Debt and Divorce: Divided
In Spring 2013, my then husband, had me purchase a Meat smoker and Surround sound system at a store through GE capitol. We put it under my name only, since my credit was better. In Aug 2013, we split up.
We made agreements on bills, etc. He agreed to continue to make the payments on this account until it was paid off.
Our divorce was finalized summer of 2014. We put on there that he was financially responsible completely for the GE capitol account. I then find out he he stopped making payments on it. I now, (having moved from WA to CA last fall), have received a letter from PRA stating that if I didn't get a hold of them with payment arrangements, by March 23 (I received this letter March 19), they would seek legal action and I would also be responsible for court fees.
I do not have any extra to make any kind of larger payment, I could only afford about $50 a month, if that. Also, I will loose my apt and have no money for other bills if they collect on this.
Is there anything I can do since it was finalized in the divorce that he would be financially responsible for the account?
—Jessie
Getting divorced is stressful. Part of that stress is figuring out the finances, and who will be responsible for paying outstanding bills, including credit cards that may not be in your name. When the opposite is true, where your ex spouse is supposed to pay off credit cards that are in your name, things can go very wrong.
What can be worse (depending on the situation), is the fact that divorce is often not all rainbows and sunshine — quite the opposite really. I do not know whether you are on good terms with your ex, but if you are not, and you are hit with a debt collector calling and threatening to sue on debts he was supposed to pay… it can bring up old feelings – that mix in with these new feelings – which may not be all that productive. In other words, you may have left the marriage angry and hurt, started to heal a bit, and now may be angry and hurt with new stuff when you thought you were passed all of it.
And emotion can sometimes drive us to make poor financial decisions.
With your finances being as tight as they are, my feedback about your options may come off looking more like hurdles to clear. I am also posting my feedback more broadly because I do not recall covering this topic on the site before (other than in comment replies). We can get into more specific details in the comments below. And anyone dealing with divorce and debt is welcome to post questions and concerns in the comments below for feedback.
Divorce and Divisible Property – Loans, Debt, and Other Bills
It is far better to face the division of your credit cards and other loan responsibilities in advance of your divorce being finalized. So much so, that I would encourage liquidating assets in order to payoff any loans and credit accounts that are held jointly. If you have the luxury of time to plan, along with the ability to have open and productive communications, I would encourage doing some of the following:
- Close any joint accounts and pay off the balances owed. If you cannot pay off balances, still close them so that no additional charges will be made.
- Get your own credit cards as soon as you separate or divorce.
- Remove each other as authorized users on any open credit cards that are in your name only and that you will keep.
- If there will be unpaid balances still owing on joint cards, consider doing balance transfers of equal value in order to make a clean separation.
In order to take a planned approach to divorcing your finances, you will almost certainly need to maintain good communications with your soon to be ex partner. If it is in both of your nature to plan your finances, even if you are not getting along well, or seeing the division of assets and debts equally, it is in both your best interests to part your financial ties as cleanly as possible.
Clean separations are, of course, out of the question in some divorces. And you really must watch out for yourself in this regard.
Divorce: With Debt Do We Part
Many divorces are contentious, making it difficult or impossible to plan ahead and divide debts through mutual cooperation. In that case, you have to be able to express yourself to the court and through your attorney. Even when everyone is on the same page about splitting of assets and liabilities, things can get weird.
If you are unable to liquidate assets to pay off all debts so that your finances and debts can be separated with the divorce, and if you are still able to communicate well about debt and money with your ex, or soon to be ex spouse, you may want to consider some debt relief options.
Over a couple of decades of working with people to resolve debt problems, I can think of oh so many files that would have benefited from working together to eliminate debts prior to divorcing, or by communicating well about problem debts after the split.
If you are reading this, have healthy communications with your ex, or soon to be, and will have marital debts still owed after divorce that are unaffordable , let me take you through a quick tour of the main stream options for debt relief. These are limited to debt intervention steps:
- Enroll in a debt management plan through a credit counselor. This closes credit card and other accounts enrolled which is great. You will get lower monthly payments through the interest rate reductions that the counseling agency has set up with most credit card lenders. You will have a predictable amount you can budget for each month until all of the debts are paid. The problem here is that these payment plans go on for an average of about 4 years. You are not getting much separation from that.
