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
Short answer
Yes. If the payment instructions still tell you to send money to FIA Card Services, the account has not been sold. Penncro is an assignment collection agency working your old MBNA, now Bank of America, credit card debt, so a settlement is available through them.
Key points on this page
- Payment instructions naming FIA Card Services mean Bank of America still owns the account. It has not gone to a debt buyer.
- Penncro is an assignment debt collection agency working the account for the bank. It is not the owner of the debt.
- You have the right to request validation of the debt, but it is not recommended when you recognize the debt as yours and want to resolve it by settling. The request may complicate your efforts.
- A settlement can be a lump sum, or a reduced balance paid in installments over several months if you cannot fund the lowest offer today.
- When and how to negotiate depends on the money you have available now, how long it would take to raise more, whether a better deal could be negotiated direct with Bank of America or FIA Card Services, and whether you are current on your other cards.
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 Bank of America or FIA Card Services Account with 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. He is available to speak with you about your financial struggle and helps people resolve their debt problems daily.
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.