How to get Debt Settlement with Bank of America – FIA Card Services – Penncro Debt Collection Agency
I received a statement of account from Penncro Associates regarding our Bank of America credit card. It used to be MBNA and they were acquired by BOA. We have been unable to make a payment on our account since September (prior to then we had never been late on a payment ever in the 15+ years I had had the card and with them raising the interest rates so high I exhausted our savings account trying to keep up with the credit card payments). Anyway, the statement states that my account has been referred to them for collection but any payment should be sent to FIA Card Services which is BOA.
Am I correct in assuming then that BOA/FIA hasn't sold the debt to Penncro if any payments should be sent to FIA?
The statement also says that I can request a "Validation of Debt", should I?
When do I start the negotiation process to settle the debt?
Any help you can give me would be greatly appreciated.
Am I correct in assuming then that BOA/FIA hasn't sold the debt to Penncro if any payments should be sent to FIA?
—STACY
You are correct in your assumption that your Bank of America account has not been sold if payment instructions are to send money to FIA Card Services. Penncro is just an assignment debt collection agency working to collect your old MBNA, now BofA credit card debt.
Settling your BofA or FIA Card Services account with a debt collector like Penncro.
You definitely have the right to to request validation of the debt, but should you? If you recognize the Bank of America credit card debt as yours, and want to resolve the account through settlement, I would not recommend sending in a validation request. Sending the request may actually complicate your efforts. Here is a brief article on the topic of debt validation when you are trying to settle a debt that you know you legitimately owe: Debt validation when you really just want to resolve an account.
When and how to approach your negotiations with Penncro, or even if you should, will depend on several things.
- What amount of money do you have available now to apply to a lump sum settlement?
- If not enough to settle in full for the lowest available offer, how long will it take to raise the funds? Can you reach a settlement and payment terms with time to pay? In other words, reduction of the balance owed with several months to pay the settlement in installments is an option.
- Could a better deal be negotiated direct with Bank of America or FIA Card Services?
- Are you current with other credit card payments?
I would recommend you read through the settling with debt collectors portion of the site. I cover most of what you want to know about settling credit card debt with collection agencies like Penncro and others. There are differences between settling with your bank directly, and each different debt collector BofA may send or sell your account to.
If you want to talk over your situation on the phone, call me 800-939-8357, and press option 2. I also offer one on one help if you need it.
If you have questions or concerns while you read through the articles and reports about settling debt, post them in the comment section you will find at the bottom of each page. Anyone with questions or concerns about settling your credit card with Bank of America, FIA Card Services, or Penncro, is welcome to post below for feedback and helpful tips.
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, and is a regular contributor to several personal finance websites.
We just had a title search on our home. We found that I have default judgement on my FIA card. Which I believe to be a credit card from years ago. It was filed June 28,2010. I was unaware of this entire situation. It was for 4,128.23 and now with interest it’s over 7000.00. What would be the best way to handle this since I have no recollection of the lawsuit? We live in North Carolina and it’s never been on my credit report. Thank you!
First of all, you have an amazing site. Thank you for sharing such valuable information.
I just received my summons from BOA attorney’s Glasser & Glasser on 6/27/19. I’ve never been in this situation before and I have 30 days to file an Answer.
I. Plaintiff – Bank of America
2. I owe $4,375.13 – The statement from BOA is attached. Last payment was 6/18 and their last written warning was 11/18. At the time, I was not in a good financial place or state of mind. Today, I’ve recovered and I have received significant raises.
3. I currently mortgage a home and make payments on a 2015 vehicle – with payments up to date.
4. I have a personal loan I had to scramble to get in 2017 for a heat pump and I was in the midst of refinancing in order to pay off debts.
5.. I do have medical bills that are in collections and more to come. This probably equals $8,000.
6. I can scrape together about half of the above amount today. I can likely make payments at this point.
My question are, do I contact BOA directly at the number of their last warning letter, or do I have to contact the attorney’s representing them in this lawsuit if I attempt to negotiate and settle? If I don’t settle, where can I get guidance on how to answer? I appreciate your time.
You would contact the collection law firm for Bank of America in order to negotiate your settlement. Things are a bit different when negotiating a settlement after having been sued. Check out this page if you are going to do this DIY: http://consumerrecoverynetwork.com/question/can-you-negotiate-and-settle-a-credit-card-debt-if-you-are-being-sued/
You can get help defending the suit and settling from the network. An attorney will draft and file your answer for $200, then charge 15% of what they save you in the settlement. You will buy yourself some time to pull money together by defending the case. You can click the get debt help tab in the upper right corner of any page on this site and create your user profile (secure and private), and when you get to the part where it says schedule to talk with an expert, bring up that calendar and pick the day and time you would like for me to call you to go over this.
Hi Michael,
I defaulted on a Bank of America credit card in 2017 due to cumulative unemployment, surgery issues, etc., and just received a summons for a lawsuit a few days ago. The facts:
1. Plaintiff – Bank of America, NA
2. Attorneys for Plaintiff – Rubin & Rothman (“This communication is from a debt collector,” etc.)
3. Sum -$13K “and costs of this action”
4. NY State resident
5. No real assets – Don’t own home or car, no savings left, no retirement acct., furnishings in studio apt not likely worth
more than a few grand, already sold what jewelry I had year of default to pay rent and eat
6. Still don’t have full-time work, a position I had higher hopes for has turned out to be more of a 6-8 day a month gig,
thus far no pay stubs to furnish anyone, and basically just enough to cover rent and utilities and food.
7. $40K+ federal student loans, currently in deferrment
8. I have kept current on my only other card, a store card, because I have been able to swing the low $30 min payments
I live in a stabilized tenement walkup, located in a fancy NYC zipcode, for what that’s worth, wondering if zip code flagged me as more attractive to sue…
My intention is to get loans from loved ones to settle, and know not to negotiate until cash is in hand. Am I correct that I should file answer first before contacting the Plaintiff firm to negotiate? It seems unlikely to do better than 50% with BOA, is 30% a good place to start?
Do you have any idea what their court costs might be?
I have until July 1st to file an answer – I have poured through your pages, but am still unsure what I can/should say. Your quote, “often better to file an answer or general denial before negotiating,” are those separate procedures, or is a general denial just one way to file answer? I understand the concept of establishing controversy and the importance of showing that I will not just wither, but in terms of “defending the suit,” I am wondering what best to say in defense, and when to say it.
I did contact a firm that specialized in these suits and was quoted a fee of around $2,500 to do all the filing and negotiating (plus $250/hr court cost “which rarely happens”), but it wasn’t really a consultation, just a 3 minute call to request my contact info and a scan of the suit. The assistant’s response to the scan only mentioned seeing the case to a satisfactory conclusion, and buying me time. They also mentioned that I could file the answer pro se and attempt to work out “a manageable payment plan” on my own, then included links to other possible attorneys and free legal resources. No mention of possibility of settlement, not very encouraging – was this a brush off?
Committing to a payment plan is not really a viable option for me now without a solid, predictable income, and I would like to avoid default. I have seen your writings regarding BK, but fear that might make finding more gainful employment even more difficult. Any advice on strategy? I would probably be more comfortable with representation, but if the best they can do is arrange a payment plan I can’t afford, it seems like throwing money out the window. Any thoughts/ideas you can offer are GREATLY appreciated!
I would talk things over with an experienced debt collection consumer law attorney in your area.
A general denial or answer to the lawsuit accomplishes the same thing. And yes, it is still what I would do in a situation like this, before negotiating, if it were me.
Assume for a moment you could settle this for around 7k. How long would it take to pull that together?
Thank you for responding!
With respect to pulling 7k together, it could be two weeks, or two months. A relative has indicated a willingness to help and, I believe has the ability to do so. My issue is they are pressed for time, not always easy to contact, and may not appreciate my sense of urgency. I am finding it difficult to force the issue, considering I am the one with hat in hand, so to speak. I still feel this is something I can work out. I plan to contact a couple more attorneys for consultation, but I cannot pay a retainer without help from the relative.
I have gone to a legal clinic that offers advice to the public. They recorded basic information and filled out a Written Answer for me to submit to the court. In addition to selecting “General Denial” on the checklist, they also chose the following defenses:
– I do not owe this debt
– I have paid all or part of the alleged debt
– I dispute the amount of debt
– Unjust enrichment (the amount demanded is excessive compared with the original debt)
I did scramble to beat the charge off deadline on the last day possible, and understood I had successfully done so at the end of Nov. 2017. I made a few payments as discussed with the bank representative (totaling $800-1,000), but when trying to make the subsequent payment, was told by another department that the entire amount was due (can’t recall if that meant total amount overdue or entire debt), and that even though their notes indicated my previous understanding, that the person I had discussed it with was somehow wrong/mistaken. Obviously I couldn’t pay the entire amount.
So my question now is, if I go ahead and file the answer I have prepared now, can I still pursue this with an attorney down the road? Do the responses the clinic chose (staffed by volunteer attorneys) seem overdone?
I believe their rationale may be in part, because we don’t know how the payments I did make were credited, and they said something about interest and fees? Confused. I have another appointment in two days with volunteers from the local bar association, and am doing all the reading I can to be as informed as possible while I try to raise the funds. Thank you for all you do!
–
I would be okay with what they prepared if it were me.
Thank you, Michael, that’s comforting, whew!
The Bar clinic was a bust, the person I spoke with had no knowledge about this type of law whatsoever (even advised I call Plaintiff attorney to try and settle before filing answer, which I know is bad advice). I have held off on filing the answer because I wanted to look into finding representation before doing so. One told me that given the amount (13K), it was probably not cost effective to hire an attorney to try and settle – he also recommended speaking with the first legal clinic (one’s who filled out answer for me).
Second firm was polite and professional, but I can’t even get past their screening to a consultation without being able to definitively answer questions I cannot yet answer (ie how much $ help, when, how much per month, etc.). Also, above flat fee for court and negotiating, they charge 20% of amount of savings, and said that if I went ahead and filed the answer myself, that they could not represent me (I thought counsel can file amended answer if necessary?). I don’t question an attorney’s right to make a living, I just expected an actual consult (as advertised and referred to in online ratings), and some vague information and outline of what my expectations might be for the process, before making a decision to hire someone. additionally, I need to help my elderly dad who lives in a nearby state get rid of most of his stuff, and move…overwhelmed. I was hoping to be able to take care of this and settle, so I can deal with everything else on the plate.
As I am running out of time to file the answer, I guess I’ll just go ahead and do that tomorrow before my head explodes from the stress, and continue from there. Now off to medicate myself with some chocolate…
I just noticed on my credit report that i have a judgement against me from fia card sevices for $4700 I want to settle this as soon as possible. How do i contact them? Do they ever settle on a lower amount? I would pay the full amount if I had to. Any advice? Thanks
Call FIA Card Services and find out if they have the account internally, or if they still have it with the law firm they used to sued you, or with a different one.
If FIA still has it, you can negotiate right then and there. You will have to convey a hardship, and be convincing with what you are offering is all that you can raise to settle with them.
If it is with a collection attorneys office FIA will tell you who and how to contact them. You will need to call the collection attorney to negotiate a settlement on the judgment. Read that linked resource before calling the law firm. Tons of helpful information there.
Also, watch this video about what debt collectors can see about you.
I have a judgment against me from March 2016 by bank of America. I don’t ever remember being served or notified of court date but at the time i was going through some things so I may have. Basically they went to court and i didn’t. The judgment is for 14k….since then I’ve gotten a really good job and im sure they are soon to come after me to collect. More importantly I’m trying to get my credit back in order from a divorce. I’d rather not pay a dime but id really like to get this taken care of. I’m in a position to offer a settlement for 5k or under. I live in louisiana….best way to handle?
Fill in the talk to Michael form in the right column. I will email you and set up a time to go over your situation on the phone. It is rare to be able to settle judgment debts for less than half. But perhaps yours is one of those situations.
I have received a civil suit from Bank of American …how can I stop it — or can I make arrangements for monthly payments?
How much is the lawsuit for? What state are you in> When did you last make a payment?
I have had a Bank of America card well over 25+ years; always paid on time. In fact I have tried to pay well over the request and for the past 5 years have not used the card. I called them 6 weeks ago and told them my income has drasically has changed; I no longer can work my 2 part time jobs due to my husbands health issues. Also I will be retiring in the next 6 months which my income will change too. I have a $6500.00 balance and have offered to clean out my savings to pay $3000.00 of the $6500.00. They told me today I do not fit the criteria for a lump sum debt settlement. They could not give me any more reason then that. My credit score is 798 and I have good credit. What would you suggest. I don’t want to go with a credit counseling service; as they still want me to pay $200.00 a month.
You cannot settle with Bank of America while your payments are current. In order to settle for the best savings you will want to be 6 or so months late. There is not much to it, but to to determine you cannot continue to pay, and then actually stopping for that long.
I have a BOA judgement against me for $11,000. A month ago the bank attempted to collect money from my local bank account but there was no money there. Are my wages going to be garnished next?
What state do you live in?
Hi Michael,
After much fear of facing my bad debt, I would like your advice. I held a Bank of America checking account and I became more broke and could never catch up with all of the overdraft fees. Even if i canceled automatic debit transactions (ex. Monthly gym dues,) the overdraft fees for each attempted withdrawal from if II didn’t have the fees the first time, they would try again the next. Each time I incurred $35 withdrawal fee. After some time I could never keep my balance in the positive. I would like to rectify this. I pulled my Chex systems report and my BofA account is listed as “Account abuse”. Original charge off amount of $1117.24 and closure status is unpaid. I don’t know where to start. I would sincerely appreciate any advice you have.
You are going to want to contact BofA and talk to them about paying it off. How long ago was this?
Hi Michael,
What a helpful site you have created! I have read through many of your articles on debt settlement and I am hopeful you can provide some advice for my situation. I was laid off in early 2011 and exhausted my savings trying to keep all my bills current. I was successful in doing so for about a year, but ran out of funds. I ended up taking a job in early 2012 that paid about 35% less than my previous job, and I couldn’t get back on track. I had 4 credit cards that became delinquent – 3 with Chase, 1 with Citibank, and also 1 line of credit with BofA that I was unable to continue paying. I tried to negotiate lower payments with some of these creditors at the time, but was unsuccessful.. Last year (2015) I was able to settle 2 of the Chase cards on my own with my tax refund. This year I am hoping to settle the rest, if possible. The details of the debts are:
Citibank CC- balance $18,400, last paid 12/2012, appears to have been sold to Cavalry Portfolio Services in May 2016.
BofA LOC – balance $23,500, last paid 01/2013, Most recently referred by BofA to Northstar Location Services about 3 months ago.
Chase CC – balance $10,800. I don’t know who the debt collector is..
I have several mortgages and also a few smaller credit cards that I have been able to keep current, such as Lowe’s, Home Depot, Discover, Old Navy, etc. I tried to keep up with everything that I could, and the mortgages are for rental properties where the rents pay the majority of the mortgage & expenses. On my credit report the BofA and Chase accounts show they are charged off, but there is no record of the Citibank account whatsoever. Is that odd, and does that affect my strategy?
I’m sure it doesn’t look good that other creditors have been paid without delinquency, but that is how things unfolded in my case. At the time I thought I would get back on track and tried to pay the debts I was capable of paying, plus I didn’t want to become delinquent on the mortgages.
What is the best approach (timing and amount of settlement to shoot for) when trying to negotiate settlements with Cavalry (for Citibank) and Northstar (for BofA), as well as Chase (if I can find out who the debt collector is)?
I have approximately $8K that I can work with at the current time to try to settle these debts, and could accumulate around an additional $3K in the next few months.
Thank you for your guidance!
Your situation is complicated by all of the positive things that are showing on your credit. It can make getting the best settlement outcomes more difficult, and you need the best outcomes it you want to get these all knocked out with the funds available to you now, or in the near future.
Call me to talk over some ways to maximize your settlements at 800-939-8357, choose option 2 to ring my phone. You can reply to any comment notifications you get from the site and I will respond to those too.
Hi, I have settled my BOA Credit card for 2300/9400 USD on 23rd may. BOA sent me a settlement letter stating they will report this account as “Settled account. paid in less then full balance” to credit agencies.
But on June 9th 2016, I see below listing in experion report for my BOA account.
Account Status – Closed- paid and closed
Payment Status – Collection/Charge-Off
Remarks – Account Paid for less than full balance charged off.
Is that the way BOA reports a settled account or do i need to contact BOA to correct the reporting to “Settled”
Please advise
.
It will look a tad different on each report, but yes, that is what it will show up as, and with a zero balance owed (which is the most important part of settling).
Bank of America is one of the better banks at updating your credit reports after you reach a settlement.
Hi,
I just learned I have a lien on my home because I was trying to refi. The lender told me it was from FIA card services. I remember working out a payment plan that ended up falling through back in 2012. I did receive a letter from a sheriff that asked for my response within 30 days to be filed. I filed response with the court and Frederick J Hanna & Associates ( they were handling the debt collection). This also took place in 2012. After filing this response letter I never heard anything else until I went to refi and apparently there is a judgement against me. The original amount was $2400 and it has grown to almost $4000. I’m a single Mom and work as a waitress so it will be hard for me to come up with that kind of money. What should I do?
How long would it take you to raise half of that?
I could probably get it within a couple months or borrow it from family and repay them. I just wouldn’t have it immediately.
That can work in your favor. With the hard pull on your credit reports from a lender for a home loan, I would want to wait 90 days if I could before calling to negotiate a settlement (if you can wait that out and you appear to need to). This is because debt collectors have real time access to your credit reports and they can see that you are trying to get a home loan. You can tell them it was not able to go through after a little bit of time goes by.
You can still call to negotiate earlier than that, and the deal you get may be as good as if you never applied for a home loan, but I find that to be less common.
Read through my post about settling judgment debts.
Bank of America credit card charged off in 2010 with a balance of $30,000. Account was placed with Gatestone. I have been making payments to Gatestone since charge off in the amount of $200.00 each month. Current balance is about $18,000. I have $3,700 saved for a settlement. What target amount due you recommend for a settlement with Bank of America? I am not sure if I should reach out to Gatestone and discuss settlement amounts or if I have no amount near enough to settle the account.