- Pull all of your cash resources together and negotiate settlements with your creditors for less than the full balance as quickly as you can. If you are already late with payments you may be able to use this strategy immediately. If not, you may need 6 months or more to work through settling bills, and longer than that if it will take more time to save up money to fund offers.
- Filing chapter 7 bankruptcy while married can be smarter than filing by yourself after the divorce. This can help avoid a situation where a judge tells you to pay these bills, and your ex to pay some others, but having that later become unaffordable for one of you, but leaving the other on the hook for the balances the divorce decree said you were not responsible for.
Your creditors do not care about your divorce, or what the judge said about who was going to be responsible for paying what. They just care about getting paid. If they cannot get it from your ex, they will be trying to collect from you if they can. Even if the account was never in your name, and the judge said you had no responsibility in the final divorce decree, but you acquired the loans or debts while married and living in a community property state, creditors and collectors may still try to hold you liable and sue.
Things change in/after divorce. It is much better to make a clean break from your joint finances, even if that means staying married long enough to file chapter 7 bankruptcy as a couple (which can be over in as much as 90 days). If negotiating lower balance pay offs with creditors is the path that works best for both you and the ex, assign responsibilities and share costs. And while I am an advocate for settling debts on your own, I have been a referee and negotiator on customer files with couples that were separated or already divorced. There were many cases where I do not think success would have been achievable without the outside assistance. It is not a bad idea to seek outside help to coordinate some of this.
What to do When the Divorce Decree Doesn’t Go as Scripted
Here I can speak more directly to your original questions and where to go from here. How things can shake out with who gets what debts that are remaining after the divorce may not be ideal. When you end up paying an account in his name, or you are left with the assumption that accounts in your name will be paid by him (because that is what the judge said was to occur), the frustration when things do not go as planned can be maddening!
Here are some things you have to concern yourself with:
- Check your credit reports regularly for any late pays. You may want to look into paid credit monitoring with alerts set to email you anytime there is a change to your credit. You can stay on top of any payments being missed by prodding your ex along, making a payment to preserve your credit, prevent accounts going to collection or worse.
If you are contacted by a debt collector, jump on any and all options to deal with the situation immediately. You may just avoid being sued for collection by being proactive. This could include making arrangements to settle or pay off the debt collectors or creditors. And may also include you hauling your ex back into divorce court to be made accountable to the agreement to pay. Connect with your divorce attorney about your options.
You may find your ex filed bankrupt leaving you fully responsible for payments. The sooner you know the extent of what you are dealing with the better. - Be prepared to accept the payment responsibility and then hold your ex accountable. That can mean going back to court. With you in another state, the costs to bring your ex back through the legal system may not be worth it.
It appears you are in no financial position to deal with the debt, or force the issue upon your ex in order to get this resolved with the debt collector. You may just need to:
- Be non responsive to the debt collector and work toward quickly saving up roughly half of the amount owed and then negotiate a settlement with the agency.
- Call the debt collector and relay the issue and your present financial condition, letting them know you will be in contact to resolve the account as soon as you can.
I would not recommend succumbing to debt collection pressure to make any form of payment plan that you know you cannot be consistent with, or that can cause you to not be able to meet your basic expenses.
A Quick Note to Divorcing Your Best Friend (it happens)
You should still look to disentangle your finances, even if you and your ex spouse plan on staying the best of friends. Your ex may be the epitome of responsible with their finances, and you may have never been shown any reason to not trust them. But it is not always a matter of just the ex. There is anyone they may connect with later on, and there is also rampant identity theft and major data breaches. A joint account credit card could be stolen from your ex and maxed out, thereby causing you headaches and challenges that would not have occurred otherwise.
If you have an attorney already, you should speak with him/her to get a grip on how you can meet your personal goals when divorcing. If you do not have a divorce attorney (and maybe didn’t and are already divorced), talk over your situation with one.
What I covered above is just the basics about debt and divorce. There are so many more subtopics than who gets the credit card bills. Anyone with questions or concerns about their divorce situation is welcome to post in the comments below for feedback.
