Credit Card Debt in Canada: negotiate with the bank or the collection agency?
Thank you for your support on this website. It has prepared me so much! Wonderful kind work you do! I'm from Canada but I'm assuming it's similar so your advice will help some....
I haven't been financially able to make a single payment on a credit card (CIBC bank) debt of $6500 for approximately 8 months and have not contacted them about it other than once to say that we can't pay. It has recently gone to collections. I just got a tax return that will enable me to settle for $3500 if they accept. So I called the bank saying I want to settle on a lump sum payment that is a lower. Immediately the lady said they will accept 80%, which is more than I can pay. I told her that is still too much and she said that's all she can do and to call the collection agency.
My question is, do you think I'll get any further with the collection agency or should I keep trying with CIBC collections department? What's my best bet? Do I ask to talk to other people "higher up the ladder"? If it seems like they won't budge, will they still if I push it?
other info:
I have a mortgage with CIBC and have equity in my house; however we've been trying to sell the house to pay off the debts for 2 years and the house isn't getting any offers due to the crumby market right now. We also have another credit card that I was just summoned for for the amount of $16,500.
What's my best bet at this point: negotiate with the bank (visa) or with the collection agency?
—Rochelle
The principles of how and why debt settlement works are not any different in Canada than here in the US in my experience. At some point, when payments have not been made long enough, something starts to look better than nothing.
Settling Credit Card Debt with Collectors and Banks
The last time I worked with a person assisting them to settle debts in Canada was several years ago. I worked with a married couple where one was from the US and one from Canada. They had both US based credit card debts, and credit cards through Canadian banks.
We were able to help them settle all of them. There was not much difference in the savings rates on the settlements, but some of the timing of negotiations were a little different. Also, a couple of the accounts were settled with a collection agency, or a collection law firm.
Settling with a Debt Collection Agency in Canada
The couple mentioned above settled an account with a collection agency for roughly 40% after 14 months of non payment. The settled with an attorney collector for 60% of the balance owed a couple months before that.
The same processes for settling credit cards with banks, debt collectors, and law firms were applied. Initiate negotiations over the phone. When speaking with anyone about the debt, stick with the a brief description of the hardships that led to your inability to keep payments on your credit cards current. Talk about hardships that are on going. Ask about any options they make available to account holders like you.Bring up the fact that you did some searches on line and read about some people having settled debts for less than the balance owed by borrowing from a freind or family member what they were able to lend. That you might be able to try to borrow from a family member if the balance were reduced to a certain amount.
In your case, your source of funds is from a tax refund, which is still a one time lump sum cash infusion. It works the same way as a loan from a family member.
Once you can agree to a fixed settlement amount, get the deal in writing before funding a penny.
Being Summoned for Credit Card Debt in Canada
I am not all that familiar with the court processes for suing on credit card debts in Canada. I won’t be of much help in this regard, other than to say that settling is always an option no matter what stage of collection you are in.
What are your thoughts for managing the credit card you are being sued for? Are you thinking to manage the smaller balance one with a settlement, while making payment arrangements on the larger?
I would be very interested in keeping this page going with updates from you, or other Canadians settling their credit card debts. I will provide whatever feedback and experience I can along the way. I may even be able to reach out to some past contacts in the collection space that operate in Canada to seek out some tips for you. If you are up to participating through the comments below, this page may be able to be a resource for other Canadians seeking to resolve credit card bills with settlement.
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.
The banks are practicing usery! Grinding people into poverty! Evil money grabbing bastards!
Hi There!
I have a $32k loan with RBC that was sent to a collections agency in 2012 when I lost my job and was unable to make payments. I made some lump sum payments totalling $6500 within the first yr and then stopped as I was unable to do anything additional. A year later I started making monthly payments of about $250 until Jan 2018. In June 2019, I received a call from a different collection agency advising me they had taken over my file. Since July 2019 to present, I’ve been making monthly payments of $450, however, would like to negotiate a settlement. Can you please provide some insights or advice on how I can negotiate to settle for 50% or less of the original 32k? My parents have agreed to help but can only help so much. The agent previously mentioned (on his own) that they would settle for the original 32k and minus I’m the interest. When I told them I didn’t have that money or anyone to borrow from, and if they could reduce further, he said no as this was the only debt I had and one day I could be making enough to pay it off so the bank wouldn’t settle for less and they could leave my file open for years and just wait for me to pay it all off. Also, he said, the bank would ask for proof that I couldn’t pay the full amount- such as bank statements, proof of income, etc. What are my options? Should I stop making payments for some time and tell them I can no longer afford to make monthly payments? I may be able to borrow some money and settle for a small amount? Please help!
Thank you!
What is the name of the collection agency you are currently paying?
MJR, previous to that it was alliance.
If it were me, and I confirmed the ability to pull 40% or more together, I would stop, and wait a month or 2 to negotiate a settlement.
Assuming a bad debt has gone to collections, can agreeing to a one time lump sum payment, at a negotiated reduced amount, affect someones credit rating negatively?