Settling with Gatestone now, given the history and while your payments are current, is likely going to require some more money than what you have saved. There are exceptions to that, and you may be one, but call in for a phone consult and I can dig deeper into how a debt collector, whether from BofA, Gatestone, or even another agency, would view you as a collection target. You can reach me at 800-939-8357, choose option 2. I am not in much today, but will be the rest of the week. You can fill out the talk to Michael form in the right side bar too, and that way we can schedule a time to speak.
I had two credit card from BOA with a balance of 14K and 6K.. These account were charged off in May 2012. the last date of payment was Oct 2011. My legal state of residence is Alabama where the SOL is 3 years and which is already passed. Bank of America hasn’t sold this debt to third party outside collector. As far as I know there is no collection activity going on in this account.
Since it’s past SOL, do you think BOA will accept 3K as a settlement amount for both the card? I can afford to pay this amount but no more than that.
Settling both your BOA accounts combined for 3k would mean negotiating a 15% settlement. That is just not all that common. Can it be done? Yes, but you might want some help getting that done.
You can also look to hold off settling while you save up some more money.
Hello, your website has been a great help! However, I’m not finding a specific answer to my situation.
I was given a court summons last month to appear tomorrow for a BOA debt of $934.83. The card was originally opened in September of 2009 and it says I made a payment in 2013. I find that to be untrue. I would remember mailing a check out and I am almost positive I did not. I do not want to have to appear tomorrow. Is there anything I can do t avoid court? I am not able to put a lump down to try and settle. Maybe a smaller amount? Around $100.
I would want to raise the SOL being expired if that is applicable. What state are you in?
It is not realistic to expect to be able to settle with Bank of America for 10% of the balance, and especially if you are in court.
I would not try to avoid court at all. I would raise the arguments about the SOL being expired, and any other defenses I thought were relevant. Ideally you want to have consulted with an experience debt collection defense attorney, but unless you run into one at the court, that will be difficult on the day of court.
Post an update with how things go today.
Hi Michael, I have about $40k in CC debt with BOA and can settle with them for 50% or less of what is owed (the less the better). I am not late with any payments. I have been making the minimum payments and minimum only for a few years now. Would they go for that? Do I have to go late? Will they close the cards on me after we settle? How will this affect my credit? What is the best way to negotiate with them?
Your expertise is greatly appreciated!
You do have to stop payments to BofA if you want to be able to negotiate a settlement. Watch this video I just put up about not being able to settle with BofA without damaging your credit.
Your accounts will be closed by BofA after you miss a few payments.
The best way to negotiate with BofA is something I cover in a detailed articles series that starts with the basics of settling credit cards with your bank.
I recommend you call me for a consult to see if you are really a good fit to settle your debt. You may have things going on, and near term goals you do not want to mess up that would suggest doing something else with your BofA accounts. You can reach me at 800-939-8357, option 2.
What are your interest rates with BofA?
my interest rates with BOA are pretty good. One is at 10.49% and the other is around there as well.
Working with a credit counselor will not yield much of a benefit. I am available if you want the consult.
Hi Michael thank you for the chat earlier. I forgot to mention that one of the cards is a business card and the other is personal. does that change anything? please email me, for some reason I don’t get a notification when you reply
You will want to subscribe to the comments the next time you post. Some browsers appear to not show the feature that allows you to do that.
Nothing we spoke about on the phone will change with one of those accounts with Bank of America being in a business name.
This business is no longer open I assume?
The S-corp is kept active however no longer produces and income.
On another note, my husband was a casualty of the crash back in 2009 and lost his business. As a result he had a foreclosure and some other debt issues which were from that lost business but were in his personal name. Two of his creditors filed a judgment. One of them was AMEX which seems to have basically disappeared (hopefully) as per the clerk records all they ever did was file, they never went for ‘service’ or anything further. The other was a company called Portfolio Recovery Associates (original creditor MBNA), who I found out about because almost 2 years ago they had our bank account frozen and got over $28k (which was much more than the original debt) of our money through a writ of execution. After talking to an attorney it seemed there was nothing we could do about it, besides file BK which we didn’t want to, so we lost all of that money. We certainly don’t want to have that experience again so that brings me to my questions:
1. Do you think AMEX will pop back up at any point? Do they have a history of renewing their judgements close to term (10 years from original file date)? I was told by the attorney they can do this but since they never did anything else but file the judgement it seems like they plan to leave it alone. However any lender is going to request any outstanding judgements be satisfied once we go to purchase a home so I am not sure what to do with this thing. I don’t want to awaken a sleeping giant and get hit with a huge bill. We are only a year or two away from it being past the 10 years. What should we do – if anything- about this judgement…
2. there is another old creditor from back then that never did file judgement so they are past their statute of limitations, Van Ru Credit Corp collecting on behalf of Discover card for over $13k. This one seems like we should just completely ignore it because legally they have no recourse and it is so old that settling it now would then make it current on his credit and would seem to cause further damage at this point. What are your thoughts on this account? They just recently over the last 2 months ‘found him’ I guess and started sending these collection notices monthly to our home. on his credit report it shows this acct was charged off in 03/2010 AND submitted to collections in4/2010. what are your thoughts on this account?
3. There is also an old Meriwest HELOC that was originally tied to the property he lost in foreclosure back in 2010. On his credit the acct shows it was sent to collections and charged off in 06/2010. Then it shows up again under TK financial as submitted to collection in 04/2012. It would seem to me that neither of these creditors have recourse since we are passed the statute of limitations on the original debt. And also this home was lost in foreclosure so i don’t see how they could come after him anyways… Strangely we do not receive any communications from TK but we do get a ‘normal’ looking monthly bill from meriwest which is just weird. We have no intentions of ever paying these super old items and are hoping they just go away but I do want to make sure what our options are from a legit pro like yourself and what ‘could’ happen going forward. Especially considering that I am now looking at settling with one of my creditors and temporarily destroying my credit. How can we get these to go away?
thank you
Judgments are renewed in the matter of course. I do a lot of this work (I mean a bunch) over the last 2 plus decades, and I can only think of a couple instances a judgment was not renewed. You will want to make resolving the judgment with AMEX part of your over all strategy.
I am curious about what happened with PRA and am going to suggest you call me again to go over those details. I can offer better feedback to you based on that conversation.
You do not reage a collection account on your credit reports by settling or paying it. The account still has to come off at the 7 and one half year mark from when payments to Discover stopped. If Discover is showing the account charged off in 2010, you have a year or a bit more to go before it drops off. I would not do anything with this at this time if it were me.
The same thing applies with the HELOC and TK Financial, as the time lines are similar to the Discover/Van Ru scenario.
just left you a message. Please call me back when you get a chance. I just missed my fist payment on my BOA’s. I forgot to mention that I do have a 2nd mortgage with them. Does that affect anything?
Your second mortgage with BofA will typically have no impact on the negotiating process you will go through in order to settle your credit card debt with them.
I will be able to ring you back on Monday.
Quick question: at what point is BOA going to pull my credit now that I’m going late?
Between now and when you are talking to BofA about what you can pay in a settlement, they care little about what they may find on your credit reports. There are periodic reviews that are set by a bank when you are current with payments, and those may go through for a time, but they are meaningless when you already know your account will be closed for nonpayment.
BofA cares about your credit again come negotiation time.
OK. the reason I asked when they will pull my credit is because you had suggested I pay off my other CC before they pull my credit so I wanted to gauge how much time I have to do that
For other readers I want to be clear I suggested that based on the details we covered in our phone consult.
I would pay off the lower balance credit cards right away if it is possible.
I’m a bit unclear as to when they might pull it. Can you give me further clarification please? thanks 🙂
I typically encourage serious negotiations to be instigated after you are 150 days late, but not 180 days late. It is around that time that BofA could potentially view your credit reports with a more discerning eye.
Hi Michael, we are nearing the end with BOA and I had a few questions. I left a message as well so if you could call me that would be great.
BOA is claiming that as of August 15th they are no longer settling their business credit card accounts and only offering to settle on my personal card. As of Sept 1st I will technically be at the ‘charge-off’ phase based on how many payments past due I am. After September 1 I will officially be 6 payments past due based on how they calculate things. Anyhow… They are stating that my debt will be sent to a third party basically immediately after the 1st and are offering to settle my $17k personal credit card debt for $5k. So here are my questions:
1. is $5k on $17k a good deal?
2. is it true that they will send this to a third party immediately or is this there way of trying to settle for less?
2.a. If they do send it to a third party and charge it off I can still settle with BOA (per them) but at this point have I gone too far as far as my credit goes? and will that mean that even when I settle, vultures will still be coming after me now that its out there on the market?
3. is this statement about them no longer settling business credit cards true or some kind of BS? regardless of that answer- should I make a minimum payment on the business card after I initiate the settlement paperwork on the personal card to avoid going to charge-off on that account?
Good to talk with you on the phone. Post an update with anything new and lets go from there.
Hi Michael,
I am hoping you could give your opinion on my recent situation. I may have no options, but I am not leaving any stone unturned.
I started a campus account 2010 with BoF; it was required that an adult (my mother) be on my account because of my age. ( I was about 17 at the time.) Over the years I didn’t realize she was still on my acocunt. (Which my mistake, I know.)
On 12/9/15 over 400 dollars was withdrawn from my account. The bank stated my mothers account where in collections and since her name is on my account that is where the payment drafts from. I never received and notification about this amount being drafted. I was unaware her account was in collections.
I offered to set up a payment plan on her behalf on 12/9/15 when the amount was drafted from my account. It had been exactly 90 on 12/9/15 since the account was overdraft.
Do you think I have an options or arguments here?
Over 400 is a lot of money when you are a single mother and student living on a fixed income.
Thanks
Who is the named plaintiff that has the judgment against your mom?
Who is the debt collection attorney handling the collections?
Hi Michael, I have one for you. I’m a real estate broker in San Antonio and I also buy houses. I had a property under contract a while back and the title company found an Abstract of Judgement against the owner. I have a copy so I’ll put some details to it: FIA Card Services NA was the plaintiff and they filed a judgement through Wolpoff/Abramson. Any research into that company will return a slew of negative information. After doing some research, I found this thread – Wolpoff joined Mann Bracken and Axiant and both went under. All contact information for those companies is useless and the more you read about them, the worse it sounds. So, now I have a seller who can’t sell their house because there’s an 8 year old judgement against her that was invalid in the first place but she’s unable to get it removed because there is no one around to speak with about getting a release. I’ve read tons of stories about this same scenario when dealing with the W/A, Mann Bracken and Axiant issue. So, do you know of anyone she can call who may now be in charge of all the outstanding debt those companies were collecting on? If so, she can at least try to call them and get it removed, settled, released, or paid off. Any advice you have would be greatly appreciated. Thanks
I would start by contacting FIA Card Services. They may have the account and you can work something out direct with them. If you need help call me at 800-939-8357, ext 2 rings to me.
All that Wolpoff and Abramson stuff that then went to Mann Bracken seems like only yesterday, but it really has been a while. Have you been able to ascertain that her file is one that was included in some consent, or other type of regulatory action, and should have had a release filed?
Hi,
I have just spent a good amount of time reading the question and answer portion of this. I am married and have three kids. We are a one income family. We have around $14,400 on two different credit cards through BOA. We have had these accounts for around 12 years. We have been late paying maybe twice the entire time. We are struggling to make ends meet because of credit card balance payments. I have called years past to negotiate a lower interest rate and have a very low one. We would like to settle with them for 25% of the balance. We want to pay it back, but with three boys and the cost of living going us and my husbands income that is not possible and are thinking of declaring bankruptcy. What do we need to or who do we need to call? Also, is there a problem where we will be charged on our taxes for the amount we did not pay? We can pay in cash the lump sum of 25%.
Settling credit card debts with Bank of America for 25% is not as common as it once was. I do still see deals like that though. What if BofA only goes to 40%? Can you raise that amount?
You do have to be behind with payments for many months. That could help you save up more money if you end up needing it.
You can end up owing taxes on forgiven debt. Learn more about whether this applies to you in this article: https://consumerrecoverynetwork.com/debt-forgiveness-taxes-settled-credit-card/
Hi Michael,
I have read a lot of the questions people have posed to you and you give very good advice. I am hoping you can assist me as well.
I had a BoA credit card that I got behind on and was unable to make the payments. I was trying to make some type of payment arrangements with BoA to try to get caught up on the account but was unable to because I was deployed overseas on short notice. BoA was trying to reach me to work out payment arrangements but I had already deployed. While I was overseas my account got further behind and BoA sent my account to legal. I was summoned to court but I was still overseas. I was a no show so the court ruled on BoA favor. This was in 2006. I now have a judgement on my credit report in the amount of $7,500 including court cost. Since then I have never heard anything else from BoA or any collection or legal firm.
I am out of the military and have gotten my finances under control. I want to buy a house but this judgement is still on my credit report.It is my debt and I want to pay resolve it. I don’t know what is the best way to resolve this to get it off my credit report. I don’t know where to start. Should I contact BoA? Where do I go to try to pay this off? I have $4,000 to use as a lump some but I don’t know if they will negotiate since there is a judgement against me. I can make monthly payments of $1,000 till it is paid off. Will they agree to that? Any help or advice you can provide is greatly appreciated. Thank you.
I have concerns about your being active duty military and being sued by Bank of America while over seas. Call me for a consult about the issues and options I see at 800-939-8357, option 2 rings me.
I owe bank of America about 600 dollars. i am a recent graduate and looking for employment. I do not want this to hurt me finding employment. can i settle with them for 300. i have couple thing laying around i can sell to come with the 300. but right now, i am short on money. i am scared of been sued for it. it has already been passed to collection agency. however, i do not recall even spending that money. but i do not want nor wish to contest it. it just too much of a problem,.
i had times warner asking for 150 and passed it to collection, i contested it through credit report and found i did not even owe the money because i never had time warner
Do you know how long ago any payment was made on your BofA account?
Who is the debt collector handling your account now?
Michael,
We have a judgment from MBNA that has been charged off by them and has resulted on a lien of our Austin home. We are trying to sell that home and settle the judgment, I have contacted FIA card services collections and have sent an offer letter to the legal dept. to settle that debt. We sent the fax on the 16th of last month, and as of this typing have not heard heard 1 word from the legal dept. When I call collections to discuss this they tell me they are still working on it and they are willing to work we me to settle the matter.
Is there any way to contact the legal dept directly or to find out where or what they may be doing to help us? Any information would be much appreciated.
Thanks, Mike
Give me a call for a consult on resolving this Michael. You can reach me at 800-939-8357, choose option 2.
Back in 2011 a collection agency contacted me, talking about garnishing wages. I set up a monthly payment of $50/ month and everyone was happy. In March of 2012 I called and set up automatic payments (so as to stop sending checks by snail mail). Everything went well. After 2 months of payments not being withdrawn I contacted the collection agency, asking why my $ was not being taken.. After 2 months of collection agency and B of A conversing… I got a call stating that B of America was not going to take payment because I was in the military. I explained with collection agency that the information was wrong. I WAS in the military until 2012 when I called them. He called B of America with correct info and said the answer was the same. So since 2012 I have not talked to or heard from anyone about this account. I am afraid that this account is going to come back and bite me in bum. Should I be expecting any calls or unexpected letters? My charge off date is 12/2008
The debt with BofA is still out there. You were making some form of payment up until March of 2012 so that would likely be the start date for calculating some of the limits collectors will have on your account.
What is your goal for this account? How much is the balance owed?
My goal was to pay it, until they stopped taking my $. At that point i walked away from it and focused on the rest of my credit report. I owe 6,000.
At the time you were trying to make those payments there may have been some hypersensitivity to collections from service men and women. I do recall major efforts from federal regulators to prevent abuse around then.
If you want help getting this resolved you can call me at 800-939-8357, choose option 2.
I owe BOA about $25,000 and I think I am going into my 5th month. I received a letter in July stating that I am 2 months behind this is why I am assuming this. I got another letter this past Friday stating that if I don not respond by September 22 which is tomorrow (Tuesday) they will proceed with further collections. I am not sure if that means it will go to an attorney which frightens me to death. What are the procedures after 150 to 180 days with FIA card services. Does it go into another collection agency thereafter? I can take money out of my company stocks to do $7,000 settlement. Do you think they will accept that or is that reasonable? I had to take a pay cut to my job and work less hours to take care of my mom which has been a strain on me and my finances. BOA/FIA has been calling every single day which I have been ignoring. I do not have any other credit cards besides my husband is also behind 2 months on his credit cards with BOA. I have one other credit card with Capital One that I am current but the balance on that is only $2,000 and I only required to make $25 a month on that which I am current but it is maxed out. I wanted to call BOA today to try to settle and I am not sure where to start. Do you advise for me to give them any information or just let them know that I had to take a pay cut and work less to take care of my mom and that’s the end of it. I really do not want to tell all my business because I am afraid they might use it against me. I did transfer my checking and savings account over to another bank back in March when I fell behind as someone advised for me to do that. Please help, I would really like to call them today as they have been calling me every day and leaving messages that they have several options for me. I am not sure if one of the options on for me to settle. I own my own home and are not behind on payments of course I need a roof over my head and both cars are 10 plus years old with no car payment. That is it to my life just simple. Thanks for your help in advance!
Call me for a consult Yolanda. I want to dig deeper into your circumstances in order to offer the best feedback. You can reach me at 800-939-8357, choose option 2.
The 7k you have to offer BofA as settlement in full is low for most situations, but I do see those types of settlements still getting done. I can offer more when we speak.
Hi Michael,
Glad to have found this site. I actually tried to read most of the posts and skimmed a lot since the 2013 postings.
I need help on figuring something out. I’m a mortgage loan officer and I’m helping my parents buy a home using a VA loan.
Back in 2009, they had put a plan together to get rid of a lot of CC debt by taking on a debt settlement company. This company actually did a pretty decent job for them but some of the accounts were not able to get settled, which brings the issue:
Credit Report shows BofA charged off account owing ~$12,900 back in Dec. 2009. However DLA reports as 8/15 and Date of Last reporting reports as 8/15. So accounts report currently even though no payments are being made and NOTES state: last late date as of 12/2009 and acct closed at consumer’s request.