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.
My ex-spouse and I are debtors on a joint account, but the family court ordered me to pay the debt alone ($26k). I will be able to discharge my debt to the creditor through bankruptcy, but what can I do to settle my ex’s debt to the creditor, and my obligation to her?
That is a very responsible question to ask.
There is little your ex can do but drag you back in to family court. You may be able to avoid that by being open and proactive about the situation with the ex. The solution to settle, and if you are going to fund it, could ease the credit pain she may end up feeling (unless she took on the minimums).
You could also think about working something out with her to cover the minimums until your chapter 7 is cleared. Afterward, their is no trustee deciding your financial affairs.
Who is the creditor?
May 2012 $11559. credit card judgement was placed on me. Dec 2012 got divorced. My X was ordered to pay our debts. He has not and will not pay this for the simple fact it would benefit me. There has been no pymnt activity since April 2012.
I have a small amount saved – $3800 which I was going to use for down pymnt on house. But now bank won’t lend because of judgement.
Should I offer that as settlement to credit card?
What is the name of the plaintiff that sue you? What is the name of the collection law firm handling the case?
In North Carolina, are charged-off debts on a credit report included in the equitable distribution of debts to be split and paid by the divorcing parties?
Are the debts passed the SOL to sue in North Carolina and/or is there any intention to resolve the unpaid debt?
Talk to your divorce attorney about where there are advantages or disadvantages for you in this.
I was married for 23 years and my ex husband handled all of our finances. I ran my company and he was suppose to manage the money. He took out credit cards out in both our names. After our divorce a year ago he was ordered by the court to pay off the debit and not allow it to be charged off. He never did this so this month (May 2016) I just began trying to pay off what I could afford to do. The only information I could find on this debit owed was from my credit reports which showed all charge offs. . After negotiating these debits with Chase and Citibank and settling on an amount lower then what was owed I realized they had charged off the debit and sent me a 1099-C which my accountant filed for my 2015 taxes… When I called Chase and Citibank to tell them they sent me a 1099C and did not tell me these were charged off when I was negotiating the debit with them they basically said too bad. we got our money. It was my fault as I should have read the 1099C’s when they came in and I did not. What do I need to do now? Or is there anything I can do to reverse the 1099c’s or the negative credit rating on my reports.
One other question if you don’t mind we also owe Discover card $15,000 and when I called the attorneys office Weltman, Weinberg, and Reis which is handling the collection of these monies I told them my ex was responsible they said it didn’t matter as I was responsible too no matter what. I asked them if I could negotiate this down and they said NO. Is this debit negotiable and if so how do I work with them to reduce the debit as I do not have $15,000 to pay them but can pay half right now.
I have contacted all credit agencies and placed all these cards in dispute.
Signing off completely confused and thankful to have found you.
You should contact your accountant and look at filing amended returns to account for the income that was probably calculated that would need to be adjusted by what you paid Chase and Citi. Both banks will be making adjustments on their end.
The paid collections on your credit report are going to remain too, but the impact those will have on your score will diminish over what amounts to a brief period of time the more positive things you have on your credit.
You can negotiate a settlement with Weltman Weinberg and Reis on the Discover account. You might want help on that one. fill out the consult request form you can click to at the very top of the page if you do. I will call you and talk that over.
Putting the accounts in dispute is often not a good idea.
You can look at taking your ex back to court on this stuff, but that will not stop what is happening right now.
I live in FL. Home in KY went into Foreclosure because my ex didn’t pay the mortgage. They sold it and are coming after me for the balance of the loan. Divorce decree states all debts were his. I gave him a Quit Claim in 2009. There is no money here – however, if I sell my mobile home how much can the debt collectors take? Is any of it safe from them?
How long ago was the foreclosure and when did your ex husband stop paying the loan?
Who is it that is trying to collect from you now?
Are you being sued?
