they are purchase money vs cash out refinance loans.