That can vary. Generally, if you have one unpaid collection on your credit only, and you settle it, your credit is going to improve right away. But if you settle one negative, leaving others unresolved, you may not see any improvement.
I have been paying on a student loan for my son. I don’t know the amount that was borrowed but it was through Sallie Mae and I have been paying on it for at least 17 years but now I send the payment to Navient. I’m thinking now that should have been paid off already .Could you check in on it for me? I’m a widow my husband has been gone for 8 yes and I was paying several years before that. Thanks for your help.
You or your son will need to check the loan status with Navient and be sure that all payments have been applied correctly.
Hi
I’m a Canadian Citizen, but currently US resident. I moved to USA in 2006 with my husband who was American. I had 2 credit cards which had total debt of about $2,000 and i continued to pay them online. However in late 2008 i hit financial hardship (when my husband passed away, there was no money to be collected due to circumstance of his passing) and we were young so neither one of us thought about life insurance. During this time i could not afford to pay the credit cards and at the same time i forgot about them due to what was going on, i was completely and utterly a mess. I was dealing with other things that were going on here in the USA at the time (loosing a house, and a car). Over the years I got back on my feet, i’ve gone home to Toronto few times to visit but i still reside in USA, I’ve never been contacted by any creditors or banks and honestly after everything that has happened i forgot about those credit cards over time. Now in 2017 i receive two letters from MetCredit stating that they are collecting a debt on behalf of the Canadian credit card bank and the 2 sums are totaling over $8,000. I never owed this much, last time back in 2008 before my husbands passing the amounts were around 1/4 of that. Now i don’t know what to do, i can not afford to pay those amounts, or any to be honest. I have no intentions of moving back to Canada anytime soon, maybe in 10 years from now, when my daughter is grown up. What can i do? and what can they do? do they have right to come after me after all these years? I’m afraid of what can happen now.
It is unlikely in the extreme that they will chase you down on 8 year old debts from Canada. Are these debts still appearing on your credit reports?
Hi Mike, I hold CIBC ($500) and RBC ($1000) Canadian credit cards, of which i stopped making payments since OCT 2015, I want to know when will these be reported to Credit bureaus and how can i settle these debts. I came on a Permanent resident visa and moved back to my home country as I was unable to survive there with no job.
I am surprised they are not showing as unpaid on your credit reports now.
You can settle with the banks directly, or they may tell you the accounts are with third party debt collectors, who you can also call and negotiate a pay off with. Be sure to get everything in writing before you make a payment.
My 49,000 dollar unsecured credit card debt with Royal Bank in Vancouver BC has gone to collections after 6 months of not being able to pay. Does that mean that Royal Bank is not going to sue. I have no assets and had to go on social assistance for the last 6 months due to not being able to find work. The government has funded for me to go back to school at 55 years old change careers and try and find a job. I have never had debt before and before these problems was with Royal Bank for 30 years and always paid my bills on time. I think i will apply for Bankruptcy assistance. I would like to know what you think and if you think i will be sued even if i don’t have anything. I called the Royal Bank and they told me they closed my files and sent them to collections. That’s all they could say. I’ve been getting calls from a collections agency every morning at 7:30 to 8 am. I don’t answer they just leave messages. This has been going on for over 3 weeks.
Thank You for your time,
Susanna
Royal Bank sending your account out for collection does not mean you are less likely to be sued, it means you are one step closer to being sued. I am not saying you will be, but banks go through a process with unpaid debts. More often than not, you see an account float from collection agency to another debt collector, before being sued. And this is how it typically starts. But not every unpaid account ends up in court.
You can go through the bankruptcy process, or try to negotiate a settlement when you situation improves. If bankruptcy is a good step for you, it is often best to just get that out of the way now, rather than drag out the collection process.
How soon do you think you would be in a position to gather up 30 to 40 percent of your Royal Bank credit card balance?
Hello, i have a student visa card (cibc) its about couple years back, and i owe 617.00 however due to low income and much more i dont know whether to settle with the bank or collections agencies. The agencies said 200 for me to come up with which is still a bit hard as i have a child and bills to pay. I want to get it off my credit report asap. BUT I don’t know what to do.
If you can settle for 200 that would be great. Just be sure to get any verbal agreement from them in writing before you pay.
You are not likely going to get it removed from your credit, but updated to show a zero balance owed, which is all you really need for your credit to get where you want to go.
Can they attach Canadian debt to US credit report??
I do see that happen from time to time.
So… I moved from Canada for 3 years with no intention of ever moving back… I walked away from about $20,000 in credit card and $50,000 in a vehicle loan. The vehicle was obviously repo’ed right away and auctioned for less than I owed.
I am now moving back to Canada. What will I be walking back into? I have no Canadian bank account or income. What power will the system have over me? Can I just carry on my marry way because I have no Canadian account or income to be garnished or?
Unpaid debt does not go away. Debts can typically be collected on for more than 3 years, and will impair your credit reports for much longer than that too.
You have insolvency options you can look at, and settling can make sense in many situations too.
Who were your credit cards with originally?
Are you aware of any debt collection agencies or debt buyers that are working your accounts currently?
