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.
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?