This isn’t the HUGE issue to get around. The issue is that there is a judgment reporting as NOT SATISFIED from FIA Card Services, in that exact amount from above BofA account with a file date of 10/2010.
My parents don’t honestly ever remember getting any correspondence about the judgment, which they would have, considering they have all the other paper trail(s) for other debt they were once sued over or what not.
Now based on my research, they are past the SOL for CA, which is good, but this has to be satisfied in some way to obtain the loan and the only ways I’ve been seen to do that are either establish a payment plan or pay in full to show satisfaction.
I’m afraid that if they somehow get ahold of FIA (which my dad has tried to in the past and has had NO CIGAR), and establish a payment plan, it will re-open the SOL and FIA could and might come after him for the debt.
Please help.
Thanks,
Call me for a consult on the issues Jared. You can reach me at 800-939-8357, choose option 2. If you get my voicemail be sure to leave a message.
BofA charged off my account of $5600 in 2008. I received a 1099c in 2012 for $4750. It is due to fall off my credit report at the end of this month. However, BofA won’t release from report until satisfied in full or settled. How am I responsible for debt that was cancelled? To make matters worse, I am closing on a house in 7 days! I need this taken care of ASAP…..what should I offer?
Cancelled debt that BofA sends you a 1099c for still has to run its course on your credit reports.
You can often delay a closing a week or two. If this BofA account is set to fall off your credit reports in 6 days I would try that first.
You are not necessarily responsible for a cancelled debt, you are trying to get a home loan through before this dropped off. That can mean resolving old debts, like the cancelled debt you have with Bank of America, in order to get your new loan approved.
Hi, Michael,
I’m in the same situation as most of these people.. I have a account that is charge off. the amount is $8100 and now in the hands of Nelson Kennard Law Firm. I just spoke them and they offer a settle amount of $5300. Do you think I can get it lower than that amount offer?
If the circumstances are right, and you go about it correctly, I do thing you can get this lower.
To get into some particulars that will be unique to you give me a call at 800-939-8357, choose option 2.
I fell in to debt after a very nasty divorce even after trying to be the nice guy never again. Anyway I have a default judgment against me from FIA in the amount of $18,978. It is 5 years old it is in TX I have moved far across the country now and have recovered to the point I can actually support my disabled wife and children. Problem is I have 5 months left on a lease to own contract. Then when my CR was pulled there is the judgment. I could make payments. I may even be able to come up with half of it borrowed to offer a settlement. I just dont know if any of this will help me keep this home we are in as I said I have 5 months to close so whatever I do would need to be quick. I just heard off the mortgage company and they stated all I need is a satisfaction of judgment letter. What are the best terms I can expect to get and is there enough time to get this off my credit record through settlement of some kind or a satisfied judgment letter.
I think you have enough time to get the settlement and the satisfaction filed.
Generally speaking, I would target 50% on this as a great outcome. There are reasons that could end up higher, and if done correctly, could be a good amount lower.
Do you want some help from a professional, or are you up to doing this yourself?
I think I screwed up big time today however I’m not sure. Was dealing with BOFA’s agency who handles collections (FIA) and was informed that my cc account was charged off however it is still in house as a courtesy provided I make some payments. I discussed the previous settlement offers which was right around 30% which were offered to me in FEB, & MAR. This particular agent told me that the settlement is going to be higher, but after a few minutes of debating with him he told me he could TRY for the 30%. but it wouldn’t be guaranteed. The reason he gave me that the 30% offer wasn’t guaranteed was due to the fact the account got charged off. I was told that if I wanted to settle, that I needed to release financial info such as income, and the reasons why I stopped paying my bills on time. I did release income info to him, and told him the reason I was having trouble paying was due to a child support garnishment & numerous other CC debt. Then I was put on hold several times for a few minutes where the agent kept coming on the line telling me he was transferring me to a verifier. The verifier basically read some disclosures to me and that was it. I had to basically ask them if I should call back to follow up. They said I would be receiving a settlement letter in the mail if it was approved. Did I mess up ? From what I understand in order for the creditors to agree on a specific settlement you need to release your financials to them. PLEASE HELP!!!! THANKS!!!
I have tended to not share information with FIA Card Services. But the times I have, or have guided customers through the process, we either got discounted settlements through, or ended up having to wait to make another offer that the customer could afford. A few instances I recall were later settled with attorney debt collectors.
Was the prior 30 percent offer direct from BofA, or was the settlement offer from FIA? Why did you pass on that deal at the time?
The 30% settlement offer was offered to me by FIA card services around the 3rd month of non-payment. I didn’t have any money at the time of the offer that’s why I didn’t take it then.
Okay, thanks.
The child support garnishment is something that will play in your favor. If I had your file I would hammer home the fact that it will be xx years before state enforcement will be out of the way so that others in line can get paid, but you have gotten some help form family/friends/other, and can offer only so much.
I would stay on top of them if you do not hear back.
I would at least like to talk to someone about this. There are other factors you got the basics but yes I think I do want some help depending on how much it will cost.
I can do the consult with you. Send an email to the address you get these comment notifications from and we can coordinate a time to speak that works with both our schedules.
Hi Michael
I have a judgement against me with BOA/FIA card services for the amount of 20,000..fell into hard times and was unable to pay…Im in NC and the judgement was initially with a law Firm in NC, at the time i did contact that firm and attempt to set up payments, we could never get a number that i could afford…since then my account has transferred to Frederick J Hanna in GA…which i was able to set up payments with and do make them monthly, i want to settle this account, do i contact BOA or Hanna? BOA is still showing the account balance on my credit report and it reflects a current date of the last payment made….I want to sell my current home and by another one but i know i cant until this is settled? Can you help? Also another question i have a joint account with my brother where i signed with him to get a ATV with Honda, long story short he didnt pay the bill and it was surrendered bc he had tore it up so bad that it wasnt worth paying for..the balance on that is about 7000…this year will be 7 years since a payment has been made on the account and my question is could this be sold to a debt collector and turn around and be a possible judgement with me and my brother on the account….im still in NC but my brother is not, he is in Seattle washington….please give me some advice on both of these matters..thank u
Fill in the consult request form and lets go from there – https://consumerrecoverynetwork.com/free-debt-consultation/
completed the form michael
I got it. I sent you an email and copied Jared, who is available to consult with you about settling.
Thank you Mr. Bovee
One last question. Would it be a good idea to at least call and ‘stay in contact’ with them and simply state my case that I would like to pay the full amount but simply don’t have the funds to do it right now since they did send me the settlement offer letter?
Also, I know that is a mission of this site to help people but I also know that you need to pay bills. Is there a way for me to give back for all the information that you share?
Thanks again
I would let them know that you are unable to continue with monthly payments, let alone come up with money to take them up on their kind offer to settle for less. You are going to look into ways you can raise money to pay them and will be in touch as soon as something comes together.
I have thought about putting up a donate tab in the sidebar, but have never followed through. I do encourage folks who find value from the site to donate a bag of groceries to their local food bank. It helps them immensely if you call ahead and ask what they may be running low of.
Mr. Bovee
I have a BoA credit card that was negotiated about a year ago under a reduced interest/payment plan. I have been making payments during that time frame however the account has not been current for awhile. I received a letter from them stating that they would settle for $3091. The current balance is $4400. I have a available $1000.00.
Would it be wise to call and negotiate with the cash I do have or simply make a payment and save for a time where I would be in a better position (I do expect to have some money coming to me from tax return, etc.. within a month) to work out a deal?
Also what is to be expected if I do settle to be on my credit report? What can be negotiated on that?
Thank you for your, attention, and response!
It would help to know who you made the monthly payment arrangement with back a year ago. Was the deal set up with BofA, FIA, or a third party debt collector?
What is the amount of your monthly payments?
Once you negotiate and pay a settlement on your Bank of America credit card, it is common to show as zero balance owed, and paid for less or settled on your credit report. That actually could be better for you in the near term than if your credit reports are showing you perpetually late, which is how I read your comment, or if your account had already charged off, but your making monthly payments on that.
The arrangement was made with FIA. The payment amount is $220. Yes the account is showing that it is late since it has not been brought up to date/current.
If I make a payment today would that reduce the chances of trying to settle for a reduced amount in a month or two since I will have extra funds to make that happen? If it does get charged off, does that mean the account would go to a debt collector?
Thank you for your awesome site here and fast response!
You generally set yourself up for success when you are not paying. There is a chance that your account would get assigned out to a third party debt collector, or even packaged up with other unpaid accounts and sold off to a debt buyer. My experience suggests you would be able to negotiate the same, and sometimes even better pay off amount, if that were to occur.
There is a risk that your account gets placed with an attorney for collection. If that happens, I think you would be able to get the same or better deal FIA Card Services just offered you out of the blue, but from the attorney debt collector.
I see more upside than down as long as you are confident the money will be there to fund the deal you negotiate.
I have a boa card that went past due during my divorce. I negotiated a repayment plan with fia and they lowered the interest rate to 2%. I have been making the payments for 4 months and noticed that this month (Feb) they have updated my credit report that the account was charged off. They still show the correct outstanding balance and the correct monthly payment. I have made the three monthly payments since I negotiated the repayment plan. FIA told me that after 6 months of on time payments they would re-age many account. My concern is that FIA/BOA has now reported this account as charged off on my credit report. I do not want to owe taxes on the balance since I am making the agreed to payments. With my payment plan I did NOT negotiated a lower balance or have the amount owed reduced so that I would not get hit with taxes on this. Can boa report this as charged off when I am making payments as agreed to.
How long did the account go unpaid before you agreed to the monthly payment plan with FIA? The answer to that may suggest the charge off credit reporting from BofA is normal.
There is no tax implication in your situation because there is no balance forgiveness. Charge off on your credit report has no impact on that.
If the account was already charged off, it can be better for your credit report, and your pocket book, to settle with FIA regardless of the tax implications.
It was past due 180+ days. Prior to making the repayment agreement I did make some small payments to keep the card from getting charged off. Right now my concern is trying to rebuild my credit score so I can buy a home. This is the only negative item in my report but it had really dragged my score down. I don’t have enough cash to offer a settlement and it would take a long time to save the money.
Will a bank usually refuse to lend money if this card shows as a charge off?. What is my best option to get this taken care of so I can qualify for a home loan.
Without the ability to settle for a lump sum, and realistically that number would be 30 to 40 percent of the balance owed today, there is not quick way to resolve it.
You can still get a mortgage with this on your credit reports, but be prepared to have to get the payment arrangement with FIA documented to show you are current with your agreement.
I have the agreement letter from boa and I keep records of the auto withdraws so hopefully that will help.
Assuming tha boa does do the re-aging after six months of on time payments will it still show as a charge off?
It is stated in my repayment agreement document from boa that they will re-age the account after 6 months of on time payments.
The charge off credit reporting by BofA is likely to stick once they reage the account.
Hi Michael, just came across this great site.
My wife has a credit card with a balance of $10,500. I have a credit card with a balance of $5,200. Both are BofA credit cards with pretty high interest rates. Neither of us have ever missed a payment.
I was recently given the opportunity to get a HELOC loan on my house for $11,500 for just the prime rate with no additional interest or points. So, obviously, that’s better debt than the credit cards.
My question is what kind of strategy can I put together for a lump sum settlement? Can I negotiate this on behalf of my wife’s credit card even though I’m not on it? Does it matter that we both share a BofA checking ($5k) and savings ($2k) account? I have pretty good credit (750s) and my wife is just a notch below that. Is it worth it to take the credit score hit in order to establish a financial hardship for a settlement or should I just pay off as much as I can n0w with the HELOC and pay the rest with the HELOC savings over the next year or so?
Some more information — We recently paid a big chunk of $900 to my wife’s credit card and $500 to mine after getting our income tax rebate. My wife also has about $10,000 in student loans at a very small interest rate and we have another $1,200 due in medical bills at zero interest. All of these accounts are in good standing. We are in Nevada.
What are the interest rates on both BofA credit cards?
19.24% and 18.74%.
What if your interest rates were cut by more than half, and your combined monthly payments for both BofA credit cards were something like 330? Could you commit to a long term repayment plan like that with confidence?
I want to eliminate affordability options that help you preserve your credit first, before jumping into debt settlement feedback.
I currently contribute $500-$550 a month towards these cards combined. Usually $350 for the bigger balance, $200 to the smaller balance. But just to be safe, I budget $500.
When you talk about cutting the rates in half, are you saying balance transfer to a better card? Or are you saying call and negotiate the rate down? Would this be preferable to taking on secured debt, even at such a low rate?
The HELOC would only require a 1.5% payment every month ($175), which would leave $325 left over to attack the remaining $4,200 on my credit cards.
I’ve done some basic math (you might want to check my math) and determined that even if I don’t get a lump settlement, the HELOC would take me a total of 34 months at $500 a month to pay off everything. That’s the $10,500 going away, and the $4,200 taking 15 months at $325 a month, then the full $500 being applied to the HELOC for 19 months after that to pay that off completely.
When I did the math for the current cards, I determined that it would take 44 months total to pay off. At $500 a month and a difference of 10 months, I estimated that the HELOC method would save me $5,000.
This doesn’t take into consideration the additional $120 a month we’ll gain in 10 months after the medical bill is taken care of.
My goal is to have six months of expenses saved up (we currently have only one month) and then be debt free, and then start putting money into a retirement plan (we have nothing in place currently, and I’m 30).
BofA does offer lower monthly payment plans direct to their account holders. You often have to have missed a payment or two before they sign you up readily. But they do regularly sign people up with lower interest rate payment plans (for the life of the balance) through nonprofit credit counseling services. You can talk to one free and get an exact to the penny quote. This would let you pay off your credit card in around the same time (44 months), but a little sooner if you apply the 120 you free up and apply to the BofA cards once the medical debts are paid.
I would likely do something like that, as opposed to missing payments to settle with BofA. I would prefer a plan that I had confidence I could succeed in, and without taking on the HELOC. Even though the math works in favor of the lower interest and duration using the HELOC, you are trading unsecured debts for a security interest in your home. After more than 20 years working with people through debt and credit concerns, I can assure you that Morphy’s law is very real.
If you are unable to get a significant amount of payment relief through BofA lowering the interest rates on both cards; could not see yourself succeeding with a debt roll up plan; and are more serious about kick starting your way out of debt and into retirement planning, than you are about a decent credit score for a couple of years, consider changing banks.
I generally encourage folks to stop using checking and savings accounts at banks they will soon be looking to negotiate a settlement with. You could keep the accounts with Bank of America open if you like them. Just start depositing your money and paying your bills with BofA again, after your settlements are done. I have a critical report on this, and several other major aspects of settling credit card debts. Read through the last seven I list on that page, as all of them will apply to you.
*** I miswrote…it was never charged off it was closed a few years ago..BOA still holds the account.
I owe BOA $12,540 on one credit card. The original credit card limit was $18,500 of which I had about $14,000 balance on it that was mine. When I wasnt making payments the balance with interest and late charges became $22,400. Just before it was charged off a few years ago I made an arrangement to make smaller monthly payments of $250/month. I have never missed any payments on this agreement but really feel like I want this debt settled already. How much do you think is a reasonable amount to offer for a settlement? It would have to be over 90 days. Should I be offering a percentage or a dollar amount? Thank you!
When you set up the payment deal a couple years back, was it with BofA directly, or some outside agency?
I generally target credit card settlements direct with BofA at 40 percent. I see them for less often enough still.
You are not likely going to be able to negotiate with BofA while you are making current payments. You generally have to fall behind in paying by several months. That means your credit is going to take a hit.
Are you okay with all that?
Hello…..Ok w the credit taking a hit as the debt is actually my 98 yrs old grandfathers. He has no need for a good credit score at this point. I was an authorized user but not a joint holder on the account. He moved in w us 6 yrs ago and I took over payments on it as I have full power of attorney and handle all his bills/finances. The bill was acquired while paying for in home care over the years. He doesnt have a savings and what he gets in ss each moth is really eaten up w his pills and medical needs. The arrangement was originally set up bye me ..directly w BOA in Aug 2011 for $400 a month. In July 2014 after a call to them at that time I was able to knock it down to $250 month which is easier to handle w all his medical bills. I’d really like to settle this bill..its the only outstanding bill in his name…but no way can we swing 40%. At the time the arrangement was made in 2011 he was 5 mo past due..not sure if that matters now or not. Since then we have made the payments on time and they are setup w direct pay from his checking account. Would the fact that he will be 99 yrs old in Sept this year any help in negotiating?? I mean realistically if he passes the debt goes w him and they get nothing more as he has no money or assets in his estate. Logically I would think a $2500 settlement would be smart. If he should live to be 100 all they would get over the next 12 months would be $3000. ???
Oh I should add that in July 2011 BOA initially refused to work out a new payment agreement. They left the account open and wanted $650 month. It was only after they sent the state to our home to investigate if there was any elderly financial abuse going on w my grandfather that they closed his account. After the state determined there was no such abuse BOA then contacted me and agreed to the $400 month payment schedule. Ive tried to right by my grandfather and take care of this but its really become a huge financial burden at this point.
At some point you just have to let go of what cannot be paid. If it were me in the exact shoes you are in, I would stop the payments to BofA, and probably right after you cleared yourself from the elder abuse investigation.
Your grandfather is uncollectable, and that will not change.
Check to be sure you are no longer an authorized user so that this is removed from your credit reports (if it ever was showing up).
I tried many times before and after the account was closed to get myself removed as an authorized user. They said before it was closed I could not remove myself as it was past due..then after it was closed they said I couldn’t be removed because it was a closed account. Either way they were/are making sure its stuck to my credit reports. I have tried to have it removed from credit report but it always stays on. The idea of just not paying anymore sounds scary to me..are you saying they wont try to go after him for the money? I mean yes he doesnt have any money to garnish as he only gets ss and from what I understand that cant be garnished. Like I said I really would like to make this right by just getting rid of it in a settlement so my wife and I can focus on whats really important ..his last months or years (God willing) of life. He’s a good man whom I’ve always looked up to as my hero and the idea of just not paying this for him..knowing it could cause some legal troubles in his name just doesnt sit well w me. As I said ..I dont understand why they are not willing to just be realistic w the fact that a lump sum now is at least better than rolling the dice w how many more months of payments they can get out a soon to be 99 yr old. They offer of 40% is just ridiculous. I’m sorry for taking up so much of your time..I guess I was hoping you would have an idea of how I could get them to be reasonable..thank you for your replies..I really appreciate all you do!