I have no idea about any debt buyers or collectors working any accounts. I don’t have a Canadian bank account or even a phone number for that matter. I will only reside in CA, possibly for a short term.
What is insolvency? How does it differ from bankruptcy?
You mentioned debts can typically be collected on for over three years. How long before they “can’t” or have given up on the debt?
I am really not concerned with my credit rating. It is truly refreshing to live a cash only life.
Call the hot line number to the right of the screen on this page and talk to a Canadian debt relief professional about those concerns.
The province of BC
I worry about not being able to enter the country anymore. Could you please help me on that?
Who were your credit card bills owed to in Canada, and what were the balances last you knew?
How long ago was it that you last paid anything to each account?
What province were you in at the time?
My cards were from cibc, and 1 department store Sears as I remembered. The amount was $6000 something and last time I could pay was in 2009 september.
Thank you for your help.
I believe the statute of limitations is 6 years in most Canadian provinces, and even lower in a few others. If it gets past the 6 year mark without legal action, you won’t be required by law to pay them. Not sure how long it will stay on your credit report though.
Hello, I have an issue that is annoying me. I was living in Canada and have to leave for family issues.
I was not able to pay my debts, credit cards.
Didn’t know what to do as I had no income and far away is never easy.
Today I want to pay what I owe, but I don’t know where to ask for that or who to address me.
Hi Dominique,
I run a non-profit credit counselling organization in Canada and we might be able to help. Depending on how long it has been since you stopped making payments, your accounts may be in collections. This could be doing some serious damage to your credit score in Canada which could cause a lot of problems if you decide to live north of the border again.
I’m not a legal expert but I did some research and outstanding debts shouldn’t be a problem at the border – it’s a civil matter and the border guards are more concerned with criminal history.
Michael’s questions are a good place to start – you need to look through your records to find out who you owe, and how much you owe.
Give us a call at 1-888-389-0476 and we can talk about the best ways for you to get out of debt in Canada.
Best wishes,
Jeff
Hello Jeff thank you very much for your information.
I want to know if you have a phone number not 1800 as from where I live I cannot call those numbers. It doesn’t work.
Thank you very much for your help.
Hi Dominique,
Try the toll-free number and if it doesn’t work, you can try our local number at 416-915-7283 and we can put you through to someone who can help!
Best wishes,
Jeff
Thank you very much.
I run a non-profit credit counseling organization in Canada and I thought I might add my two cents. Sometimes issues with collection agencies or debt repayment aren’t necessarily specific to one debt, it could involve a larger picture. Canadians are at an all-time level of indebtedness, so these types of issues come up all the time. If that is a direction you would like to explore, we are happy to help or even direct you somewhere to help assess your situation. The first step needs to start with you — handling things on your own, if possible, will minimize damage to your credit. If that’s not possible, you could look to credit counseling – we can step in and make sure the collection calls stop. Check out our website http://www.consolidatedcredit.ca to find out about how we can help you become debt-free. As always, Michael’s advice is on target, however if you would like to explore others avenues, please reach out. If I am off target, please feel free to disregard.
hi there,
Just when I started to get a little worried about BMO, I got a call from a collection agency with offices in Richmond Virginia. I think it was called al International. I have not received the letter from them, but they said that BMO offered a settlement for about 20 percent off, around 6200. He made a vague threat about my credit in the US being affected and said that they would not take less than that. I told him I could probably only get 1500 and we basically left it that he would call me in a couple weeks. I asked for him to send me a letter since I had not received anything. I’ve heard that BMO can be the hardest to deal with, so I’m just curious about what your advice is for next steps and hoping that you may be familiar with this particular collection agency.
Quick correction – the collection agency is Allied International.
I am familiar with Allied International. Read through this article that relates to credit cards having just been sent to a third party debt collector. Watch my video as well. The end of month and end of assignment strategies I cover in the video are often useful when settling with a collection agency.
Thanks for the direction. I can definitely get a little closer to what they’re asking, sounds like I just have to figure out what the magic number is, and preferably not go too far over! I mentioned that I had just settled with CIBC for approx 40% and only had so much room to ask for help to settle another card. What was interesting about this call is he actually seemed surprised that he even had the account since I was cooperating and they told me they’d call me back and never did. Also that I had never received a letter or supposed settlement offer. I didn’t tell him this, obviously, but there was a paper statement sent to my old address a month or so ago, even though he had my correct address. Anyway, there’s always a chance I provided too much info up front, but the whole thing just seemed very disorganized, so I guess we’ll see where it goes from here.
Hi there and long time no talk. My father in law was sick and subsequently passed away and, to be honest, I stuck my head in the sand through all of that and “forgot” about my 2 remaining debts. In the meantime, I had not heard from either companies, although, my main number is now disconnected (for other reasons, not non payment!), so they couldn’t call, but I did not receive any correspondence by mail that I am aware of. That, of course, changed yesterday when I received a letter from a law office in California for a debt owed to CCL Financial Inc. Of course, I have never heard of CCL, but I assume that it’s possible my debt was sold to them or they are acting on behalf of MBNA – is there way to find out which one? The letter is a notice that they’ve received my account and MAY take legal action if I don’t pay up. They say I can dispute the debt, etc…they are showing the final amt owed which matches the amount if I pull up my account at MBNA plus an additional $500 or so of “interest”. Can you point me to some info about my next possible steps here? Thank you!
