Negotiating a Settlement with ARS National Services on Credit Card Collections
I have a friend who have a credit card debt with BofA which was charge off for the amount of $8200.00 in 2010. She tried to work it out thru Freedom Debt Relief in 2012 but was only able to pay around $1500.00. the account was then written off for the amount of $7300.00 in 12/2012. She is expecting a tax refund of $1050.00 this month and she wanted to use that to settle in full her debt with BofA (after reading various comments that you can possibly do it and settle your charge-off account in as much as 10% of the total amount). She called the number of BofA in her credit report but the person who answer her call after verifying her identity says she will have to call a debt collection agency, ARS National Services, because her account is with ARS already.
What does this mean? Can she still negotiate to settle her debt at 10% of the total amount? What should she do? Hope you can help us on this.
What to do when BofA says your charge off/written off account is with ARS National already? Can you call ARS to settle it.
ARS National Services does collect on behalf of Bank of America. In your situation they appear to be acting as a third party contingency debt collector. You can certainly call ARS to negotiate and resolve the charged off credit card debt, but I would encourage doing that when you have a more realistic amount of money to offer as settlement.
I have some questions for you to answer below that could help me offer more feedback about dealing with ARS.
Calling ARS National Services with an Offer to Pay
I am not sure where your friend was reading, but unpaid credit card bills rarely settle for 10 percent. There was a brief period of time at the height of the recent economic downturn where Bank of America was settling accounts for 15 percent of the balance owed just before charge off. Getting that kind of deal approved on a BofA charge off was not all that common then, but I saw a sprinkling. Getting that good of a settlement from ARS National now would be unexpected.
I would suggest being prepared for 30 to 40 percent as a realistic settlement target. I do still see some accounts get resolved for lower than 30 percent. And if your friend does not look all the collectable to ARS on paper (other collections not paid on credit reports, not working, etc.), there may be a shot at negotiating lower, but probably not as low as can be funded with just the tax refund.
When negotiating and settling a debt with ARS National, keep some things in focus:
- Always keep a calm and professional tone when talking with a debt collector.
- When you are on the phone with the ARS debt collector, only offer information that supports there is no ability to make monthly payments, and only limited funds to offer as a pay off (it helps when your credit reports show there are other debts owed).
- Use end of month and other negotiation strategies as a timing method to get a better outcome.
- Never agree to a payment or settlement amount that you are at all concerned you will be able to follow through with.
- Get the agreement to settle from ARS in writing.
Watch this brief video for tips about negotiating and settling with debt collectors like ARS.
What state are you in?
Can you confirm when the past payment was made on the credit card (usually 6 months before the account charged off)?
Are there other collections showing on her credit reports?
Were there prior settlement offers from ARS National Services received in the mail, and if so, when was the last offer made?
Post your answers in the comments below and I will have more to share.
If you are dealing with debt collectors from ARS, and have questions and concerns of your own, you are welcome to post in the comments below for feedback.