You are a good man. You want to do the right thing. Just understand bank policies can make that impossible.
You can settle with Bank of America, or a debt collector for them too. I do not see many settlements around the 25 percent range, but your situation, and this particular account, may be one that can be targeted that low with a realistic expectation of success. You will not get anywhere with BofA while current, and will need to time your negotiations with the banks settlement policies.
Read through the first stage debt settlement section of the site. I will help you along the way. Try to be ready with roughly 25% of the balance owed today, in the next 5 to 6 months, if you can.
I am not sure to what extent Bank of America can refuse to remove an authorized user from an account, and have that stick if questioned by one of their primary regulators. And I am not all that sure the folks you connect with at BofA can really get you where you need to be on understanding this. I would encourage you to file a credit reporting complaint with the CFPB.
Hello…
I called BOA today and asked to be taken off the direct debit for my grandfather’s account. I explained w him turning 99 this year and his medical expenses out weighing his ss income..being on a direct pay doesnt work for me as I am uncertain on what day if any I can pay his monthly bill. (Just an fyi..in Jan I called and told them I couldnt pay his bill on the 25th of the month as there was no money for it. At that time the woman at BOA said if I miss that payment it would cancel our arrangement and put his account back to before the arrangement and into the 180 days late..even though I’ve been paying the agreement on time since 2011. She had me pay $100 before the 25th and the remainder $150 on 2/6 to keep the arrangement).
Back to today…the man at BOA was pleasant to deal with. He took me off the direct pay and said have you thought about trying to settle this account. At that time he said he could do $7320 which is 60%. He said the dollar amount and 60% which surprised me as I thought they only dealt w whole
dollar amounts. I told him there no way I could pay that to which he then said..well I understand you’re situation but thats the best I can do. The department however could do as low as 35% but not at this time. Again..shocked that he gave a percent and this time w no dollar figure attached to it. He said currently the account balance is $12,200 (originally $22,000). He said the best thing I can tell you right now is to do whats right or your family. I said w his medical bills going up this year and this being his only debt outside of them and w no estate money at all I’m doing the best I can right now. Again he said I understand and I think you need to do whats best for your family and it’s understandable that this might come last in your line of payments. But right now the best I can offer you is the $7320. I thanked him and hung up.
There is nothing about using whole numbers, percentages, etc., to get hung up on when talking to Bank of America about settlement. I usually encourage people to use whole numbers when negotiating the lump sum payoff they can afford, and to not talk in percentages unless the bank or debt collector brings it up. It used to come off a bit too practiced, but it is not a big deal really.
If you want to settle this direct with BofA, can you pull together the 35% in, say 6 months? How long would it take?
I can pull that much together in 4 months. Ideally I was hoping to pay $1500 up front then $525 every 30 days for 2 months. I’m afraid offering that much up front would have them thinking I have more money than I do..and that the additional $1050 wouldnt be enough. Therefore I wasnt confident enough to make them that offer. I’m also feeling like I should miss the Feb payment coming up on the 25th in order to better my chances of a settlement I can afford. Am I way off on this thought or is it just wishful thinking? Thanks again for all your help!
You are not way off at all. But if you can do the 1500 in four months, and have an extra 1000 dollars to add to that within two more, I would look to settle this in about 6 months for one single lump sum payment.
You generally have to be that far behind to get the lowest settlements anyway.
Missing payments was a forgone conclusion, as your grandfather cannot afford them. You kept them going as long as you have, but can no longer. I would skip the next payment if it were me.
So I’m wondering what my next move should be…I stopped the direct pay from my bank….didnt pay the Feb 25th payment..and so far have not heard from BOA. Usually I get a letter at the beginning of the month telling me my payment for 25th is approaching and the amount due. Odd isnt it that I never received that letter after missing one payment? They have sent me nothing thus far. When I called to make arrangements on my Jan payment the rep did tell me I needed to pay something so that it wouldnt go into 180 days late..something about missing one payment would cancel our agreement and go back to 2011 when I was just shy of that 180 mark.
If that happens you will have an earlier shot at settling with a debt collector than previously discussed. Keep as much money in reserve as possible and be ready.
BOA called yesterday. I again explained that I have been paying my grandfather’s bill for as long as I could but unfortunately his medical needs come first and they have risen over the years to the point where I am over extended paying those and this cc bill. The woman on the phone said she understood however even a small payment of $123 this month would keep this from going to a 3rd party. She offered to go over my grandfathers bills and do another financial thing to possibly work out another payment agreement that could be lower than the $250 mo. I again explained that she doesnt get it. This man will be 99 this yr. His small ss checks dont even cover his current medical need/medications. He’s living w me. He has no savings, no checking, no life insurance. There’s nothing to go over..he has nothing. She said well in that case it’s going to go to a 3rd party if u do nothing. I said I’m sorry but I’ve paid this bill since 2011. It’s gone from $22000 to $12000. I’ve honestly done all I can. She said ok and hung up. So my questions are..is there actually another 3rd party? Or is this 3rd party just another division of BOA? Is a 3rd party where I have the best chance of working out a settlement or should I be calling BOA right after I miss this months payment and try to settle w them? Finally, when this 3rd party contacts me…will they tact on more fees? will they be willing to settle up front or do I need to push them off and wait another 180 days? Very confused and anxious to get this thing settled. Thanks again for all your input!
FIA Services is a debt collector connected to Bank of America. Any other collection agency will likely be independent. It is okay to let this go to a collector in order to settle.
Tony, everything you shared with me so far tells me you are in no way on the hook for this debt. You have been paying because you believe it is the right thing to do. I completely support that. But please understand something… Bank of America does not care if your grandfather gets his meds or can afford medical attention. They just want to get paid. They are not being mean about it, but that can be just as cold.
I should point out that I like BofA. I think they have consistently offered some of the best options and results for resolving unpaid credit card bills through settling for less than the full balance owed. And the people you speak to at BofA are just like you and me, and can empathize, sympathize, or any other ize. But their policies are what will be running behind the scenes, and after each phone call you hang up from.
The account will go to a debt collector, or be sold off to a debt buyer. You will likely settle with the third party at this point, but I think it is worth trying to settle with BofA when you miss that payment, but only if you are rock solid about settling in the first place.
The third party can tack on interest if the contract allows for it. Depending on how quickly you choose to settle the debt, and for how low you negotiate, those extra dollars will not amount to much, so probably not something to focus on much unless settling will take a long time to save up for.
Tony – BofA has a choice about how they deal with your grandfathers account. They could have a little box to toggle on the screen for the customer service and recovery reps to flag the file as noncollectable and not to sell or assign to a third party collection agency. They even have software available to them to skip trace your grandfathers assets and show them the probability of collection from here on out is low (so as not to take the word of some cagey senior citizens). But BofA generally fails at providing a measure of dignity to their elder account holders in this regard.
I get where you are coming from. I lost my dad last year. If he had an account like this hanging over him as he deteriorated, and I felt I was honoring him by paying it, your damn sure I would, and for as long as I could, just like you have done. But I am confident that when that became a burden, he would have agreed that enough was enough.
If you want to talk about any of this, fill in the comment box to the right at the top of the screen. I get a copy of those submissions, so I will respond to you directly.
Hi….Ok…so I stopped the direct pay w BofA. Missed one payment and have now received a letter stating the account has defaulted due to missed payments and the outstanding balance has been charged off. It says call before April 28 to discuss payment arrangements or to make payment on the remaining balance of $12,316….(the original balance was around the $22k mark give or take a couple hundred dollars). So at this pt what do I do. Do I call and try to settle? Or wait for another letter? I can settle right now for $36oo. Anymore I will need another month to come up w more money. Thanks again for all your help. I think I am near the end..or at least hope I am.. w this debt.
There is no harm in calling now to negotiate the settlement. It is common for things to take a bit more time to develop in order to get the best deal negotiating (lowest settlement), but with BofA charging off the account with one missed payment, the account has had past payment issues, and is seasoned enough to settle.
This letter dated April 14, 2015 that states it has been charged off is still with Bank of America. The number they r giving to call is 1-866-495-8436
Go for it. That 30% target for settling with BofA is what I would use if it were me.
Hello again…So I called BofA and once again explained my the situation to them. They went through a quick financial which once again showed my grandfather in hole every month. The rep on the phone didnt even want to hear my offer but rather said he would go talk to his manager and be right back. He came back w settlement offer of $5000 to be paid in one lump sum. He said he could not offer a payment plan on that ..not even for a month or two. I offered $3600 and he said w out a power of attorney being sent to them w the raised seal on it he could not even bring a counter offer to his manager. Now I’ve sent them a power of attorney back in 2011 which is how I have been able to negotiate all these yrs..yet suddenly they dont have it and will not discuss this matter further. This is beyond frustrating. The letter said it was charged off and needs to be taken care of by April 28 yet today he said mail the poa to them in Texas. When I stated there is no way I can get a copy w the seal to them by the 28th he said ok then lets get u on a payment plan.What the?? He said pay $93 for this month and call in to pay the same amount by the 30th of every month from now on and this will keep this account on their books and out of collections. Can you pls explain to me what is going on?? I thought it was already charged off and about to leave them..now suddenly I’m back on another payment plan. Yes..I paid the $93 for this month. So confused right now. I thought it would be simple…he offered 40% ..I offer 30% and maybe we meet some place in the middle..instead I got this thrown my way.
They are just doing the job they are trained to do. You need to let the account go behind further. Let them send it to collection. You may even settle for a better deal.
Tony, I would like to offer to help you settle this. There is no fee or cost to you. If the next time you call to negotiate the lump sum lower balance pay off, you experience anything like this, just hang up and call me. I will email you my cell phone number, just hold onto that, or call and talk strategy with me for next time.
Thanks for the great input today Michael.
Just to follow up on your questions:
Law Office of Rory W. Clark
I am calling BofA on Monday to see where the second account is or which company is collecting on it, and I am going to try and settle this one on my own if at all possible, and I will post an update here.
I would like to settle both accounts, but I only have a limited amount of capital to do so, and if I am sued, I will be in touch with you for a referral defense attorney in my area.
Thank you again!
CH
Hello Michael,
Wow I am glad I found this site! Your advise is great and refreshingly accurate compared to what I have read and heard.
I need your advice.
I have three credit cards that I had to stop paying on due to financial hardship and health issues back in 2012-2013. One card was with Citibank for $10k, the other two are with BofA $20k, and $37k.
I stopped paying on all three cards back in July 2013. I researched and selected Freedom Financial to help me. I made monthly payments to Freedom, and last August they settled my Citibank at 40%.
Since then I have been calling Freedom for a update on my BofA accounts, but the only response was “we are talking to BofA and trying to work out a settlement”.
This week I received a letter (30 day collection notice) from a local law firm to collect on the $37k balance for FIA-BofA.
This is the first time in two years I ever heard from anyone regarding the BofA accounts.
I contacted Freedom and they said I just barely had enough for them to negotiate a settlement.
Today a rep from Freedom called me and said the law firm did not accept Freedom’s 30% offer, and countered with a 65% settlement offer of $24k. I declined but asked the freedom rep to counter at 50% with a $13k lump payment and spread the remaining balance over 9 months.
I am now thinking about contacting the law firm myself bypassing Freedom and trying to settle for 50% of the $37k debt and avoiding paying Freedom Financials fees.
Plus I still have the other BofA $20k that I am thinking of calling BofA directly and trying to settle this for 35% / $7k and pay it all off in one payment.
I have the means to do both as I outlined but nothing more.
I would appreciate any input or advice on both BofA accounts.
Thank you,
CH
I am a big fan of doing as much of the settling you can on your own. I am not sure how much better you will do than the 65 percent on the table now for the larger Bank of America balance. Once an in state attorney is collecting on this type of account, your risks of being sued for collection increase dramatically. Who is the attorney working the file for FIA?
Do you know the name of the company collecting on the second BofA credit card?
BofA charged off my 180 days past due account to an outside agency back in December. I have contacted the agency once just to make contact and acknowledge debt. I was not in a position to provide a settlement amount at the time and they were desperately attempting to lock me in and commit to an offer at first contact. After three weeks and harassing calls, I can now offer 20% of the 45K debt. Should I call and firmly state my offer at 20% or should I leave room for negotiations? Also, how do I know if I am dealing with a collection agency or attorney? I am certain they will file suit and judgement due to the high balance. Thank you in advance.
Post the name of the company collecting. I can tell you if they are an agency or collection firm.
Settling Bank of America accounts for 20 percent is not common these days. Can you convey a sincere hardship? Does your credit report show you are paying other bills on time? Are there other collections showing on your credit, and if so, how many?
Hi Michael,
Coming across this site has been very useful to me, so thank you in advance. I’ve had my BofA credit card since 1998 and as of last year ran into some financial troubles that prevented me from paying anymore on the card. Balance is about $11k. I was 30 days late beginning in February 2014. Account closed and was charged off in September 2014. In addition to the “charge off”, my credit report also says that $11k has been “written off.” I’m not sure what that means or if it’s synonymous with charge off. I have been getting collections calls and also a couple of letters from NCB. Most recent later came in a couple weeks ago. On my credit report, it still looks like BofA owns the debt. I’m assuming they have just hired NCB to collect. I cannot afford to pay the full amount and would love to settle. I have not taken any phone calls or responded to either letter from NCB. What’s my best course of action to settle? I’ve read so much conflicting advice that my head is spinning. Would love to avoid the hassle of going to court. Thanks again for your help.
Is the NCB you are referring to National Collections Bureau Inc?
Does BofA show a balance still owed them on your credit report? If so, they likely still own it, and NCB is working for BofA.
I would target between 25 and 40 percent in your settlement with NCB. Can you pull that amount of money together, and if so, how long will that take?
What is the conflicting advice you have read?
Michael,
Thanks for the quick reply. NCB that I’m referring to is this company. https://www.ncbi.com/.
Yes, it still shows the full amount on the credit report. It doesn’t say any other company’s name on that report.
Yes, I can pull that amount of money together within 2 or 3 weeks. Should I just call NCB back and start the negotiation process? What if they just flat out say no and insist on the full amount? Has it been your experience that they will always try to settle the debt for a lesser amount before taking legal action? What leverage do I have to negotiate?
It’s just reading all of these debt and finance related forums and reading about everyone’s different experiences that is making my head spin. Until I came across your site, I’ve read that you should pretty much always send a validation of debt letter. I know this debt is mine and I just want to get it taken care of so it didn’t make sense to me. There are other things I’ve read about “pay to delete”, which to me sounds like a real crapshoot. Your website has been the best one I’ve come across so far, so thank you for everything you do!
It does appear the Bank of America still owns it, and NCB Management Services is collecting for them. Read through the tips and suggestions for calling a debt collector to negotiate.
It is my experience that when you are proactive about settling, and have the money to work with, you can get something negotiated. Your leverage is, generally speaking, the fact that you have not paid for this long, and the likelihood you will pay anything at all is small. That means you can capitalize on collection trends. Your leverage can be more specific to your situation and you personally. The reason you were unable to pay, what ever cash flow short fall persists, other collections showing on your credit reports, all will help to paint a picture of someone who, while motivated to pay for the past, is limited in resources at the present.
Waiting to be sued, or using tactics you may read about online, are often the choice for someone who has no ability and/or no willingness to fund a settlement (even a great offer), or is simply in denial about debt. I look at debt validation as a tool, and one with limited utility at that.
Pay for delete is unlikely in the extreme with the situation we are focused on with BofA and NCB Management Services. Are there other debts that you need to resolve than this one?
Thank you for the links.
I do have another credit card with a $6k balance on it and a car loan. Both are in good standing. I am looking to pay off those accounts as well. Should I wait until I get this BofA account settled before dealing with the other two?
I would not do anything to pay off, or pay down, those accounts that are current. Just keep paying them until the BofA account is resolved.
I’ll leave those accounts alone and contact the debt collector next week and start negotiations. I have a BofA checking account. Are they able to peek at that account? I almost feel like I should move whatever money I do have out of my checking and into a different bank altogether. Or maybe I’m just being paranoid.
I regularly encourage limited use of a checking or savings account if it is at the same bank as a credit card you will be trying to reach a settlement with. You do not have to close your checking account with Bank of America, but I would not use it for anything, and keep very little money in the account, until I am done negotiating and the settlement has been paid. This goes for negotiating with a collection agency for BofA too, especially if you are trying to get a settlement deal from NCB Management Services that is lower than what they have automatic settlement offer approval for.
Michael,
Just wanted to send an update to my situation. I spoke to NCB and was able to negotiate a settlement for $4k. It was relatively painless. The thing that made me most nervous was that NCB needed to know about all of my finances before being able to submit the offer to BofA. Net income, monthly expenses, other debts, etc. However, they came back with an answer within 2 days, accepted the offer and sent me a letter stating that the account would be settled after paying the $4k. Maybe I could have settled for a little bit less, but I was able to come up with the money and didn’t want to deal with the back and forth haggling.
The rest of my credit report is stellar (score WAS over 800), so now I’m just sitting and waiting for it to build back up. So, again, I thank you so much for your time and advice you have given. It has saved me thousands.
Found a BOA charge off for a credit card on my credit reports I am assuming it was from a previous marriage. I have called BOA and they say there is not a balance so I asked what was charged off and can I pay it off. Which I am wiling to do in order to have this removed from my credit report. But they are refusing. Is there anything I can do
Call me at 800-939-8357 ext 2 for a free consult, or fill in the Talk to Michael form in the right column of this page, and I will email you about setting up a time to talk that works for you.
There are many different strategies for settling with Bank of America. I just need some details from you in order to offer the feedback you need.