While trying to refinance our home with my new wife to buy property, I find that I have 3 judgments from the actions of my ex-wife and several negative charge offs. All of the judgments and all of the negative accounts were listed in my divorce decree as the responsibility of my ex, but several were unknowingly in my name without my knowledge or authorization. All of the summons were delivered to my old house where my ex resided until divorce was final. One of the judgments was from Arrow; I wrote a letter to all three agencies asking that this be removed, since they are no longer in business. I went to court and asked how I could file a motion to vacate the other two judgements and they told me to get an attorney….??? I never received anything regarding these judgments.
Any ideas?
I moved your comment to this page about debt and divorce. How much do all of the judgments add up to? Were all three with Arrow? When was the divorce final?
It can make sense to try to vacate judgments you knew nothing about, but the costs of that fight, without any guarantee, could make settling the debts more cost effective.
Thanks for the fast reply.
I will contact the credit card company to see about a settlement. I am just hesitant to pay anything towards “his” debt because it’s a fight to even get him to pay child support, let alone reimbursement. But it looks like that will be my only route to take to get my credit cleaned up.
His student loans are all private. Through Great Lakes, which sold them to Key Bank. The last payment made on those was 2008, I believe. Is there a SOL for student loans in Arizona? Is it possible to fight to get them taken off completely?
Thanks in advance for your words of wisdom. I’m at my wits end trying to find out how to clean up my credit in order to purchase a house, with these things lingering.
Taking the view that you are helping yourself first might help.
The SOL to be sued on private student loans in 6 years in Arizona. There is also the federal limits for negative credit reporting, which is up to 7.5 years since the last payments in this situation. That time is likely about up, but you will want to monitor your credit reports and make sure those fall off when they are supposed to.
If any of those loans were federal, and you are the cosigner, you are going to want to come up with a strategy.
In 2011, I got a divorce and my ex agreed to pay for his student loan (I’m the cosigner) and a joint credit card. He has never paid on the student loan (100k balance) and has not paid the credit card ($2300 balance) since Nov 2014. These are both negatively affecting my credit. I am working with the court to get an enforcement against him. However, as the cosigner on both, until he refinances or pays off the debt it will remain on my credit report. Is there anything I can proactively do with the creditors to get it to fall off quicker?
The credit card can be negotiated and settled for a lower lump sum payoff. As the cosigner with shared legal responsibility you can negotiate and pay the settlement in order to eliminate your risk of being sued for collection, and to get the account to show zero balance owed on your credit reports. You could continue to seek help for reimbursement through the courts.
The student loans are going to continue to cause maximum harm to your credit reports for as long as they are in default. If the ex gets them out of default using an income based repayment plan or some other form of rehab, he may be able to consolidate them later, and get you out of the loop. Do you know what his situation is? Would he be able to get setup with making payments to bring the loans out of default in order to qualify for different options? Are the loans all federal, or are some private loans too?
My ex and I divorced in 2007 , and we both lived in Ohio at the time. We did a quicky dissolution and I shouldn’t have been so impatient to get away from him. Anyway, we kept the 1st and 2nd in both of our names even after the divorce hoping he’d sell the house, but that never happened, and he lived in it until around this time last year. I moved to Pennsylvania in 2008. We had a 1st and 2nd (HELOC) with BOA at the time, which apparently defaulted in 2012. With the payments falling behind, both loans were sold to Greentree Servicing. During all of this, I was never served with papers, or had any correspondence from BOA, Greentree, the Ohio courts, attorney’s, nor my ex regarding any of it (apparently, my ex-mother-in-law signed for papers in Ohio that I was to be served with, but obviously never got them due to the divorce and her hating my guts). After recently checking my credit report, I found all of this out, and that the home had been foreclosed upon, sold in a sheriff’s sale to Greentree Servicing, and we were past the redemption period. (thanks ex-husband for letting me know all of this) Greentree purchased the home (from themselves??) in the sheriff’s sale for roughly $14K more than was owed on the home. We owed $161k, they bought it for $175K, according to the county recorder’s website. According to the county recorder’s website (this is how I found all of this out) there is no deficiency judgement on the 1st that I can find, and I believe Ohio law has changed that the SOL on foreclosure judgements has changed to 2 years from the foreclosure being final. Anyway, Greentree had never contacted me about collecting on the 1st, and when looking at my credit report, it shows up as closed and a $0 balance with BOA for both the 1st and 2nd . Now, the Greentree account for the 1st shows up as collection/charge off and closed on one report and open/collection/charge off on another, and foreclosed on the 3rd. As far as the 2nd (HELOC) that Greentree bought, I have been paying that every month $100 (all that I can afford). I maxed out my 401K loan to pay off the credit card debt my ex left me with. I rent an apartment and current on all of my other bills. I recently sent Greentree a hardship letter and threatened filing bankruptcy if they didn’t agree to a settlement, as I can’t afford to pay them the $33K balance when I have paid over $50k in credit card debt (mostly my ex’s doing) out of MY retirement funds. Now the Greentree (HELOC) account has gone from open/collection to open/charge off/collection, even though I pay them every month. They verbally agreed to a settlement, my ex to pay $8,500 and me $3,100 out of the $33K that is still owed. They will not do a single-party release and getting my ex to pay is like pulling teeth. I will not pay them anything until I get a confirmation in writing from them regarding all of this. Anyway this change (the 2nd now listed as a charge off), my credit has decreased over 100 points since the hardship letter was sent. We never received a 1099-C for the 1st, which I don’t think we will since they paid more than we owed, but how can they buy it, if they already had it? Are we still on the hook for the 1st in any way? This doesn’t make sense. And as far as the second, do I continue to pay if it is now marked closed? Can they file a judgement for that? Does any of this qualify under the Mortgage Relief Act? I pay Greentree what I can every month and my ex pays nothing, and I think they see that, by offering me less of part of the settlement than him. I need this settlement, but can’t afford the $11.5K all on my own to cover his portion, and I most certainly cannot afford an attorney to fight him over this. Please advise, I need your help!!!!
I would encourage you to speak with an experienced foreclosure or debt defense attorney in the area of Ohio the foreclosure took place. Post the name of a nearby city and I can email you contacts I may have around it.
Generally speaking, the first lien holder will bid on their own properties. That is not the unusual part. But it is odd they bid that much over the value of their mortgage note. I am not sure why that happened.
It does not sound like you are on the hook for the first. Does that loan show zero balance owed on yours and your ex husbands credit reports?
If you are only paying 100 dollars on the second, and that is not something they agreed to, you can be sued for collection. The account showing as closed has no impact on anything at this point.
Greentree will have to sue in order to get the judgment. They have your address in PA now right?
Settling with Greentree would be great. You need the ex to step up with this. Until he does, or you have every reason to believe he never will, I would probably wait to pull him back into court to seek payment for the credit cards and other bills it sounds like he should have been paying.
On scale of 1 to 10, with one being now way, and 10 being highly likely, where do you place your ex with coming up with some or all the money to pay the Greentree settlement in the next 90 days?
Michael,
Thanks for the prompt response.
The home was located in Etna, OH.
Here’s what I found on the 1st. I’ve checked both Credit Karma and pulled my 3 report summaries from Equifax. On the summary report from Equifax, the 1st shows as closed and $0 balance on all 3 bureaus. BOA states the same on the summary report.
When I dig deeper, the Equifax report shows all three bureaus reporting a balance of $161K on the 1st, but they are all marked as closed. Equifax shows it as closed/balance date 1/15, last reported delinquency 11/12, real estate mortgage charged off account. TransUnion shows it as balance date 1/15, collection, account charged to profit and loss. Experian shows balance date 1/15, foreclosure, last reported delinquency 1/15, foreclosure proceedings started, charge off. Even the the come was foreclosed and sold in 2014 to Greentree.
On Credit Karma the 2nd with Greentree is showing as closed as of 3/20/15, collection/charged off as bad debt, profit and loss write off with TransUnion, but open on the summary report from Equifax from all 3 bureaus. Equifax shows balance date 6/13, $35k balance, collection, installment loan, last reported delinquency 11/11, transferred to recovery collection account and still open. On TransUnion, balance date 3/15, balance $33k, collection, terms of loan uspecified, account charged to profit and loss and still open. Experian reports NOTHING.