Are you still motivated to settle these accounts? Are you prepared financially?
I would encourage you to contact me off line to discuss further. The American sister company to the one that bought your debt is very active collecting through the courts here in the US.
I think you have my direct office line, but if not, you can reach me at 800-939-8357, choose option 2.
Hi there,
After providing a settlement offer to BMO which was approximately 30% of the balance, I received a counter offer for approx 60% due by 11/26. I need to either counter or hold my ground, but I’m not really sure how to proceed. All correspondence with AIC as of late has been via email. I first received a ‘casual’ email saying that my offer was rejected and they came back with a new amount. I responded that I was working with my family to see what was possible. I received a response that they would send the official offer letter (received via email attachment) and then mentioned a form in case I want to counter which I have not yet received.
Thoughts?
Depending on the ability to raise additional funds I would counter with a round dollar figure close to 37-ish percent. I am doing this in the event they counter lower, I leave myself room to… maybe you can just give me a call. I can hit on the strategy I would use, but that is consistent with your goals and abilities.
Thanks – I made an offer that was a whole number around 37% of the balance and I’m waiting to hear back.
After a little back and forth I received a settlement offer for 37% of the balance. I was given a 2 week deadline which was a little tight considering the holidays, but I was able to make it and paid the settlement yesterday! Down to one final card now!
Nice! Keep up the determination and great work.
Hello,
So I got a call back from RBC rep. last night and she was nice, however, our conversation consisted of the settlement. I reiterated that is all I could afford (I could go up slightly but want to hold out as much as I can), she asked if there was assets to which there is honestly none business wise. She then proceeded to advise that this will affect be personally. I was taken aback as this is an incorporated company, totally separate from me personally (personally I hold a mortgage with RBC which is why I am a little scared). The credit card is in the company name and was solely used for business nothing personally ever.
Her argument is that the card cannot just be in the company name and that someone needs to be named on the card. I had a feeling she was trying to scare me into me thinking this could turn personally to affect me. I insisted that she send me anything where I said I would guarantee this personally which I know I never did.
Have you ever heard of this? I know I never signed nor guarantee this card personally.
I regularly check my credit file regularly and this credit card (from incorporate company) in question has never been reported ever on my file personally.
I would encourage you to talk this over with a consumer law attorney in order to proceed with confidence about your personal credit and liability for the business debt being clear.
Debt collectors, even ones employed by banks, do say peculiar things. I would want to verify what you were told.
Hello,
I am trying to settle a Corporate RBC Credit Card. The company is incorporated and no longer operating. It has not been formally closed as there are impending claims in court (not related to credit card debt), one of which has been settled with a contribution from my company and insurance picking the majority of the settlement, my contribution for court settlement was 7000.00 from personal sources, hence why I cannot continue to pay from my personal sources and looking to settle my RBC debt .
I am trying to settle the RBC CC $5000.00, no payment has been made since December/14. I have tried numerous times to contact them to make arrangements for a settlement (in the meantime they continued to increase due to interest, despite my attempts to rectify this account earlier) and finally on April 6 I spoke to a rep who informed me they needed to see it in writing, along with a financial statement. The company has not been operating since 2011, simply remained open as it cannot be dissolved until no actions in court exist. I have already provided the written letter along with some info. on the court claims and amounts being sued/already settled for, financial statement showing the latest debt from the court action settlement.
My questions are
1) The RBC rep advise that I might need to send my personal info. to which my question is, that would not be irrelevant as the corporation is its own entity, my personal finances are nothing to do with this (despite me getting the funds from a personal source). Can they ask this of me? Despite the company not operating and bringing zero money in, I am getting the money from family to try and settle it.
2) RBC also advised that they would not take anything less than %80. My letter I stuck with my original proposal of 2000.00., is this unreasonable? Can I ask them to freeze the account so that I do not continue to incur interest while RBC drags their feet on this matter?
The representative with Royal Bank of Canada is likely checking off boxes for the type of settlement they can approve at this stage of the collection process. You may only be considered 3 months late (depending on the day in December you paid).
I would not offer up any personal financial details if this is strictly a business credit card debt.
I would stick to your offer if it were me, and I had no personal liability for the debt.
You can ask them to stop charging interest and fees, but if they are contractually able to per the card holder agreement, they probably won’t.
ok, thanks for the help, much appreciated
Works for me! I appreciate the explanation!
Hi,
I sent the email with the latest wording around my discretionary income and received an email reply asking for the detailed breakdown and 2 years proof of income. I am in agreement with not providing the details per our earlier comments, but is there a particular response you would recommend?
No. I would focus on resolving debts with your other creditors and circle back to this one later.