Hi,
The Bank of America credit card is through an outside agency. I believe it’s been charged off. I hVe another question. I owe comcast tv 250$ . They say they are not allowed to settle for less than 80% after 18 months of non-patment because the account is still owned by comcast and they control what can offer. He said this is true of all utility companies and such, like cable companies. Is this true? He also wants me to give her the number of a prepaid debit card to hold the 80% settlement offer. Is that suspicious at all? Thank you 🙂
It is true that whoever owns a debt is the one that ultimately sets policy and approves of settlements they will accept. But saying you are not allowed to settle for less than 80 percent, on all of those accounts you collect on, has not been my experience. I will give the guy a break in case hw is a front line collector that only works client files where that is true to him.
I would not offer anyone a debt card number of any sort in order to “hold a settlement”. I would not call it suspicious (though fake debt collectors are looking for that info to rip you off), as it is a legitimate collection tactic to get you to commit to the payment. What is the name of the collection agency?
Since this is FIA Services versus a debt collector, should I have a concern with providing this information?
It is rarely going to be in your best interest to provide all of that type of detail to anyone you are trying to negotiate a settlement with. Not unless every bit of the details support what you are trying to accomplish.
FIA Services can get a bit obstinate with some collection files. What percentage of the BofA balance are you trying to settle for?
20%. However, they don’t show a hardship in credit report and they need proof that I have accounts that have actually charged off to prove that are not the only one that I am not paying. Basically they don’t want to be singled off I can pay everyone else. Please help!
Twenty percent settlements out of FIA are not common. Targeting that amount means getting an exception approved, which may be the driver for the documentation request.
Are there other major creditors you are not paying? How many, and can you see that fact on your credit reports? What documents do you have from the IRS that will substantiate the issue there?
I can help you as far as I can with our comment exchange. That is often enough. But there are situations where you need to be talking and working with a pro. I cannot say this is one of those, but it is starting to appear like one.
You may want to consider calling a debt negotiations professional.
My account has charged off with Bank of America. The only thing that is standing in the way of an offer is that they are asking me to prove other defaults. Other credit card charge off letters, IRS potential levies, etc to them. My concern is that they could use this against me or potentially contact the persons identified on these letters. Will I be providing them with more information that they may need. What if Bank of America contacts the charge off attorneys or IRS, etc and indicate I am working with them on a settlement. What should I do or not do?
Who is it that you are dealing with, is it BofA directly (post charge off accounts normally do not stay in house of the bank proper); is it FIA Services; or a debt collector (post the collection company)?
Summary of settlement terms with FIA –
Balance – $36k
Settlement offer – $9,000
Past Due Amount – $5,500
Days late ~180 days
FIA service will report the account as ‘paid, settlement for amount less than owed’. HOWEVER, it has come to my attention that the account will still be in past due status @ $5,500. Why would a settled account still reflect this past due amount? How can I get request FIA services to change the past due to $0 since the account is now settled with a $0 balance?
Is this an account that you settled with FIA already (as in paid the 9k), and they show the past due 5500 on your credit reports currently?
If so, filing the below referenced complaint applies right now. If this is a settlement offer on your BofA/FIA account that you have not yet paid, you may want to consider not letting a roughly 27 percent settlement slip away, so take them up on the deal and pay it now, followed by filing the following complaint.
FIA seems to want to do the same thing I describe CapOne doing when credit reporting about credit cards they settled.
FIA and Bank of America should not be reporting a balance as still being owed on an account that they agreed to settle for less than you owe, thereby agreeing you owe zero left over after you meet the terms of the settlement. To continue to report a balance owed should be considered inaccurate reporting at that point. It can damage you with regards to future credit transactions for 7 years if it skews your debt to income ratio, for say, meeting qualified mortgage rules.
No one has been able to show me anything that allows BofA or FIA (or CapOne) to report a balance remaining as owed when everyone agreed that there would be no balance owed after the settlement terms were met.
Why in the world banks with deep pockets want to risk the exposure to mass litigation this represents is beyond me. They cannot be doing it for some complaint reason as far as I can tell, as the it is a conscious and obvious decision to be out of compliance from my view. The only thing I am left with, while complete conjecture, is that it is done out of spite because you did not pay your whole balance off. But then, why agree to accept less at all?
You have a couple of options:
Stick to your guns if the settlement is not paid yet. Tell them you cannot agree to a balance continuing to report in violation of federal credit reporting laws. Tell them they either change their tune, or you cannot accept the deal.
You can accept the deal; wait 60 or so days to see how they report it, and file credit reporting disputes with the bureaus and FIA directly. Depending on the outcome, you would progress from there.
You could file a complaint with the CFPB about this practice and see what comes of it.
If it were me, I would probably take that deal if I had not paid it yet. Once the funds clear, and I see any worrisome credit reporting, I would then file the complaint with the CFPB. That will result in your complaint being put in front of an intelligent set of eyeballs at FIA or BofA (whoever is doing the wonky credit reporting). That should correct or clarify the issue at that point.
I just do not get this stuff. Does FIA disclose to you that you agreeing to something that the Fair Credit Reporting Act protects you from? No they do not, and I am not sure they could “disclose bad behavior away” like that.
Anybody out there need a soap box (snark off)?
Well, BofA declined the 25% of balance offer and it’s now at 50% of the balance. The reason is that they show that I have been paying other credit cards which is not the case since they are clearly past due 8 or more months and one has actually charged off. There is one payment on a vehicle that is being paid by my parents but they are not willing to pay any of my credit card debt for me. Now I have no choice but to let this one charge off as well. I am having anxiety attacks because I fear if transferred to a collections/lawyer, I am a candidate for suing.
Try not to be anxious about what happens with where the account lands next. Instead, look forward to finding out who it is Bank of America sends your account to for collection, because that is likely who you will be able to resolve this with, and put it behind you.
There is very little reason to allow a collection account to reach the point where you are sued, not when you are motivated and have some means to prevent that from happening. There are normally clear indicators you are on your way to being sued. Keep this thread updated and I can help you avoid that.
Hi Michael,
I received a letter today from a law firm representing BOA for a balance of just under 12k. I have tried working with FIA /BOA in the past; signing up for a payment plan, which ended up being a fiasco; money taken out at the wrong time, money coming out twice a month etc. FIA refuses to work with me, because I will not give them access to my checking account for automatic withdraws.
I am in no position to fight this, as my wife is possibly losing her job again, which got me into this mess, and we are still upside down in our house. Our marriage is already strained
My last payment was in Sep of 13. My credit report shows four different charge offs from Dec of 12-Dec of 13.
I can comfortably make a 300 dollar payment this week, and a second one by the end of the month.
If you can avoid the payment plan trap with debt collectors for FIA, I would encourage you to pursue that.
Assume for a moment you could settle the full balance for something like 4k. Could you tap into resources to come up with that amount?And if so, how quickly?
If I can pay up, Can I ask BOA to clean my record with the bank? Transunion looks okay, except for a balance and two “hard inquiries” from the bank. When I pay up, what should I request the bank to do for my Transunion? And what about for their “internal” records?
Les – I need more to go on than what you shared in your comment. Please post more details about your credit card or bank account with BofA.
Been reading through the questions/comments – great info and resource.
Currently, I have a debt of 11k with BofA/FIA that has been turned over to NCB Management Services (debt collector).
I (fortunately) have no experience with this situation. Due to an unexpected career change and medical bills, I got into some financial challenges (after years of an 800 FICO score).
They offered 60% lump sum or, to make monthly payments toward a settlement. I’ve read that it’s best to start with a low offer (10-15%). Is it reasonable to start with an offer of 1200? Or, is that ridiculous? What would you suggest? I don’t foresee in the next 6 months a great change in my ability to pay so I don’t want to lock into payments. The most I could pay today is likely 2000. I hoped that calling on the last day of the month/quarter/year might make a difference but they advised calling back next week to see if I can put together 60%.
Also, would it be advisable to send a letter of an offer to them? They guy that has been assigned my account is very unpleasant. Just thought I’d see if you’d recommend sending a letter, explaining the situation and that this is what I have to offer today and I know my resources will continue to be limited for the foreseeable future – but, this will allow this situation to be settled today.
I’d appreciate your advice.
I would not be overly optimistic that a 20% offer will be accepted by NCB Management. You are likely looking at 30% as being the lower end of realistic. But you can try and get the 20% pushed through. If you do not, call them back when you are closer to being able to.
Some settlements can be split up into a couple of payments, but it is often best to leave payment discussions for when you have no choice.
How long will it take to save up another 1 to 2k?
Thanks for your insight – I’m not certain on another 1-2k, maybe 4-6 months.
They asked about starting to make payments – I’d rather avoid that (in my mind) because I’d rather pay a lump sum than make payments that might not be considered with a later payment. Would you suggest saying, I’ll wait until I can make a lump sum payment or say, here is what I can offer today, this is how much within the next 6 months?
Was sending a letter an inefficient way to proceed? This guy didn’t seem like he would be good to deal with – maybe they’re all that way!
Thanka again – just trying to get this behind me and find the most effective way to do it.
Payment plans often mean paying more when settling. There are instances where you can pay in 2 or three installments and still get the best deal.
If you can raise the additional money in 3 to 6 months, you are likely in good shape. Ask NCB how long they will have the account, before they lose it, next time you speak to them. Debt collectors will often tell you openly how long you have to work something out with them.
Yes, you can start off with a low offer like what you have available, and be prepared to hear no. Let them know you will try to pull together other resources, but this was all that you could do, and do not expect much. You can call back a week later and reiterate, just to see if they soften up.
Sending a letter is typically an inefficient way to negotiate.
The debt collector you spoke with being a gruff, or pushy and abrupt, is not all that uncommon. There are certainly collectors who get their job done as good, or better than others, while being easy to communicate with. You could try asking for another person to speak with by connecting with his supervisor. At the end of the day,this type of debt collector is just as interested in getting a deal done with you, as you are with them. Some just go about it better than others.
I owe about 10k$ on my credit card, is there a possible way to pay a lump sum settlement that doesn’t amount 10k, but less?
Yes, it is completely feasible to negotiate a lumps sum payoff for less than the full 10k balance owed.
Are you already late with your regular payments on your credit card, and if so, by how many months?
If you are dealing with a debt collection firm, who is that?
I have been late for about 2 months, I tried calling Bank of America/ fia card services to negotiate a settlement but they told me this option is not available for me.
Okay, you are months too early to offer BofA a settlement. Your best deal, and often any ability to negotiate any lower payoff amount, tend to happen between 150 and 180 days of being late on your credit card.
I have a series of articles up that explains the timing and how to negotiate settlements directly with banks. Start here and follow along through that section: https://consumerrecoverynetwork.com/what-is-debt-settlement/.
FIA Card Services/Bank of America is suing us through their attorney/Portfolio Recovery Associates for a 10,000 debt. The last payment made was June 2012. When we fell behind in payments I tried to negotiate a new payment plan with BoA with no success & now they are taking us to court. We are not in that much better of a situation now, but do not really want to go the bankruptcy route if at all possible-husband has his own company and fears many complications, etc. However we can not afford a large lump sum to settle either. I work and would like to avoid wage garnishment. I also am coming to the final months of paying off a judgement for another CC. We are located in NJ.
Should we attempt to negotiate a settlement or down payment and monthly payment plan with them prior to court ? Should we mention bankruptcy if they do not seem willing to work with us? Or would it work in our favor to go to court and hope for mediation?
Debt collectors hear about how bankruptcy is looming in response to their efforts too much. And New Jersey is not a very debtor friendly state when it comes to the courts.
I would suggest you work with a debt defense attorney to defend against this. The goal would be to get it dismissed, but you could also end up with a much better settlement or payments, that what you would get now.
Post the name of the largest city near you and I can email you contact info for attorneys who fight this type of stuff for consumers as a regular part of their practice.
law firms name is Weber and olcese PLC. I have a large student loan payment that I am currently servicing and I lost my job and was a student during the time it went into collections. Grand Rapids is a large city that is nearby. What would be a settlement that you think they would take? Thanks again.
I sent you an email with two different attorneys in Grand Rapids with the experience you need.
Settling with FIA at 40% of the balance is not always a gimme when they are not suing. Realistic settlement targets having just been sued tend to start at 50% for the hardship scenarios, and go up from there. There are exceptions of course, but nothing you have shared would suggest they would make one.
I would consult with one or both of those attorneys first before deciding what my next move will be.
Hi, Michael. Thank you for taking the time to reply to all these messages they have been the most helpful information i have been able to find. My account with boa was opened in 2004 and became delinquent in 2011. The account was opened in Va but i moved to Mi in 2012. I received an oder regarding alternative service on my door from a law firm c/o of FIA services , N.A. It seems like it is incomplete with key portions missing and a letter from a judge not addressed to me expounding on the benefits of an organization that focuses on mediation . The account amount was 8500. There is no corresponding case with the number provided in the schedule. I was hoping to settle with an eye out that i may need to take student loans in about a year. Should I retain council? Or should i send the law firm a settlement letter with an offer of $3000. Or should i start with less as that is the upper limit of what i can offer lump sum. Thank you in advance
I do not think the odds of settling that balance with FIA Services for 3k are that good. If you can show limited resources, full time student, sincere hardship… maybe. Who is the law firm suing? Can you pull together additional money quickly?
You can get in touch with a debt collection defense attorney and have an initial no cost consult to look at how defending the suit can buy a great deal of time, or possibly even get dismissed (though with FIA that could be more difficult). Post the name of a nearby larger city and I can share some contacts with you.
Thanks Mike!
I would say we are pretty open on the car other than I don’t want it to be more than a few old with lower mileage. My daughter likes jeeps (wrangler) but also Nissan altima, Kia optima and in hey streams am audio a4. I have promised her a car in November so not sure on delaying another few months after that. P if I try to negotiate with FIA now, won’t my score take a hit before car time?
That is the reason to delay by a couple months.
You may be able to work around this by negotiating the settlement with FIA or card services, and set up the single lump sum pay off for, say 2 to 4 weeks of the day you reach your agreement with them. Once you have the settlement agreement from them, and some time before the credit reports are updated, you could shop the car loan, and get that all completed before payment for the settlement is due to FIA.
What I outlined is just a creative approach to consider. If for some reason things do not go perfectly, you will likely still be able to finance a car even with a recently settled debt. You should be ready to pay a higher interest rate, but that you may be able to refinance out of later. Where do you bank? You may want to check with them about what you can get approved for a loan as a start.
Hi Mike, I must say you are a great wealth of knowledge and experience and I really appreciate the help you provide to consumers who need it! I am one of those who needs some guidance. My details: Had a BOA credit card t opened in 2004 hat I paid timely up until 3 years ago. Made special arrangements with BOA to pay $90 monthly until debt was paid (total $5000). I kept the arrangement up until last year when I had some unforseen finacial issues come up. Amount past due at that time was $600 and total owed was $1100. Now the account is showing CO status and I have received a letter from Client Services where FIA placed the account to collect payments. At the bottom of the letter it says the account is issued and administered by FIA Card Services. I’d like to know how to handle this in the best interest of my credit standing. I am in the mid-upper 600’os on all 3 credit bureaus and the BOA account is listed as negative closed (charged off) account by BOA under revolving accounts. There is no listing under collections and the last update made was 9/2013. My scores will continue to rise due to substantial reductions in overall debt and there is 1 paid collection ($100) that will probably be deleted within 30 days. Should I do something with this account now? Should I try to settle for PIF or PFD? Is this possible? I certainly don’t want to hurt my score by changing the status now if I don’t need to…. I hope I have given enough information but please let me know if you need more. I am anxious to get your feedback as I think the 700’s are close and I don’t want to jeopardize it in any way! Many thanks Mike!!!
It is unlikely to get FIA Card Services to agree to a pay for credit report delete. Getting them to show paid in full now that the account is charged off by BofA is really no different than the account showing settled for less.
The best thing you can do for your credit is going to be getting the balance to reflect zero, and sooner rather than later, as your account could still end up with an additional negative collection item when sold off to a debt buyer.
Whether, or how much your score drops from settling, will depend on too many things. But even if it does drop, it will be short lived given what you shared about the rest of your reports.
Do you have a credit or financing goal in the next 6 to 12 months?
Thanks so much for your feedback Mike!
My short term goal is to buy my daughter (HS senior) a car in the next 30-60 days ($15k financed) after a $5k down payment. I’ll need the best financing I can get since I need a reasonable monthly payment ($200-$300) with a 48-month loan. After that, I would like to look into refinancing my townhouse for a lower interest rate and maybe in 2015 look into purchasing/leasing a car for myself (my SUV is 13yrs old). I’ve never leased before but I hear it requires top notch credit scores so I need to be prepared for that.
With the BOA $1100 charge off, what are my options? Should I contact Client Services and ask for a settlement amount or PIF? Can I ask for anything in return for this payment? Do I wait until after the car financing in November to contact them? Now that I’ve told you my current life story, WWMD? (What would Mike do?) 🙂
Many thanks!!!!!
Melissa
You may want to look into the auto financing before negotiating the settlement with FIA, but your credit will be something FIA and client services can view. And the way your credit report is viewed can impact the settlement savings you are able to negotiate.
You will want the FIA balance showing zero before you go to refinance the town home, as that unpaid collection will hold up your loan. I would want 6 months of seasoning, if not 12 (where my credit reports reflects BofA settled and zero balance for a full 12 months), prior to the refi.
If it were me, I would negotiate with client services now, targeting a 40 to 50 percent settlement. I would then look at the new car purchase around November when good deals on prior model years are aplenty. But would also be ready to delay the purchase by a couple months too.
Do you happen to already have the make and model of the car figured out?
Hello Mike – do you have a target settlement offer range for BofA credit card when the account holder has passed away? There are no surviving spouses or children and very few liquid assets. Nobody else is responsible for the debt except for the estate. The account balance is $10K. I would like to avoid probate.
How long has it been since payments were made on the account?
Have you already been in contact with BofA?
Are you the administrator? Do you have a POA?
Account is current. I am the administrator and beneficiary of the will. I have a POA. I have not contacted BofA.
Okay, thanks.
They may want to hold out for payment from the estate unless you can impress upon them effectively of how there is nothing to get.