So, what I can see is we are in the clear on the first. The second seems like a complete disaster. Greentree has my address in PA. They used to send me monthly statements, and haven’t for months. I agreed verbally to pay them $100/mo, and also restated such in my hardship letter to them recently. I find it odd that I send the hardship letter, and they suddenly close the account right after. I do not want to file bankruptcy, but I did threaten that in the letter in hopes of them settling vs. trying to sue at some point.
My ex wants to talk to an attorney that he gets free through work before he does anything. My fear is that this may stir the pot and they will decide to sue since we do not yet have a formal letter from Greentree agreeing to the settlement. Taking him to court is just not worth my time. I’ve had it with him, and he’s the reason we got into this mess. I can pay the $11.5k, but I’d rather not, and have him ante up since I took on the credit card debt myself. On a scale of 1-10 of him paying in the next 90 days, it’s a crapshoot. Depends on if he can get the $ or not.
Please advise.
Your goal is closure. If you are willing to pay for that, and it may end up that way, but I would wait to see if you can get your ex husband to raise as much money as he can. I am not sure what he needs to run by the attorney. Did he voice his concerns for making that call?
Really quickly, if the 2nd account is now marked as closed, can they still try an collect? Also, why does one bureau show it as an installment loan and the other as a mortgage, and the other have nothing on it? Thanks!
A closed account is still collectable.
It is a bit odd that the credit bureaus are showing the Greentree account so differently, but I am not surprised in the least. They have different ways for interpreting and displaying account types and status.
Michael,
I found out that the sheriff’s sale of the 1st mortgage netted enough to pay the remaing balance on the note (including late fees, court costs, taxes, etc.) There was no deficiency judgment and Certificate of Mortgage Release was issued stating it has been released and satisfied, issued by the court. This occurred in January 2014 in Ohio. With that being said, all of my credit reports are showing an owed balance of what we owed at the time of the foreclosure. What can I do to get the credit bureaus to show that as a $0 balance since the note was satisfied in the Sheriff sale? I know the “foreclsoure label” will remain on my credit report for 7 years since it is a foreclosure, but I’d like the bureaus to show a $0 due vs. the balance owed before the forclosure. Can I dispute it? What would I send the credit bureaus so it can be disputed? The Certificate of Release? Please advise. Thanks!
That is what I would do, and with the release and any other substantiation. Send certified mail return receipt requested. Post an update with the outcome of the disputes and lets go from there if necessary. Hopefully this is all that it takes for the reports to all get updated and show accurately.
Mr. Bovee,
I am sorry to keep asking you back to back questions instead of putting it all in one. My head is spinning and I can not remember everything at once. If I wanted to know if BOA wants to settle and they ask me personal questions on why I can not pay, should I let them know anything for example me and my husband separating or any financial issues? Also, I wanted to buy a used car to get around because the one I have is starting to break down and is costing me more money to fix then keeping it. Should I wait to purchase another vehicle also after the settlement if I am able to go that route?
I would tell the bank about my divorce or separation. It explains the inability to pay better than many types of set backs, as you are suddenly a single income household. I would not get into the details beyond that though. It is self explanatory most of the time.
If you can wait to get dependable transportation, I would hold off on any purchases, especially any that involve financing like auto loans.
You can post questions and concerns as they come up. You can post them in the comments of any page of the site.
I forgot also to ask you should I stop charging little minor stuff on the credit cards because as stated I am not late yet. Thanks!
I would immediately stop charging anything to all of your credit cards. The ones that are at zero balance and not joint with your husband I would put away and not use again until after your settlements are completed. Any joint credit cards with your husband I would close. Any accounts in your name with him as an authorized user I would call and remove him (including BofA while your payments are still current), and ask him to do the same with his accounts.
I forgot to add that I do not have any other debt but my BOA credit cards and a house payment. My car is 9 years old and has been paid for 4 years ago. Thanks!
That is good. You will be in better shape with a single income household after the divorce when the credit card bills are resolved.
It sounds like you and your husband are splitting up with clear communication lines?
WOW! Thanks Michael! I am so glad I googled and found your articles. I read all the links you sent me and they helped 100%! The reason why I asked about my checking/savings account and moving them is because I felt that even though I move them can BOA ask me why did I move my account (if they would know that) and how much money I had? I heard that you can get a better settlement with settling later because they always try to get the most out of you first
but that might be a risk right? I want to get the best settlement possible. What do you think I should ask for first without being ridiculous and do they want to settle at all before the 150 to 180 days? Thank You!