Great news! I went dead on CIBC and my contact called me this week. I told him I would not be providing any further Financials and was in talks with my other banks and lo and behold my $7000 settlement offer was approved today. Just waiting on the official letter to have it in writing! That’s 42% of the total debt. Now I have to get to work on the other banks. MBNA fell flat when I said I wasn’t providing Financials, but they’ll come around. Thanks as always for your help with this.
Great job settling your account with CIBC!
Hi Clancy,
That sounds like a complicated situation, and I might need some more details to share with some friends who are collections lawyers. If you’d rather not share any more details on this forum, feel free to e-mail me at AskJeff@ConsolidatedCredit.ca .
Thanks,
Jeff
Can a Canadian law firm serve papers in the states for credit card default. The papers were not served to me but my sister who has the same first and last name as me. She has returned the papers saying that this person does not live in the said address, but they have sent it back to her. I do not live with her and I do not have a permanent place to live. Can you please give me the address of a good lawyers in Ottawa. I do not have anything in Canada other than my house. Can they put a lien on my property.
Yes I’d be happy to help you further. I’ll keep an eye on this thread, or feel free to e-mail me at AskJeff@ConsolidatedCredit.ca .
Remember – there’s a different between a Credit Report and a Credit Score. The report (which is free), is basically a long list of your credit usage. You have to pay for the score, which might be useful at some point as you prepare to apply for a mortgage – if it’s too low, you’ll want to work hard to improve it.
Best wishes,
Jeff
Thanks for the intro, Michael!
Hi PA, maybe I can help.
If you have plans to buy a condo, you’ll want to rebuild your credit so that you can get better mortgage rates. The first step is looking at your credit profile to see where you stand. Canada has two credit bureaus: Equifax and TransUnion. They’ll send you your credit report for free, which is basically a history of all your credit activity. If you want your all-important credit score, they will charge a fee… but it might be worth it, to track your score as you rebuild your credit.
In order to rebuild, you simply need to demonstrate good credit ‘worthiness’. Creditors want to know that you’re a responsible credit user. You can do that by ensuring you make payments on time, month after month. If you’re being rejected by credit card companies, try asking for a secured credit card (you will put down a deposit, which usually equals your credit limit). You could also diversify your debt by getting a personal loan that is small enough that you can easily repay.
Do the right things and you could see credit score improvement in as quick as six months.
On my website, we have a guide to rebuilding your credit: https://www.consolidatedcredit.ca/personal-finances/credit/rebuild-credit/
Good luck!
wow, thank you so much for you response. I will do that first thing tomorrow. I will call equifax & ask them to send it to me. Hopefully it won’t make me cry out. I will have more questions as soon as I get this report. Do you respond personally to inquiries on your website, I’m sure i will have more questions. thank you
Hello,
I have just paid my credit card bill that has been giving me grief. It apparently affected my credit score and it’s just one card? Is it possible to get collections to increase my score? I paid above the minimum before due dates, and met all deadlines. Is there someone I can write or talk to, to increasing my score?
For how long were you late with payments?
Who was the credit card lender?
If there was a third party debt collector involved, who was that, and did they appear separately on your credit reports?
Thanks for reply, I was late for about 8 months :(. Credit lender HBC (they closed the account & paid it, it was for $500). Then shoppers drug mart MBNA..now RBC. There was no 3rd party involved. I haven’t gotten a credit report. Should I ask for one? I heard asking for one might reduced my score.
I do not see an avenue for you to get the creditor to remove the late pays. I would encourage you to get a copy of your credit report to see what is on there, and how you are being impacted by the now paid collection.
What are your financing and credit goals in the next few years?
Hello Michael,
I have never really thought of that. I hope to buy a condo by next year and want to get my credit back up. What finance & credit avenues are there to pursue? Thank you
I asked a friend that is a debt and credit professional in Canada to offer some feedback related to your goals, and bouncing back from collections on your credit reports.
Stay tuned.
Thank you so much Michael, greatly appreciated
Thank you – the one about increasing the offer from the original 6500 – or the one repeating the income information?
The one that opens with how income fluctuates.
Thanks as always for your response. After sending the above mentioned email, I received a call from the manager of the person I have been working with. He informed me that the amount had NOT been approved and we needed to work out a better date so that they could take it to the VP. So, after some back and forth we agreed on Apr 27 and he informed me it would go to the VP and they would get back to me in a couple days. A week later, I finally heard back from my original contact only to find out that they still haven’t sent the offer for approval because he needs a more detailed breakdown of my finances. I feel like I’m being given the run around and I’m not sure what the angle is? So – first of all, obviously I’m going to renegotiate the date since they’ve wasted at least a week of my time to get the money to them. But, second – am I at a point where I must provide a breakdown of expenses? If so, any recommendations of what/what not to include? Any thoughts about the stalling? Are they just doing a poor job of communicating or is something else going on? Sorry for the multiple questions and Thank you!!
I should clarify that prior to speaking with the manager, I was told by my original contact that the amount was approved, but not the date…when I spoke to the manager he told me that they hadn’t even sent anything for approval yet – hence more runaround.