You cannot call BofA to settle right now while the payments are current.
Call in for a no cost consult to 800-939-8357. Leave a message if no one picks up and a CRN specialist will call you back.
Hi Mike,
I recently finished using Freedom Financial to help get my debt paid, I reached settlements with all the creditors with them and then on my own settled two. My question is, all the sent me was letters showing they were paid, how do I got about fixing my credit or applying for new credit? I have not gotten anything in the mail from any creditor showing account closed, do I need to call them all and close? I appreciate your help.
Pull a copy of your recent credit reports. You have access to one free one every 12 months from the three majors at http://www.annualcreditreport.com
When you have a current report in front of you, post a reply here with what you see all of your settled debs are showing. Are all balances showing settled or paid with a zero balance? If not, which ones are not updated?
Once you know things are reporting accurately it is time to take rebuilding steps, and I can help with that feedback, and actions steps too.
Hey Mike,
Looks like all is reporting ok, all show CO or CLS. Is there anything else I need to look at? Please let me know as I would like to start trying to get my score back up, other than last 9 months my credits was in high 700s. Thanks again.
Gary
Great! Save a copy of that report for later comparisons if you ever need to.
What types of active accounts do you have on your credit now (mortgage, car, other)?
Did you keep any open unsecured accounts out of the debt settlement program with Freedom Financial?
Right now the only thing I have open is my mortgage and car, which I have always remained current. I have copies from all 3 agencies as you stated. Thanks again
Okay. I would look to first establish one unsecured credit card. If you have to start with a secured credit card, try to find one that has a history of converting secured cards into unsecured later on. Bank of America has had a good secured credit card program. You deposit 500 or more into an account and do not touch it. You get a secured card with a limit at the amount of money you put into that account. Use the card,and pay it just like a credit card every month (pay it to zero). Your money you deposited in that account stays there. It will not be touched unless you fail to make your regular monthly credit card payments.
After some time, 6, 9, 12 months, of using the card and making on time payments, Bank of America can convert your account to unsecured and you get to take your money out that you originally deposited to secure the account.
Credit unions will often offer something similar, as do other national banks.
I also like the credit matching system at http://www.credit.com. You can use their offers to match up with a card you are the likeliest to be approved for. Capital One is often a good rebuilding credit card to start off with.
The number one ingredient to improve your credit after what you just accomplished is time.
Got it, thanks Mike.
I have 2 active Credit Cards (BOA 15K and Discover 8K), due to a recent loss of employment, I can only keep one up to date with payments on the Discover card because the balance lower and payments are more manageable. I saw in comment strand above that BOA will only settle after 150 days past due and usually for 35-45% of balance, correct?
Are they less likely to settle if I am current on all my other debts? Which include my mortgage, utilities, etc. I have other open lines of credit but they do not have balances & I do not have a car payment. My credit score is excellent at this time (Over 790), how much will it drop each month if I do not make payments on the BOA card for next 5 months?
Your credit score will drop precipitously as a result of not paying BofA until settlement. Your score will recover relatively rapidly though, all things being equal.
You will likely encounter resistance to settling favorably, or at all, if you are current with other unsecured creditors. Questions:
Can you afford roughly 480 a month for your BofA and discover accounts, if that were a fixed amount?
How will you manage while unemployed (spouse or significant other income, unemployment, etc)?
Realistically, how long would you estimate being unemployed?
I just left the military due to government downsizing. I was offered and took an early retirement because it was the best option for my family. I have decided to go back to school with my Gi bill and work while I do this. My retirement , Gi bill stipend , and minimum wage job are not going to cover everything that I need it too and I’m sitting on a 21k credit card debt with BoA that I’ve never been late on. I wasn’t expecting to leave the military like I did and want to pay back what I owe. I know I’m not really delinquent yet but was wondering what my best course of action is ? Do I call them and give them a heads up about my situation? Is a partial payment better than no payment? It’s going to take about three years to really get back on my feet with schooling behind me. What should I do?
John – What other debts are there besides this larger balance account? What is the interest rate on the BofA credit card?
I had a line of credit extended to me by BofA back in 2008 for $42k. I lost my job in the spring of 2009 and was able to get my credit with them modified through FIA down to $660 per month from $970 per month and 4% interest down from 22%. My wife and I both lost our jobs in the summer of 2011 so I was able to maintain payments until October 2011. FIA offered a settlement some time ago(2012), but our hardship led us to move in with family in Va and we could not afford the lump sum. I received a notice that I was being sued in December of 2013 for $28k and answered it in writing. I appeared in court in Feb 2014 for a scheduling conference and met with the FIA attorney. We agreed to schedule a trial(Dec 2014) and he said we would work out a payment arrangement before then. Dummy me believing/trusting their atty. I heard nothing for a few months and received a packet from them which included admissions in June 2014. I sent it back filled out and have recently received a notice for a motion for supplementary judgement hearing dated for this Friday Aug 15th. I’m back working and my wife has recently found part time work. I know that if it is granted they can garnish wages/levy our accounts, etc…My fear is that FIA will levy the small amount we have in our accounts if the judgement is granted. We have just starting renting a new town home in June and want to really get back on our feet financially. I am considering filing BK as a levy would devastate the little progress we have made. Any advice would be greatly appreciated. Thanks in advance.
Art
What other debts do you have aside from this one that they are suing for (whether past due or current with payments)?
We have a couple judgment’s that we haven’t heard anything from(Capital One-$1500 & JCPenney-$1000) that are on our credit report and at least a year or two old. We had our bank account levied by Discover back in 2012 and have been paying them back at $150 per month since ($4500 to go) and I recently settled with Home Depot($1900) for $100 per month.
There is a plethora of other unsecured debts that we just couldn’t afford to pay from various companies(HSBC-3-$2k,Chase-3-$7k, Gap/Old Navy-1-$2k, Exxon-2-$4k, etc…) that we haven’t heard from recently. Thanks.
Art
With all that you have going on, what are your thoughts about getting a fresh start with chapter 7 bankruptcy? Did you look into it and learn something that caused you to drop it from the short list of options you have to choose from?
I am not sure of all that you have filed in response to the FIA collection lawsuit. Was any of what you filed with the court prepared by an attorney? If not, have you consulted with an experienced debt defense attorney?
My wife and I have been fighting to keep everything together for so long that we said we would never do that. After the long hard fight, I think a chapter 7 is the most feasible option at this point. I didn’t consult an atty though I should have concerning any of the legal issues. I did talk to an atty today who walked me through the process of bankruptcy. I just hate feeling like we are giving up, but in reality a fresh start is what we need. At this point with our income and numerous outstanding balances it’s the only option that makes sense.
What you have shared of your situation is admittedly little, but the first thing I try to do with someone is the math. That will narrow your options down, and from there we can use other things like current and future financial goals, emotional commitments etc. The math here is overwhelmingly pointed and chapter 7 being the quickest, and least expensive path, to regaining your financial freedom.
I know that can sound counter intuitive. Read this article for a bit more perspective: https://consumerrecoverynetwork.com/credit-report-score-rating-debt-relief-programs/
I have a charge off with bofa from 2007 for 1390. i left the US after university, but have recently moved back, 3 months ago. it is still on my credit report. i have my finances in order, tried to apply for a new card with my bank, chase, they said no as i still have a charge off. what do you recommend i offer, 30%? Or wait until january 2015 for it to fall off? i live in Florida.
Thank you!
I doubt you would be able to settle with Bank of America or FIA at this point. The account was likely sold to a debt buyer, and maybe resold a few times by now too (depending on who bought it first). Does the BofA entry show a balance owed?
If it were me, I would wait out the time for Bank of America’s charge off to drop from the credit reports. I would not apply for any other credit until then too.
Are there any other collection items showing on your reports?
There are not other collection/charge off/etc on my report, this is the only one.
The balance owed still says 1390, boa is reporting it every month. But on my report, it says it will stay on until Jan. 2015.
One of the ways to quickly confirm a bank sold an unpaid debt is if BofA shows the charge off and collection, but a zero balance owed to them (they sold the right to the debt so they can no longer report balance owed legitimately). If your BofA collections still shows a balance owed, they likely still have it, though it could be an error.
If you want to settle for some personal reason, call and confirm with BofA they have the account still, and resolve it with them. If they sold it, find out to whom.
If your effort is purely credit report and credit scoring centric, I would still wait it out.
Hello,
I had b of a credit of 10k since 1997. In 2013, I ran into hardship and in order not to lose my home, I let my card go without making payments. Just today, I received lawsuits court documents that I need to go to court and settle or a judgement will be placed.
1. Should I file bankruptcy? Because one, I cant afford an attorney to help with the court; two, I cant afford a settlement because my credit is good but my income is just enough to pay the bills I just have now and I am still trying to work out the second mortgage modification; and three. I here bankruptcy costs but is cheaper than settlement.
What is the name of the plaintiff suing? If it is not BofA, or FIA named as plaintiff, you are likely dealing with a debt buyer. Which one can change my feedback.
What other debts do you have besides this collection, and the mortgages you are trying to modify?
I have an old BofA credit card account that was last paid in 4/2009 that has since been charged off by BofA. I am looking to buy a home and my credit scores qualify me to buy a home. However in order to qualify I can’t have any past due amount on my credit report with BofA and one other showing past due but both charged off. The balance showing on my credit report is $8000. Can I settle with BofA even though the account has been charged off? If so and given how long ago the last payment was made what will they likely settle the $8000 for since it has already been charged off?
It is fairly common for you to settle your old BofA credit card now that it is charged off. The amount to target in your negotiations may vary based on who they sold your debt to (banks sell their unpaid accounts and the legal rights to collect to bad debt investors), or the collector they have assigned your account out to. Generally I would target 35% of today’s balance as my negotiating target, raising or lowering the target by who is collecting, how long it has been since a payment was made (5 years in your case), and the state you live in?
Also, who is the other creditor you mentioned?
It has been 5 years since my last payment which in AZ the SOL is 6 but we are looking to buy a house sooner. I don’t know that the debt has been sold as it is not showing on my credit report anywhere else. The other debt is Wells Fargo on an installment loan with a balance of $2155. It was a trailer that they repossessed and sold at auction.
Thanks again for all your assistance.
Call BofA and let them know you are trying to put a plan together to resolve old debts. If you can afford to, you would like to work on this one, but need to know who to call if BofA no longer has the account. BofA will give you the information for any collector or buyer they have. If for some reason they still have the account, and it is not out for collection at the time, work with them to settle it.
Do the same thing with Wells Fargo account.
Post the names of any collectors you learn about and lets go from there.
Hi,
Thank you for your quick response. Okay so our current situation is not great. I was out of work for a long time, both in full time school, and 4 children. Husband doesn’t make much. Not enough to afford anything, yet not low enough to ever qualify for anything. Just above fed poverty guidelines. I am almost done with Masters, so will be bringing income in within next year and a half. . Just not yet. Sooo I’ve always had wonderful credit, until we just couldn’t keep up with the payments anymore. Late fees and interest were just stacking up, so we just seized paying them. Felt helpless. So we have Citi Bank for about 3500, Bank of America 5500-6000, best buy 1000, kohls 1200, New York and company 125. I have let all of them go since August-October. I haven’t been returning calls or anything. Just don’t have the money . Citi is offering 50% of total due, but still can’t pay it. Don’t know whether it’s a better idea to file bankruptcy or just wait for these to get low enough to pay. 🙁 So sad I ruined my credit though. Just don’t know what to do at this point or what’s the lowest amount of money I can get away with saving to pay off, or if my credit will be just as bad now as if I file bankruptcy since they are so late. 🙁 We are up to date on car loan and mortgage. Thank you so much for your help!!!
Nicole – Before I offer more detailed feedback about ways to consider managing the situation, are you anticipating needing to apply for any student loans for yourself, or as a cosigner for your children in the next couple years?
Michael-
Well I already have a slew of student loans, and will need just a few more to get me through college. My children are only all 6 and under, so I won’t be applying for student loans for them for a while.
Add up all unsecured debt balances. Calculate 40% of that. Now calculate how long it will take you to pool together that 40% amount. You will be settling debt all along the way, so if it will take 24 months it might look like:
90 days from now settle with Citi.
6 months after that settle with Bank of America.
5 months later you settle with Best Buy
Etc.
Now calculate what amount of time it will take your credit to recover (access to credit is a better way to put this, than how your credit score grows back to where it was). Compare that to how long it takes to have access to credit after bankruptcy. If it takes 24 months to settle all of those debts because you are going to save monthly and one off the deals, bankruptcy will look better from a purely access to credit perspective. Read this article for more details: https://consumerrecoverynetwork.com/credit-report-score-rating-debt-relief-programs/
Of course, there are more angles to deciding between negotiating and bankruptcy. You could be denied additional student loans with a bankruptcy, and for a couple years after the BK.
Hi,
We owe Bank of America 6,000. The account has charged off and hasn’t been paid in about 7 months of so. How much should I be willing to offer at the point? It seems like the collection agency acquired the account for so cheap, but won’t settle. What’s the most you should pay a collection agency?
Thank you,
Nicole
What to pay a debt collector as settlement will vary from one person, and one collection agency, to the next.
It is not safe to assume Bank of America sold your debt to a debt collector. Not all debts are sold. And how much contingency debt collectors make, or how much profit debt buyers can turn, is not going to be much use to you in determining how much to negotiate your debt for.
Some things that will matter are:
Account behavior leading up to default, like a large portion of the balance owed were charges in the months just before payments stopped, cash advances (if BofA still owns your account).
How collectable you appear (are you paying other debts on time according to your credit reports, home ownership, employment, etc).
The amount of money you can pool together to make a realistic lump sum offer, or that you can commit to over a brief period of months.
Who is the collector that has your BOA account now?
Can you raise 2500 to 3 thousand dollars (not that you would need all of that, but you may).
Are there other credit card bills that have gone unpaid besides this one? If so, how many and what do they total?
Hey Mike, sounds like they have not turned it over, I spoke to their FIA dept and spoke about the debt. I owe 16k, offered 8k and they said they couldn’t take it because the card was used to get cash, which I used for a start up company. Any thoughts on what I can do? Thanks
Thanks for the update Gary. I sent you an email asking to move the discussion over to the comments at the bottom of this page: https://consumerrecoverynetwork.com/credit-card-debt-to-include-in-settlement-plan/
I am currently enrolled in a program with Freedom Financial, I thought I really did my research and asked all the right questions before signing on; not quite. After realizing that the money I was sending each month was gradually going done and then I get hit with several fees I don’t recall ever hearing about.
Anyway, I had two accounts to settle and one I did on my own tonight and the other is Bank Of America, i owe about 16k. I am not sure how long its been but I am guessing close to 10 months since I started the program that I have not paid BOA. That said, I am wondering the best way to approach this since I had Freedom Financial trying to settle for me but they never started.
If anyone knows the # to call and discuss this or any input, I would greatly appreciate it.
Thanks,
Gary
Your account would likely be with an outside collection agency, or perhaps BofA sold your account to a debt buyer already.
Who was the last company you heard from regarding collection (via phone call or collection notice in the mail)?
You can call BofA directly (use the number on the back of your credit card, or on your old billing statements), and ask about the status of your account and who is collecting on the balance. Ask for the phone number to the collector. Post an update with what you find out and lets go from there.
Some creditors phone systems will reroute you to the current debt collection company once you punch in the 16 digit account number like normal. And there is the chance that you will connect with BofA recovery reps right when your account has been yanked back from one debt collector, on its way to somewhere else, enabling you to work something out direct with BofA.
Thanks Mike, I will call this morning and see. I have heard nothing from bank of america or anyone in regards to that account. I appreciate the help and will write back once I hear. thanks
Michael,
Thank you for being so helpful and providing such great information. Here is my situation. Prior to and for about 2 years after my husband and I got married, he obtained about 27k in debt with two credit cards, Bank of America (BoA) and Discover. BoA is at about 16k and Discover is at about 11k. My husband only has an income of about 33K. I know it is not much but we recently found out that he will be getting about 5k from an inheritance. We thought about putting all of this towards one of the credit cards as a settlement and focusing our payments on the other one. He continues to make the minimum monthly payments but we have depleted most of our savings to do so. Here are my concerns/questions:
1. Since these cards are just in his name and issued prior to marriage, can they come after me? Will a settlement affect me? I do not have any credit card debt and my income is twice as high as my husbands. I work 3 jobs to maintain my credit cards at zero.
2. If we have joint bank accounts and joint credit cards are these affected by settling?
3. Is it better to hire a lawyer to settle these or do it on our own?
4. Should we stop making payments?
5. Should we put the small inheritance into a savings account and use it later we are offered to settle?
What should I worry about? My credit score is excellent and if he defaults on his cards, we would like to keep my credit in tact to avoid any future hurdles for loans, mortgages etc.
1. What state are you in? Depending on the answer, they can come after both, but that does not mean they make it stick due to his bringing those debts into the marriage. A settlement with BofA (which is the one I would target) will not hurt your credit if the account is in no way associated with you (signer or authorized user).
2. Those joint bank accounts are not impacted. Joint credit cards could be if one of those other creditors runsa periodic review of your credit and sees the late pays reported by bank of America, or the settlement too. A creditor may elect to lower your available credit limit, or even close the account because their risk modeling tells them to (AMEX is good like that, and others).
3. You do not need a lawyer to settle debts. But they can come in handy in different collections scenarios. I highly recommend negotiating and settling on your own, but not everyone is built for that.
4. You are not going to be able to settle a credit card debt with BofA or Discover while you are current. Read through the first section of the debt settlement sections of our online guide starting here: https://consumerrecoverynetwork.com/credit-card-debt-settlement-program/ – This will help you better understand the process, and the timing, regardless of whether you hire a pro, or do this on your own.
5. I encourage all money that is earmarked for use in settling debts be placed in a separate account as outlined in this report: https://consumerrecoverynetwork.com/paying-your-credit-card-debt-settlements/
As far as your exposure, are you an authorized user on either account?
