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
Short answer
Bank of America tends to keep an unpaid card with its internal collection department at 90 days, but it does assign accounts out before charge off, and it can sell them after. Call the bank and ask who has the account now. Charge off is an accounting entry, not the end of the debt.
Key points on this page
- To find out which way your account went, call Bank of America and ask who it was placed with or sold to. If the balance was sold to a debt purchaser, that buyer may have sold it on again.
- You can also run the name of the company contacting you against the usual suspects in debt collection and debt buying, to work out whether they are an assignee or a buyer.
- Charge off is an accounting function. The debt remains collectable, and there is no FDIC insurance on charged off credit card debt. The FDIC insures depositor funds.
- Only one party should report a balance owed. If a debt buyer reports a collection account with a balance, the original creditor should show no balance owed to them.
- Disputing a valid entry is usually a waste of time and postage. A dispute works when the reporting is inaccurate, out of date or erroneous, or when the furnisher never responds to the investigation, in which case the item should be deleted.
- Debts past the statute of limitations often settle at the steepest discounts. Never let the collector know you need the account resolved for a home loan, because they will not go as low. If you are not resolving them at all, a cease communication letter, sent certified with return receipt, triggers rights under federal and state law.
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.
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.