If it were me, I would reword the same message you sent last time, but with a little extra language about running out of money before you run out of month, and that the settlement funds are only possible with the help you are getting from outside resources.
You may just want to use your available cash flow to resolve other accounts after this volley back to CIBC, depending on the outcome. You could even let them know you may be able to use the money that is on the table to resolve two accounts you can no longer afford, rather than just the one with them.
Thank you once again. Something like this?
Per my original email to you, my income is approximately $xxx/month. My necessary expenses including home, car, childcare and household neccessities for a family of five leave me with little to no discretionary income at the end of each month. On a good month (ie; lower power bill due to mild weather) I may have around $100 in discretionary income. My settlement offer is only possible with the help I am getting from my family. I may be able to use these funds two resolve two other accounts that I can no longer afford, so I hope that we can quickly reach a resolution either way.
Well said.
Have you had any recent dialogue with Bank of Montreal or MBNA?
I have not heard from BMO in awhile, which is slightly concerning. MBNA calls pretty regularly, but the latest person who seems to have my account isn’t quite as forthcoming with the settlement talk as a person I spoke to previously. She seems to think I should be looking for a higher paying job or, I could take out a loan since my credit in Canada is actually pretty good (!)…I’ve tried to broach the subject a little bit, but since I’m only just now at my 3rd missed payment, I’m not pushing it… I expect the heat to turn up over the next month or so.
Thanks for posting the updates on the other accounts. I would expect things to loosen up toward the settlement discussions in coming months.
Quick question – what do you think about providing a pay stub with pretty much everything blacked out except for the net pay? They have no reason to see how much my health insurance and other deductions are, right? Would that raise too much suspicion or just fall in the ‘none of your business’ category? I have a feeling he’s going to come back asking for income verification either way, so maybe that will satisfy the requirement. Am I playing with fire by giving in with some documentation?
I would not provide anything of the sort if it were me. Just the generalized stuff is as far as I would go. Getting into all of the documentation when settling credit card bills with banks is generally something I reserve for when I have targeted settlement amounts far below what is customary with the individual creditor, and that is warranted with an extreme hardship (major health problem, fixed or no income in foreseeable future, etc).
Your posture just needs a little stiffening on this.
Thanks again for your time! Do you mind if “borrow” your statement more or less verbatim? He mentioned that he would need some kind of statement with my income, but I assume that it would be best to push forward with the minimal information you mentioned above and leave it at that?
Also, when I said $6500, I just said that that was a number that was thrown around when I spoke to my family but that without an actual settlement in the works, that wasn’t for sure and I wouldn’t know how long it would take to get it. Should I continue to be somewhat vague until things look a little more firm? He did mention they would be willing to do it in 2 installments which will help.
My thought is something along the lines of:
Dear so and so,
Per our conversation this afternoon, I would be willing to attempt to borrow $6500 from family in order to settle this debt.
My current income fluctuates, but average take home is xxxx.xx (my income only, I assume). After rent, car payment, household expenses and child care, my family of five is left with no discretionary income some months, and a couple hundred at best in a good month.
Thank you for your kind consideration.
Please feel free to rewrite as you see fit – I have a tendency to overshare and I really don’t want to get myself in a pickle!
Finally, does acknowledging the debt in this way restart the SOL since it would be in writing?
Many thanks!
(I was unable to reply to the original string!)
Comment nesting caps at 10.
What you wrote is fine, and it is just your income.
With the written acknowledgment of a debt in Mississippi, you could restart the SOL. You are only in to this a couple months, so not giving up much ground, but more than that, restarting the SOL is generally a concern for someone who has no intention of paying, or who cannot fathom how they will raise the resources to settle in a few years time. That is not the case here.
That makes sense – on all counts. Should things drag out and a lawsuit is attempted in the future, I want to make sure I understand my rights/valid defences/etc, so your information helps with that. Appreciate your help!
I appreciate your continued participation. Your start to finish account of settling credit cards with Canadian banks will help many later readers navigate their own issues and concerns.
CIBC called and thanked me for the very nice email (THANK YOU, Michael!). They said they will go to 50%, so essentially $8100. While this is a great offer, I want to keep in mind that I need to have money to settle the other cards as well. My question is: Do you think it would be dangerous to come back in a show of good faith to say, I can do $7000 but no more? Or even to stick to my guns at $6500? I don’t think squabbling over $500 would be conducive in the grand scheme of things if adding $500 would seal the deal…but honestly, while we are now putting money away, it will be awhile before I have anything significant to help with the other cards and my husband’s job situation is still volatile enough that I can’t predict what we will have in the future…
I would let them know that you cannot raise the amount they are requesting, not with everything you have going on. You will get back to them if anything changes. Then wait a couple days, and if you can up the ante a bit, let them know you now have 7500, and would prefer to settle your CIBC credit card, but will press on and settle with some other credit cards your unable to pay.
They may respond more wiling to accept your first settlement offer, so that is the why of not countering for a few days. They may accept your counter settlement offer after you make it. They may just stick to their 50 percent offer.
I do regularly encourage people to shop the settlement they are going to do first with who is going to offer the best savings.