Hi! I had a student credit card for bofa that I got in 2010, with a 300$ limit. I stipend making payments almost a year ago. I’ve recently tried to get a loan on a house but I keep getting denied on the report. It says I’m past due 290$ and my total balance is 494$. But it also states “unpaid balance reported as a loss by credit grantor, account closed at credit grantors request.” I’m not sure why that means as I have yet to be contacted by a collections agency. Should I contact the bank and try to settle? How much would be an appropriate offer? Has my debit even been sold to a collections agency? I’m totally lost here.
Call BofA and ask about the status of the account. You first want to find out who has it. If BofA has is placed with an outside debt collector they can provide contact info. If they sold the debt off to a debt buyer, they can give you that info. You can sometimes catch a charged off account in between, where they have it, and you can negotiate a pay off directly with Bank of America.
If you do catch the account with BofA, a good target to settle the debt would be between 30% and 40%.
If the account is out for with a debt collector, or has been sold, post with who, and I can offer more feedback.
Hello Michael,
I owe about 7k to an unsecured Bank of America credit card(about 60 days past due). My question is.. do they have the right to pull money from my Bank of America checking account to cover?
I’ve hit a financial hardship as of late and will be filing bankruptcy in a few months. I am wondering if I need to pull what little money I have left from my Bank of America checking accounts or is it safe.
Thank you,
Will
Unless you had some form of cross collateralize product or agreement with Bank of America, you checking account with them is likely safe. But talk that over with the bankruptcy attorney so you can rest easier.
Hi Michael –
Thank you so much for your valuable advise that you’ve been providing. I owe BOA 10,900 on a sole proprietor business credit card. Long story short — unexpected surgery left me with medical bills totalling $13k. Two months after that I had a sudden loss of business income. My last payment was in October 2013.
FIA card services contacted me to on Feb 27 to discuss “options”. When I called them back they were very cordial, but vague — i.e. they might lower interest rate, offer credit counseling, etc — but wanted me to provide income and expense details. I stalled and told them I would call them back.
On March 5 BOA/FIA mailed a settlement offer for 4,895 stating to contact them to setup payment arrangements. I contacted them today and was treated like we were back at square one — I was asked to explain why I was behind and provide detailed income and expenses. Upon receiving that information they would then consider which options would be available to me. I was told that I also needed to make a payment of 220 by April 1 to stabilize the account.
I explained that I had received a settlement offer for a specific amount and was calling to discuss the payment arrangements as instructed. The rep didn’t budge; it was almost as if she thought I was bluffing. Is this normal or was it just an inexperienced phone rep? Should I just call back and try for a different rep?
Also — 4895 is a 45% settlement. I obviously want to get that as low as possible. What do you think the lowest reasonable amount would be with 3 or 4 payments?
Charlie – 35 to 45% is where many accounts are landing with FIA card services. And it is fairly common to have them ask for basic budget details. Your answers must be consistent with a hardship and inability to pay in order to get a settlement completed. Please post how your follow up and counter offer goes.
Setting up payment arrangements on a settlement of this amount is still possible today, but can lead to higher percentages, or the perception that you can pay more over a longer period of months.
I spoke to another rep this morning who was easier to talk with. She did reiterate that a basic financial assessment was needed in order to offer the settlement. She advised me to consider the settlement only as a last resort due to the impact to my credit report.
I was told that if I paid at least $220 by April 1 the account would stabilize and not go to collection. I can do that but not much more by the 1st. I do have some income due to be received in mid-April which would give me the ability to pay about 50% of the past due amount. I should have a clearer idea on future income within a few weeks — I have opportunities in the works — but until the checks arrive.
Believe me, nothing would make me happier than being to resume normal payments. My concern at this point is to minimize the credit damage. Is the settlement more damaging than the late account? Should I buy some time with partial payments or would that make the situation worse?
Hi, I owe BOA 5500. They are willing to settle for 2100. However they said they cannot take payments on that? Can they take payments on that, that you know of? Also, if the account charges off, like they are saying…will the collection agency be willing to settle it as well? At what point do they usually refer the accounts to a lawyer? Does it have to be a certain amount or do they do it over any amount. Thanks a lot for your help.
Stephanie – BOA will settle with payments. Based on trends at this time – up to 3 payments spread out no longer than 94 days if settling with them before charge off. After charge off the payment terms can vary widely. Be careful to get everything you arrange spelled out in writing before remitting payments – that goes for settling directly with BOA too.
Hi! I just received a civil warrant to appear in court. It is from FIA Card Services, N.A. It is to answer the claim for a money judgement of $10,000. What should I do? I had a nasty divorce that cleaned me out and also have child support payments. Should I try to settle and how? I will take any advice! Thank you so much!!
Jason – Settling can make sense here, either before the lawsuit progresses, or after filing a response. Can you come up with, say 60% of what they are suing for? What do you look like on paper to a debt collector? Do you have other items on your credit report that show you are paying them on time (house, car, other credit)?
How old is the debt with BofA that FIA Card Services is trying to collect (When did you last pay it)?
I have not paid since Oct of 2011. I also have an out of state house that is empty and has not been paid for 18 months. I have been working with the bank for a loan mod or short sale. They have been dragging their feet. I also have another card of around $15k that has not been paid in about 2 years. I make $50k year and pay child support. I do make timely payments to a credit card with a $12k balance. Thanks!!
jason – The credit card you are paying on time may be viewed as a reason not to approve the most advantageous settlement. But you can settle this if you have the money available. Check out this page, and the many comments, for more details about settling when sued. How does raising the money I estimated look? If you cannot get that much pooled together quickly, how much can you put together now, and how long would it take to put together the rest?
Micheal,
I have several accounts in collections due to me leaving my job in 2010 to return to school. I was out of work for almost three years and I was unable to obtain a degree or another job. I no longer have a car loan and I’m currently trying to contact the other collection agencies. I have several outstanding accounts stemming from a car accident and an attorney leaving me high and dry to the unpaid debt from 2010. The other balances are very small and can be addressed by borrowing the money or a payment plan. Aside from that I own nothing and I have no income and I have since decided once again to return to school. I would have a hard time coming up with another $1,000 but I will never know unless I try…
I guess I’m not sure is If I call and say that I was notified and acknowledge that the debt belongs to me and make an offer or do I want for them to make me an offer? Do I negotiate back and forth?
Bren – You do need to make a decision about how you are going to approach this. When you make reference to acknowledging the debt, it suggests to me that you understand you could defend against the suit, either with a goal at dismissal (not great odds with the originator – which FIA can be considered as), or as a means to separate yourself from the herd and avoid default judgment with an eye on a better settlement result.
Am I reading too much into your concern for acknowledging the debt?
How much debt do you have total out there?
Are you going to apply for any student aid in the next couple years?
I have just found out that I’m being sued by FIA card services for a substantial amount of $8,000. They have been trying to reach me for months but I just recently found this out, I have yet to be served but I know its coming. I cannot afford to pay the entire amount as I am unemployed and a full time student. I would like to negotiate a settlement but I’m getting conflicting advise. I have been told to contact the law the firm, FIA card services directly, or hire an attorney (which I cannot afford) etc, I want to move quickly as the clock is ticking but I don’t know what my next step should be…
Bren – If FIA Card Services has contracted with an outside collection attorney, they have an agreement with the attorney. Calling FIA to negotiate your settlement will likely result in their connecting you with the attorney, or offering their contact information for you to call directly. At this stage you will normally have to negotiate any deal with the attorney office collecting.
What are you prepared to offer as a settlement?
Michael,
I can come up with at least half, but I’m not sure if that is enough at this point. Would getting an attorney improve my chances? I’m afraid of being forced into something that isn’t feasible for me or being backed into a corner… Should I contact them via telephone or in writing?
Bren – I have settled with outside collectors for FIA Card Services when there is a suit filed, and active litigation, for 50%. I would suggest being prepared to pay more. How collectable you look to them on paper may be what determines how much you settle at. Are you paying other credit card and unsecured bills? Paying a mortgage or car loan on time? Are there other collection accounts showing on your credit reports? If so, how many?
I recommend contacting creditors and collectors to negotiate a settlement or payments over the phone. Once you have an agreement verbalized, get that in writing before progressing with payment(s).
Know what you can do before picking up the phone. If you can come up with 60%, that is your target. If you cannot hit the target, you cannot afford anything else, so end the conversation. They are not the ones backing you into a corner. Your cash flow is. And you can only do what you can do.
If you are uncomfortable talking to people on the phone, than perhaps hiring someone (attorney or otherwise) would be a good idea. I would suggest making a call yourself first to test your comfort. You may surprise yourself, and save money on professional fees while you are at it.
We are talking about being sued here, so yes, it is always a good idea to talk with an attorney of your own. But do not call any attorney. Find one that has a practice in your state that focuses on debt collection defense (very few attorneys do).
Hi Mike –
I’ve been reading your articles and following your advice on settling a credit card with BoA. We are now at the 90 days past-due point. They have offered to settle the 16k balance for $9,500. This is not a realistic number for us, when asked by BoA what was realistic, I told them $4,500 – they said “no way they could settle for such a small amount”. The amount I offered was a very real amount for us, not part of a game of give and take….what should I expect next?
Also – It just dawned on me over the weekend that my name is on my unmarried adult son’s BoA checking and savings account. Is there anyway they could/would “take” any of his money to settle my debt? Should I take my name off of his account?
Thank you – Beckie
Beckie – I typically see the better settlements with BofA get done in month 5 of nonpayment, so between 150 and 180 days late. It is not unheard of to negotiate the deal you can afford this early, but not all that common right now. I would want you to be prepared with a bit more money than what you are currently based on BofA settlement trends. Can you ad more to your settlement fund in the next couple months?
If it were me, I would take your name off the account unless there are good reasons for it to remain. But they would need a judgment to start reaching into accounts.
Again…thank you for your quick reply. With all the stress that comes along with financial hardship, it is a comfort knowing you can (and will) answer these otherwise embarrassing tough questions.
I will remove my name from my son’s account and keep you posted as things progress with BoA.
Beckie
Hi Mike… super impressed with you responses. My husband and I had some major financial hardships in 2008 (as did many) and we have several unpaid debts. We decided to not file Bankruptcy even though we were advised to do so and we have been settling debts here and there in lump sums. Bank of America filed judgment against us back in 2011 for $11,000. We asked for a settlement and agreed at $4,999 but we were still suffering financially and could not meet that obligation. Over the few years I have forgotten about the judgment and have not had any contact with them. I finally just got my business back up and going and put $20,000 in savings… found out this morning that Bank of America (FIA) garnished our account $11,000 (the full amount of the judgment). Is there any way I can call and settle for the original $4,999 with them or am I stuck since they have my account garnished? Do I need an attorney to help me with this? I would really appreciate your opinion and am so grateful there are people out there like you posting current information! I will wait to call them until I hear from you.
Jill – Unfortunately, there is not much you will be able to do about the bank levy, at least, not based on the limited information you shared. Bank of America, or the attorney that handled the suit and bank levy, will have no incentive to settle for anything less than the full payment.
There are different angles to take on exploring your options, and you indeed should speak with an attorney to see if your situation fits into some of those. I would encourage you to consult with an attorney that has collection defense experience. Not many do, so if you need help locating one, post the name of a nearby city in a comment reply. I will email you contact points for any that I find near you.
After reading several posts on your site I finally found the courage to make the initial contact with BoA regarding the possibility of a settlement on our credit card balance, 17K. The Finance Specialist asked the usual questions, income etc. I told her our income had been reduced drastically when my husband lost his job nearly 5 years ago (due to a disability). I continue to work, although my income is a fraction of what his was. What little bit of savings we had is nearly depleted. We have never been late on a payment, which may be the reason BoA said they are not willing to settle this debt. or make any kind of concession. She went on to say that our next payment is due Oct. 1st, if something changes, call her back. I was surprised to say the least. What now? Was she suggesting we not make the payment? Does that make our account more attractive to settlement? What do we do now? Help!
Becky – It is not advisable to call Bank of America and offer settlement when you are still current with payments. They will not be open to it at all. Settling credit card debt with Bank of America (or any credit card bank for that matter), will nearly always be predicated on the fact that you have not made on time payments – for several months.
If you are unable to make payments, and negotiating with BofA is your goal, I would recommend you start reading the guide to debt settlement section of the site. Read through to the end of the guide that speaks to settling with your original creditor.
If you have questions as you are reading through each section, post them in the comment section of each page for feedback.
Thank you for your quick reply Michael. I will take your advise and read the “guide to debt settlement”. I’m sure I’ll be contacting you again in the near future.
Thanks again!
Greetings Michael
Well done here! My question is HOW DO BANKS TREAT A SETTLEMENT IF SOME OF OTHER CREDIT CARDS WITH SMALL BALANCE ARE BEING PAID OFF? Specifically, I have about $60k with BofA which I must settle for less than 50% but I do have 3 other cards with less than $900 on each which are still current. Will this hamper my attempt to settle with the big account or is there a special strategy I should use, like stop paying all the cards? Thanks for your input. JR
John – I have had limited issues explaining away smaller balance accounts being paid on time when negotiating and settling larger balance accounts with Bank of America’s internal recovery department. I have been able to help people overcome that same obstacle on their own through coaching as well. But 3 credit cards being kept current is not going to support your hardship situation as well.
How late on payments with BofA are you already?
I had a credit card from chase bank I defaulted when the amount was $12,500 last payment made in 2010. I received a court document to appear in court and that I was being sued by Bennett law firm out of Salt Lake City for there client Equable Ascent Financial who had bought the debt, now $17,500 from Chase the court date was in mid june. I contacted Bennet Law and made arrangements to pay the account in full on june 24th for $8000, that was the agreed upon amount for which I received paper work stating exactly that. I contacted Bennett Law on June 21st stating I had $6500 that I could pay on the 6/24 but I could not pay the rest until July 31st. The representative Lindsay said to go ahead and send the payment and she would note the account would be paid in full on July 31st for the remaining $1500. She assured me that she was in charge of my account and was the only person who would be reviewing the account unless one of the lawyer chose to look at it and that this would be ok. She would not send me new paper work stating that I would be payed in full on July 31st. about a week ago I received a letter from Bennett law stating my account had been sold by Equable Ascent to a new company Calvary Investments and they now owned the $11000 debt($17,500- $6500 my payment), but had retained Bennett Law as their attorney. This seems incredibly unscrupulus and possibly illegal but I only have the paper stating my debt would be paid in full from the $8000 payment on june 24th. Since a new company bought the debt am I now responsible for the $11,000 debt and the agreement is null and void with Equable. Should I pay the $1500 this seems stupid since my agreement with Bennett law was with Equable and I have no paper work with Calvarys name on it. Do I wait for a new court date and fight Bennett Law since from what i have read latel most of these companies cannot produce all the necessary paper work in court to prove this is my debt and that they own it or did I give them ownership when I paid Equable. Any help on these questions would be greatly appreciated.
Marshall – A whole lot has happened here. No use pointing out what do have done differently. I would suggest trying to circumvent this whole thing.
Equable Ascent, Calvary, and maybe even Bennett Law, will all have someone assigned to monitor complaints about debt collection that the CFPB just started taking: Go here. Be sure to outline what happened, and who you spoke with, and at what time and on what days in your complaint. Be as detailed as possible. I suspect you will get the most rapid response and potential result this way.
Post an update to this comment string with what develops.
I am currently paying a loan from BofA to FIA card services and I know that I have been paying past the “due date” but still making monthly payments. I pay just above the minimum amount due. But I feel as if I am paying and not seeing any change in the balance due. I have made consecutive payments monthly for 4 + years of $500.00..the loan amount was for $21,000 and I want to know if I should still be paying on this loan. Our interest rate was at 24% the last time I checked but my husband called to get it lowered a couple years ago and they said they did. Now I have been trying to request all of my previous statements to confirm this but they have been giving me the run around and they have not been sent still. (I requested them one month ago all the way back to 2007).
Just wanting to know what to do next I guess.
Trish – First I want to try and reverse engineer what they did. How much is the balance they say is still owed on the account? Can you pin down the exact number of months you have paid? And for how long have you been seeking an accurate accounting and statements from FIA?
Post a follow up reply with the answers and lets go from there. I will have a couple of suggestions for you.
They say the balance is still$13, 990 and I know I have paid at least 48 months consecutively but I know there are more just not sure with out those statements..I have been trying for one month to get the statements
Thanks. I cannot get the FIA math to work with anything consistent. At a starting balance of 21k, and paying 500 a month with a constant 24% interest rate, and for 48 months, you would not have the balance owed right now. If interest rate on the Bank of America account were lowered at anytime, and for whatever period of time, you would have a different balance, but I cannot work that in without knowing more. I edited this part of my comment after recalculating something. I hope the original comment did not confuse.
One of the issues may be the fact that you are paying late from time to time. This could mean late fees are added, or even that the interest rate could be more than 24%. If FIA lowered the interest rate, but a payment was later missed, it could be that the interest rate concession was lost. Finding out what happened, or if the changes made, and the timing of missed payments, all combined to leave you with a legitimate balance owed today, can only come from an accurate accounting.
If you have not gotten a response from FIA Card Services after this long, I would encourage you to file a complaint with the CFPB with as much detail as you can provide here. That page will have the option to file a “credit card” complaint, or “debt collection”. FIA Card Services is a collection and servicing connection to Bank of America. You could go either way with the complaint. I would file under debt collection. The CFPB cares about issues like yours a great deal. FIA Card services probably has someone assigned to monitor complaints in the CFPB portal, and the CFPB will follow up on the complaint.
Once you get any response it would be great if you could update this comment string so others can learn from your experience.
So, I have a BoA Card that is now 180 days past due. I’ve been making payments, but one was late [April] that pushed it to 150, or 180 days past. I made the May payment on time, but I ran a credit report and it now states Charge Off. I’ve also stopped receiving calls from BoA [FIA Card Services].
So my question are:
1. Now what? What will happen next? I recall one call with them, that if it went to a Charge Off status, it would internal and they’d try to work with me. Not sure if that’s still the case or not?
2. It’s for a good size amount [$25k] so I expect I’ll be sued…? Should I contact an attorney now? Wait until I receive something from them?