They can ask about why you moved the account, but I doubt they will. You could tell them you are separating or getting divorced and that is why, or not tell them anything.
They will not know what you have in your accounts with another bank.
Settling with your bank right before 180 days late has traditionally been a good idea in order to both limit collection risks, and get the best settlement deal. BofA resembles that comment historically, but there are times your settlement is going to be lower by settling with the first debt collector that gets the account. And there are banks, like AMEX, where you normally are settling with a debt collector no matter the timing.
My general BofA negotiation target is 40 percent just after 150 days. There are files that still see roughly 30 percent, but many of those are coming after 6 months, and with a collection agency.
Hi Mr. Bovee,
I have 4 credit cards with BOA and my husband has 2 credit cards. We both have a checking and savings account with them also. All 4 of mines equal out to about $25 and his is about $9. We are both authorized users vice versa on all cards. We had these cards maybe somewhere between 2 to 3 years and have been current. However my husband and I will be separating after 24 years of marriage. I will be living in the house we bought with my two teenage daughters and he will be moving out. My mortgage payment is $1380 a month and a year I ago I had to step down from a higher position at my job and took a $23,000 a year pay cut. I had health problems mentally and physically. It was okay to do that because me and my husband was together. Now that I have a mortgage and 2 teenage daughters to take care of its going to be hard. My husband is going to help me financially but only with support for my daughters. Anyway, I called BOA last week to see if I can settle an amount to pay off all my credit cards even though I wasn’t late. I wanted to plan ahead because I know I will not be ale to make those continuing payments with my current expenses. I read in your article that you to be at least 150 to 180 days late before anything can be done. I wanted to ask your advice as far as settling with them after those amount of days and also what to do with my checking and savings account that I also have with them. I do have the funds to settle if they can d0 30%. I am not delinquent in any accounts that I have. I do have a lot of other unsecured credit cards as well as store cards that all have zero balances. I use only my BOA credit cards because they were with the bank I have my checking and savings account with. I had those other credit cards to help me increase credit score. So my questions are below if you can answer them. Please advise! Thanks so much for your help!
-What should I do with my checking and savings account with BOA?
-Can BOA credit cards see how much I have and can they pull money from there?
-How much do you think my credit score will be affected if I made a payment settlement?
-Would all my BOA credit cards be sent to the same collection agency?
-Do I settle with the first payoff if that is so?
-What are the steps that they go through after 150-180 late payment?
-If the collection goes to an attorney, do they offer to settle at an amount or they will sue you for the full amount plus late charges, interest and attorney fees?
Thanks for waiting for me to finish the above article Kim. Please review it along with my feedback to your questions.
If the checking and savings accounts are jointly held with your husband, discuss you being taken off and opening accounts at a bank you will not be negotiating settlements with. I cover why you do not want to do your regular banking (deposits and bill pay) with a creditor you intend to settle with. If you needed to move banks anyway, perhaps he wants to keep the accounts.
If the accounts are separate from your husband already, still use the tips in that article about setting up a different account. You can keep the BofA accounts open with little money in them.
BofA can see your balances in your accounts. They typically would need some contractual provision to pull the money out if you do not make the payments. Moving banks is a good idea in these situations even without that risk.
I cannot know how far your credit will drop without a ton more detail, and a copy of your report, and even then it will be an educated guess. Those other open accounts with zero balance should be kept that way until after you settle. They will help you recover your credit scores quicker.
It is possible for all of your BofA debts to be sent to the same agency. But it is also likely you will be communicating with multiple collectors. This is not a big deal.
Taking the earliest settlement deal is not a bad idea when you can afford to. Settling early with your bank is covered in more details here: https://consumerrecoverynetwork.com/how-call-bank-negotiate-credit-card-yourself/.
You want to settle before the account lands with an attorney whenever possible. If you have an account land with an attorney debt collector you can still settle. If they were to sue, you bet they will look to tack on fees and costs, but you can still settle credit cards after being sued.