Thank you! I did tell him that it was highly unlikely that I could go higher than the 6500, but that I would get back to him and it probably wouldn’t be until Monday or Tuesday as I would have to talk to family and so forth, so it seems I’m on the right path there. Settlement has also come up with MBNA, but I would be looking to start at about 3500 with them as the initial balance is only about 10,000 (ONLY!) and I have heard that they are usually fairly easy to work with. How do you recommend I shop around in that regard? ie; do I call up MBNA (or wait for them to call me again) and just say that CIBC has offerred a settlement, but I only have so much money so here’s what I can do for them? Prior to sending the email to CIBC I did tell them that I only had so much access to money and 3 cards in the same boat, so I did get the sense that that helped the situation a little.
Shopping the best use of your funds can be seen as a method to move things along with a particular creditor (which appears to be what you already have done with CIBC) in order to hit target amounts you can fund, or you are indeed shopping the biggest bang for your available settlement dollar.
Hypothetical: What if the money you had available to settle with CIBC was instead able to fund multiple settlements on other credit cards? The same amount of money was used to eliminate multiple creditors, which for some can mean much lower risks of being sued, prolonged credit damage, etc.
I know you set your sights on settling with CIBC, and perhaps the hypothetical will not apply to you, but it may to other readers, so I wanted to point that out.
I would not wait for MBNA to call again, I would be proactive, but maybe not until I know if CIBC will accept a counter offer.
Makes sense and you’re right, I did do that to some extent for CIBC, but it will definitely help as I continue to work with MBNA and BMO and also perhaps to keep my settlement at the same amount for CIBC, so I appreciate the explanation. I will try to leave you alone for now :). Enjoy the weekend and I’m sure I’ll have more questions next week as I proceed! Thanks again!
Happy Friday! I sent CIBC an email offering an additional $500 for me to come up with outside of my family’s support. I was asked to provide another email with the financial details (claimed to have lost my first one) and include timing with justification. This is what I come up with – will you help me get rid of any emotional details/TMIs? Also – I’m offering the date of 5/15. I really do need enough time to actually get ahold of the money and certainly don’t want to miss this very important due date, but do you think I’m out of my mind?! Thanks as always!
Dear so and so,
Per our conversation today, I would be willing to borrow up to $7000 from family in order to settle this debt. This includes $6500 borrowed from a family member and $500 which I will come up with via other sources (yet to be determined). I have increased my offer to $7000 from the original offer of $6500 in an attempt to reach an agreement closer to what CIBC is asking for and still be within my means.
My current income fluctuates, but average take home is around $xxx per month. After house payment, car payment, necessary household expenses and child care, my family of five is left with no discretionary income some months, and $100-200 at best in a good month.
If this offer is accepted, I will need enough time to receive the money from my family member, deposit it with holds from the bank, transfer the money to Canada and then get the money in your hands. I understand the urgency of this matter, but the last thing I want to do is miss another deadline. I am proposing that I can pay the entire amount by May 15 at the very latest.
Again, please understand that due to the urgency of the situation, my intent is to pay as soon as the funds are available to me. In my experience matters of cross-border banking, not to mention a family member’s sense of urgency, can often be out of my control from a timing perspective, so I am preparing for that possibility.
Thank you for your kind consideration in this matter,
I like it. I would delete the middle paragraph though.
I am attempting to settle some credit card debt. Two of the debts are with CIBC but with different collection agencies. The one agency has settled for 50% and the other agency debt which they say has received judgement regarding their statement of claim said they’d settle for 70% originally, and now it’s 80%. The collection agency that we have settled with tells me that if CIBC has already agreed to settle a debt with me for 50 cents on the dollar then the other collection agency should have to follow that settlement because it’s with the same bank. Would you know if this is true?
I cannot say what level of truth there is to what the collection agency told you about what CIBC would approve of. I would call CIBC directly and ask them about it. It cannot hurt if the 80 percent settlement is out of your reach. Even if it were something you could pull together, I would still make every effort to get it lower.
I can tell you that it will often make a difference, for those of us settling credit card debts here in the US, if the account when through the courts.
Negotiating a judgment debt with CIBC, or its debt collectors, could come at a premium.
Hi Michael,
My husband is concerned that if I have to stop payment on my Canadian credit cards with the ultimate goal of settling the debt, this could somehow ‘bite me’ in the US – are there any circumstances that you can think of, outside of a Canadian judgement being recognized in MS or getting sued in MS (I am reading that MS is not a reciprocal state to Canada, which further strengthens my case) where a Canadian creditor would be able to affect my US credit report? In general the debts are with CIBC, BMO, and MBNA. Many thanks!
Thanks for moving the discussion over to this page.
The litigation risks are as we discussed over on the other page found here (for other readers to follow).
As far as the credit report concerns, how or do, Canadian Imperial Bank, Bank of Montreal, and MBNA appear on your credit reports in the US today?
What if any credit and finance goals do you have for the next 12 to 24 months?
Thanks for your response. They don’t show up on US credit, so my assumption is that will remain to be the case and all will be well in that regard.