3. I’m a mental wreck at the moment, and not sure if I should call and initiate the first steps or wait?
Many Thanks!!!!
Bank of America has an internal recovery department that is sometimes where an account can land after it is charged off. If your account moved to this department for collection, you still have the option of working directly with the bank. This department may make collection attempts for a couple of months before the account gets assigned out to a contingency collection agency, or the account may get sold to a debt buyer. The third option is to place the account with an attorney for collection. Read this quick outline about what banks do with unpaid credit card debt and unsecured loans.
When Bank of America sends your account to an attorney it is often with the approval to sue to collect if necessary. I do see less direct BofA lawsuits in the last couple of years. I should point out that a debt buyer may also use an attorney to collect, who also may sue.
You do not need an attorney unless sued. You will know that there is an increased likelihood of that happening if you receive a collection notice from an attorney licensed in your state.
Can you pull together a lump sum amount to settle the debt? Something on the order of say 8k?
What did you mean when you asked about your calling to initiate any first steps vs waiting?
Thanks for the quick reply!
I don’t have $8k. I wish I did, I’d offer that to close this matter. I may have that by September, but I don’t know if they’d wait that long…?
My comment about calling was “Should I call BoA now and start talking to them, or wait until they call me?”. I’ve read so many articles where they say “Don’t call, or contact them ( BoA).
Thanks again. My stomach was in knots of what is next…
A good amount of internet coverage about settling debt is either wrong, incomplete, outdated, or posted from the perspective of someone who cannot, will not, or chooses not to resolve a debt. Unfortunately, some of what you read on line can lead to missed opportunities and more expense and stress later on. Given what you shared so far, you are motivated to settle with Bank of America directly, or with a collection agency BofA sends the debt to. Here are some tips and suggestions using today’s trends:
Realistic debt settlement targets with Bank of America range between 25 and 40 percent right now. This assumes you are negotiating an established account (opened a couple of years ago or more), and that there was not a large spike in cash advance, convenience checks, or charged purchases in the months prior to your inability to pay on time.
Bank of America can and does offer the ability to make payments along with the balance reduction you negotiate with them. If the account is negotiated and the settlement amount agreed to prior to charge off, those payment terms cannot extend beyond 94 days. For example:
After your account is considered 5 months delinquent, Bank of America agrees to settle your 25k balance for a total of 7500 with payments to be spread out over 3 months.
You have 2500 available now, or can get it, and are confident you can raise the 2500 dollar payment the next month, and the following month after that.
You take the deal.
All of the above is negotiated and accomplished with BofA over the phone, and supplemented by a written agreement outlining the settlement amount, payment date and terms.
You can accomplish the same goal by negotiating with a collection agency Bank of America may place the account with, or with the internal post charge off recovery team at BofA (which is where your account may be now). When accounts charge off and are placed with outside debt collectors, the settlement amounts and payment term flexibilities available will be targeted differently, but are often inline with what I outlined above. There are instances where there are more than 3 months to pay a good settlement once the account is charged off. I don’t recommend stretching settlements out too far if it can be avoided because things can get tight one month and a payment missed, which kills the settlement agreement and the benefits that came with it.
If the account goes to an attorney debt collector there will likely be higher costs to settle and resolve the debt. Settling at this stage is often better approached with a lump sum, but is situational. You want to avoid this scenario whenever possible, but I understand that it cannot always be.
Try not to get hung up on whether Bank of America, or a later debt collector, will wait for you to have the money to settle. They are going to do what they do with your account regardless. If it takes until September for you to raise the cash to settle, or until next week or month to be confident you can commit to an agreement paid over a couple months, it is what it is.
What I outlined above is initiated over the phone, either by you making the call, returning a call, or picking up one of the many collection calls placed to you.
Content online telling people to not call or contact BofA directly either do not know what I just outlined, or may have some other perspective for their own debts that is not the same as the person researching their options and reading what they wrote. Some stuff can also have an agenda that clearly is more about anger at banks and debt collectors in general. That message may resonate with some readers, but much of it is not conducive with resolving debts and moving on with your financial future.
A good amount of my feedback in this comment is more for future readers. Your account is charged off, but may still be with internal recovery. If not, and if BofA has assigned it out to a contingency collector, you have options to settle. You have options all along the way too, but the better ones are often in the earliest stages of collection.
Michael,
Thanks so much! This is the most sound advice I’ve received so far. I’ll reach out to BoA this week, and see what’s up. Like you said, “It is what it is”. If I can do something, and settle I will. If I can’t afford it, I can’t afford it. At least it shows I’m trying…
Michael,
I am kina of in the same boat as the posting that you gave this response to. FIA card Services BofA has sent my charged off card to a debt attorney who sent me a summons. The account is $28460. I have not responded to the summons yet and have been trying to get all kinds of advice. At this point one attorney who says she doesnt litigate because it is a waste told me I am going to have a judgement put against me no matter what, if I answer or dont. She said to make myself judgement proof as possible. I dont have a car, a home, but do have joint account with my new wife. I live in NC so supposedly cant have wage garnishment, however i think that they can do something to ou bank account. I want to try and settle, should I call FIA or call the debt attorney that sent the summons on their behalf? I told another attorney this and that I have money built up in my 401k, roughly $10k…and they told me not to dip into that. I just dont want a lein, or garnishment, or bank accounts taken, who should I call first? What offer should I start at? Thanks
Settling a debt like this and avoiding judgment is sometimes going to provide a good mathematical reason to do something you would not otherwise, which is hit a retirement account (but better if you only borrowed from the account and paid yourself back, than straight pulling the funds, as that money is more expensive when taxed).
How old are you? How long have you been at that job, and is it secure? Do you plan on buying a home with your new wife in the next decade?
Judgments are normally more expensive to settle. Let’s say FIA Card Services would take 50-ish percent today, but only accept 65% of the judgment balance 5 years from now. Judgment debt grows with the legal interest rate set by the court. The cap in North Carolina is 8%. There will be legal costs added to an FIA judgment too.
Now compare some of those variables to the “cost of money” you run into when trying to round up what you need to settle the BofA account now.
You can also file bankruptcy for less than 2k start to finish, and preserve your 401k, and be in fairly decent shape with access to new credit products within 2 years. See this post for more on that: https://consumerrecoverynetwork.com/credit-report-score-rating-debt-relief-programs/.
Answering the complaint now will give you time to consider your options. I would recommend working with an attorney to do that. I can refer you to the one I would want to work with if I lived in NC if you like?
Hey Micheal,
My 401k has a loan amount of the $10k, I was just thinking if I could settle it under that I would take the loan and get it over with. My age is 33, I have been at my job for a few years and I am stable in that arena. Yes we would like to buy a house within the decade. So I feel that the cost of money would be ok, I dont qualify for chapter 7, wish I could like everyone else has…instead I have tried to keep afloat and it is what got me in the situation.
I would like to do whatever it takes, if you could recommend someone that would be great. I would like to contact FIA, should I do that before filling an answer of getting a judgement and see what they can do? In NC if they do get the judgement how long would it take for them to start taking from my bank accounts..I know they cant garnish my wages..
401k loans can often have an additional risk if you stop working with your current employer, as in, your loan can become due if you leave. That is why I asked about stability.
If you cannot qualify for chapter 7, it leaves chapter 13 open. I like settlement as a better alternative to chapter 13 in many instances.
I would not contact anyone at FIA, BofA, or the attorney suing, until you have talked things over with Chris (I sent you an email with his contact details).
I would personally adjust my banking habits within 24 hours of a judgment being entered in the court.
Michael,
What do you mean changing banking habits in 24 hours? Chris is located pretty far away from me. Do you know anyone close to the western part of the state.
Distance does not have to be an issue in these cases. I know attorneys that cover their whole state with these types of cases. If distance is an issue, ask Chris for a referral to someone in western NC.
I would take my name off of any joint accounts I had with my wife; keep very little in any individual checking and savings accounts (perhaps even close them); get any auto drafts I needed to situated with wife’s account, or even on a prepaid card (not great if too many fees); I would cancel any direct deposits from employer if need be.
I have FIA card services judgement for $4472 that comes off in 2017 but I would like to take care it now. Should I work with BOA or the collection attorney? What’s the least I could likey settle for?
They would likely refer you to the collection attorney they placed your account with. You can try calling BofA first though.
Judgment debt does tend to settle for less of a savings than accounts that never reached the courts. How much they will settle for will often depend on how collectable you look.
Do you have any other unpaid bills on your credit reports besides this one? If so, how many? What about current and paid positive accounts on your credit?
Who was the collection firm that sued you?
Michael,
Thanks for all the great information. I’m a HUGE fan of you work and really appreciate you very much.
I have a follow-up question concerning this paragraph: “Realistic debt settlement targets with Bank of America range between 25 and 40 percent right now. This assumes you are negotiating an established account (opened a couple of years ago or more), and that there was not a large spike in cash advance, convenience checks, or charged purchases in the months prior to your inability to pay on time.”
I have 8 cards that I hope to settle. I know, long road ahead…
One BofA card has a 25K cash advance April 2013 and has been open 8 years.
Another BofA card has less owed (7K) but it was opened back in April of 2013 and I used it this past month.
How long do I need to pay the minimums on these to get favorable results in the settlement process. Any minimums I pay are eating into the settlement money I have saved up for all my 8 cards I’ll be negotiating, but I also know that stopping payment too soon could make me unable to get a settlement at all, and I don’t want to end up in bankruptcy.
If I do need to wait on these, can I go ahead and stop paying other cards and keep paying on these so the settlement process is staggered or will that be a red flag in the negotiation process?
Thank you!
Mary – Great question about maintaining payments for a while to achieve a strategic purpose, tied in with having several other credit cards that may be better seasoned. I can offer some general things to consider.
Based on the last several years, I would say making 12 payments on a large cash advance like this with BofA would be best to get you past any triggers. That has been my experience. I want to point out that this should not be taken as an applicable time frame that can apply to other creditors. Capital One and Discover will look at this type of thing a bit differently, as do others. I should also point out that there are exceptions to having recent transaction history hold you back from negotiating and succeeding with getting best offers. I worked a file a few years back with a guy who got taken by a scam. He took a cash advance with Bank of America and sent the money out of country, losing every penny. He was unable to make payments in short order. That account settled for the lowest possible based on trends with BofA at that time. If there are hardship circumstances surrounding an event, you can sometimes still do just as well negotiating.
Staggering any delinquencies is a very good strategic step depending on the situation. Even to the extent that you make a small payment nearer to charge off – in order to delay the charge off. All smart moves are on the table during your implementation. In most file work I have done, the staggering has not exceeded 4 months. There have been a few exceptions, but again, depends on the hardship and access to funds over a period of time. Which of your creditors are most likely to red flag your settlements, or the amounts they are willing to reduce the balance to in order to settle (when seeing payments to Bank of America), can vary. Having an account show one month delinquent just recently, while negotiating a settlement with a creditor who has not been paid in 5 months, can be talked around.
Getting into detailed feedback and strategic planning would require one on one time I do not offer currently, but other CRN specialists do. You could call in to speak with one at 800-939-8357 ext 3.
So I opened a student credit card with B of A in late 2005 the card limit was $700.00 I believe. I made payments up until early 2006 when I couldnt keep up due to lack of work because of college. I recently (Feb 2013) got my credit report and see a debt from FIA CARD SERVICES N.A. it says the card was opened in 2008 the card limit is $2054 recent ballance as of Jan. 2013 is $2646 and I apparently (which i did not) made a recent payemnt of $30. Should I validate debt or just dispute it or is it mine? I dont feel like its mine but unfortunatly since I had the card so long ago I know long have the card or any statments to provide proof of anything. I dont feel this is my debt. my B of A debt shouldnt show up on my report since its past the seven years, right? Im worried if i call to ask the company that if this is my debt it will reopen the account and make it appear newer then it is. advice please! Trying to get a mortgage loan and this debt is haunting me. Also oddly enough this debt appears on the paper copies of my credit report from Expedian but not on my credit report on there website…why would that be?
Tiffany – If you are certain you last made a payment to the Bank of America credit card in 2006, it should age off of your credit report sometime this year (7.5 years from date you last made a payment). How FIA card services is coming up with a recent phantom payment is odd when you know you made no such payment. It may be a glitch, or it may be something more deliberate. Collection accounts do have a tendency to have activity updates that seemingly would allow for them to impair your credit longer. You can correct these by disputing FIA and BofA entries. Before we get into that though, what state do you live in? I want to be sure that the SOL to sue you for collection has expired.
The following Bank of America settlement and credit reporting comment was originally submitted as a reader question. I am being more attentive to consolidating the site content, so am posting the question as a comment to a BofA related page, then posting my reply.
“Owe $46K to BofA business credit line that was opened in 1995 or 1996 to corp. I ran. I am a personal guarantor. No new charges have been added to the line in years, and the interest only payments are current. BofA is now calling the loan, offering a payment plan of about $1k/month for 60 months – which I cannot afford. I asked if they would accept lump sum – they said they would consider it. This line does not currently show on my personal credit report as the line was made with my corp.
Would any charge-offs due to settlement for less than full payment show on my personal credit report? What percentage of balance do think they would accept as lump sum? Thank you.”
Bank of America will settle business lines of credit much the same way they settle credit cards. The main concern, beside the fact the debt is unaffordable, is whether the business is a going concern. If you are keeping the business doors open, do you rely on a Dun a Bradstreet report for anything? Do you have other vendors and suppliers, or a factoring company that you rely on?
It is fairly normal for a business line of credit with Bank of America to not appear on your personal credit report, even when you personally guaranteed the loan. Your concern about the BofA line showing up when payments are missed in order to settle is a valid one. I do see personal credit reports suddenly show a business line of credit once enough payments are missed, or the account charged off after 180 days of nonpayment. Capital One is really good like that, but Bank of America is too.
If you settle the LOC with Bank of America early enough, and before the charge off, you could possibly avoid the account showing on your personal credit report. LOC’s settle a little differently than credit cards, and the charge off can occur earlier than a revolving account.
Your targets for settling with Bank of America are going to vary based on multiple things. What BofA can see about other credit extended to the business, or you personally, are still being paid on time does often factor in to the floor for accepting a settlement amount. Your settlement can range from 25 to 50%. I would have to dig a lot deeper into your situation in order to confidently narrow down a target settlement amount. That kind of thing is better done one on one.
If you want to call in for a consult you are welcome to.
I am dealing directly with bank of America on my credit card that I have not been paid for 4 months. I owe around 8000 and might be able to come up with 1000. Can bank of America go for that and consider the rest settled?
I have another account with a low balance I am trying to keep paying but it’s tough.
Unfortunately it will be unlikely that the credit card debt with bank of America can be settle for that little before charge off. You may be able to settle the debt with three installment payments of 800 or so. Can you think of ways to raise the additional money? If you cannot settle with BofA before they charge off the credit card debt and pass it on to a collection agency or sell it to a debt buyer (which is generally after 180 days of non payment), you can keep saving up money and settle it later.
Hello Michael,
My Husband and I have a credit card debt with Bank of America that went past due and was charged off on our credit report. We also had our mortgage account with BoA and they sold it to another lender. Two months after they did that my Husband received a summons to appear in Civil court for a Civil lawsuite for unpaid debt. It looks like it came from an attorney working for BoA. We stopped paying on the credit card a year ago when I lost my job. We could barely keep the lights on. My biggest mistake was not communicating with them. I also stopped paying my student loans which this lawsuit prompted me to contact for repayment options. However this Bank of America Lawsuit, I was going to contact the attorney on the summons to see if we could settle out of court. What are your thoughts on this and how I should handle it? Also they are only suing my husband and not me (i’m the co-signer). Any direction is appreciate – Mary
Who is the law firm suing? Is it Bank of America listed as plaintiff, FIA Card Services, or another company name?
It will often help negotiation efforts if you show late payments to other creditors. Are there other unpaid debts out there besides the student loans in default?
How much is the balance owed on the BofA account?
The Lawfirm suing is “Mitchell Rubenstein & Associates, P.C. and the plantiff is listed as Bank of America, N.A. The balance is $18,866.11.
It’s a Warrant in Debt (Civil Claim for Money).
The claim reads that $18,866.11 net of credits, with interest at 0% from date of DOJ until paid. and an Affidavit and last statement before charge off are attached to the Warrant in Debt.
Yes, there are other upaid debts but mostly medical bills which are in my name and not my husbands. We only had that one credit card and no others. We paid all our utilites late but before cut-off for the year I didn’t work. The only Defendant listed is my husband altough.
Should I contact the lawfirm and try to come to a settlement with them? I’ve been saving some money since I started working again just recently and I was hoping to settle this prior to receiving this Warrant in Debt.
Your advice is appreciated.
Settling lawsuits for less happens every day. You can do negotiate this yourself using the tips and feedback I cover about settling with collection attorneys. Read through that article and into the comments and you will be better prepared to settle your BofA account.
You can also get help on this if you want. You can call me and talk about your situation at 800-939-8357, choose option 2.
Hi Michael. I had a credit card for 500$ about 4-5 years ago. Never payed. What are my options now? Thank you
Settling debts for less than the balance owed when they have gone unpaid this long is my first suggestion. Is the account still with Bank of America, or a debt collector working for BofA? If not, do you know who bought the debt?
Hi Michael
My concern is similar to everyone elses. Have a total of 10,330 in debt with BOA credit card services. Had the card for 7 years and just recently, last 3-4 months been past due because I lost my job for almost a year. Finally started working end of April. Been in contact with BOA about settling my debt, first time I called they quoted me forgiveness of around 6100, and four installments of $1030. Paid off in normal 93 days. That was a good amount but I wanted to discuss with my fiancé. Called back two days later and now they are saying settlement amount is going to be different, and installments have to be 1650. That’s a huge difference.
I don’t know why it changed, FIA services says that the rep quoted me the wrong settlement amounts last time. I cant make those new high installments, and they know that since they took a income/liability assessment.
Should I keep calling to negotiate to get the originally quote? What are my options? Im close to the charge off date. But I’d rather settle before hand.
That is a bit unusual. Call me at 800-939-8357, choose option 2. I want to dig into the details a bit more before I encourage you to take your next step.