My goals are to be in a position to be able to use credit responsibly in the US and to have savings which will allow us to continue to use credit responsibly in the US.
Okay. You may be able to avoid these debts appearing on your credit reports. I would suggest settling all of them in the earliest stages of the collection cycle (within the first several months).
Even if a collection account were to show up on your credit reports, it is not a show stopper for achieving your credit and finance goals. And certainly not for any long period of time if everything else on your credit is maintained well (car loan, mortgage, a couple of other cards, etc).
Can you identify any credit and finance goals in the next 12 to 24 months?
Hi there,
I got my first collection call today – from BMO. I told them I was working, but my husband is currently shut down (true) and I can’t make min pymt. I said I was working with friends and family to come up with a lump sum to just close out the card since I’m not in the country. He said they would need financial info which I dont really want to provide…so I think I need to hold out past that point? What do you think..this is my lowest balance, so it’s a good guinea pig. If I end up settling for more than I want (%) it won’t be too costly.
You would want to hold out from providing any firm financials right now, and for the next few months.
Thank you as always for your quick responses. I spoke to BMO for a 2nd time today and informed them that I am trying to gather funds to make a lump sum payment because I’m in the US, but maybe gave too much info in that regard? My bigger concern is that they keep asking where I work and I have been skirting the question with half truths because I don’t think that’s info I want to provide. In your (I realize non-legal) opinion am I legally obligated to provide full info about where I work? I told them tonight that I am in direct sales (true, but it is suppl income and I’m not very active) and left it at that…overall these guys are my guinea pig with the balance/min pymt being my lowest, but hopefully will be able to use my experience when the other creditors ramp up.
I would continue to skirt with out creating a fiction. I would also focus on the lack of steady income being the hardship, and that being why you are willing to gather cash from any resources you can in order to offer a lump sum.
This would be my litany with all of credit card recovery personnel starting at about 90 days late. You can feel your way through getting them to bring up settlement options as an alternative account resolution option. I have long encouraged CRN members to look for opportunities to discuss settlement in detail after getting the collector to bring it up. This scenario just tends to lead to more productive dialogue from a problem/solution angle, as opposed to every debt is a nail, and every debt collector is a hammer.
Thanks for your response as always. Just a quick update – I received my demand letter from CIBC last week. I’m assuming it was so fast because I told them I wouldn’t be making any payments (Last payment made was in November I believe – I can’t get online to check now because they’ve cut me off!). So, now I just sit tight to see what their next move is, but the agents I’ve spoken to on the phone seem to think it will go to a collections agency.
My account at CIBC is now with the HVAR team and they are talking settlement. They said $10k and I came back with $6500. They want me to prove my case for why they should accept the settlement including Financials. Here’s the basic breakdown. I clear approx $4k/month which includes health insurance, a very minimal 401k contribution (2%) and required deductions. I already have my withholding reduced with some exemptions. My mortgage is $945, 1 vehicle is $725, 2nd is 630, but I was thinking about only mentioning the one. On both vehicles we owe more than they are worth, so selling isn’t an option (at least in my opinion)…daycare is 300/month, car insurance is $230/month, power $200/month (all electric home) and then living expenses for a family of 5. My questions are 1- should I even go down this road and 2 – if I should, what advice do you have for how to write the email and generally how to get through this stage in negotiation. I do believe that being in the us is working to my advantage, but I don’t want to open myself up to a lawsuit if they think it would be worth it to get more money from me based on the info I may provide. As always thank you for your advice!
I would offer something, but very little, and nothing close to even the brief summary you had in your comment.
If it were me, I would only give them top and bottom line numbers. As in:
“Current income fluctuates. Average take home is xxxx.xx. After rent, car payment, household expenses and child care, my family of five is left with no discretionary income some months, and a couple hundred at best in a good month.
Thank you for your kind consideration of this matter.”
Hello:
I am a Canadian citizen living in the US with about $3,400 in outstanding bank credit card balance. I intend to pay off the balance but likely wont be able to by the time my credit card expires in october. How will the credit card company deal with this? Is it possible to continue making payments after the credit card expires? Will i be sued by the credit card company? Any help would greatly help. Thanks!!
Mark – I want to be sure I understand what you are saying. Are you making payments on the card now? If you are not, how long have you not been able to pay? If you are paying, is it less than the required minimum?
Wow hey thanks for the fast response! Should have checked back sooner.
I am making payments each month now and they are the bare minimum but just meeting those monthly minimums (~$200) till october isnt gonna pay off the total $3,400. So i guess im worried about what happens when october 1 rolls around and i still have ~$3K left to pay.
Thanks again!
I think you’re confusing the expiration date for the physical card (a security feature) as if it was an expiration for when you have to pay the card off.
They’ll send you a new card with an updated expiration date for security reasons when your card expires.
Oh, this is from a few years ago.. I guess you figured that out already.
Hello there!
I have a debt of approximately 2,800 that I can no longer pay. I have no source of income and am not sure what to do at this point. Any effective suggestions for me?
thanks
Are you dealing with US or Canadian debt?