Settling Credit Card Accounts with a Collection Agency After Charge Off
Credit card accounts have not been paid for a while and now collection companies are calling. I settled one late bill with my bank and I am now tapped out. Can I settle with collectors after charge off?
How to deal with a debt collector after accounts charge off?
—Pay collections
Short answer
Yes. Settling a credit card debt after charge off, once a collection agency is contacting you, is always an option. Sending the account to a collection agency is the most common thing a creditor does with a newly charged off balance, and that agency can negotiate within the limits your original creditor sets.
Key points on this page
- Charge off comes after the first stage of collection calls from your original creditor, which can last six months.
- Creditors have 3 options when they charge off a defaulted account. Placing it with a collection agency is the most popular one.
- Most of this work is done on contingency, so the agency only gets paid if you pay. Your account may sit with one agency for a limited window.
- The agency can only agree to what your original creditor allows, or to what it can go back and get approved.
- You cannot re-age a charged off account. The credit reporting damage was done by your bank, and the collector has no control over it, whatever they suggest on the phone.
- You will have to pick up the telephone to learn your real options. A debt validation request at this stage is often counterproductive to a settlement goal.
Yes, settling a credit card debt after it has been charged off and a debt collection agency is contacting you for payment is always an option. Below is an edited version of an article we published that explains “Charge Off” and what typically happens with your unpaid accounts after they are considered seriously delinquent and the unpaid balance is assigned to an outside debt collector. Settling the debt may be just the opportunity you need to move on with your finances and restore your credit.
For your unpaid credit card to reach charge off, you will have already been through many collection calls from your original creditor. The first stage of collection calls can last six months.
Creditors have 3 options available when they charge off defaulted credit card debt. The most popular option with newly charged off accounts is to send the debt to a collection agency.
Credit Card Debt Sent to Collection Agencies are Mostly Done on Contingency
The amount of time your account remains with an assignee debt collection agency will vary. Let’s assume that the agency that has your unpaid credit card bill will only have the ability to collect from you for 90 days.
The typical debt collector working for your creditor has two ways they attempt to get you to pay; your phone and your mailbox. There are other ways to collect, such as:
- Collection calls to your job,
- Debt collector calls to family members and friends (this does happen – it sucks and is embarrassing).
Lets focus on the most general efforts used by the debt collector who is collecting on your account just after charge off. When a debt collector gets assigned your account, you will often start getting collection calls (at a high volume). You should also get a collection notice in the mail within a week of the agency having contacted you by phone.
You do not have to pick up the collection calls if you are not ready to negotiate a settlement with the agency. My suggestions for speaking to a third party debt collector are not the same as picking up, or making calls out, to your original credit card lender. And you do not necessarily need to send a debt validation request in response to the collection notices you receive in the mail. That is often counter productive to your settlement goals.
Settling an Account with a Collection Agency
Some important details to consider:
- You will have to pick up the telephone in order to learn about your options with the account. I typically recommend that you not limit yourself to written communications with collection agencies.
- You will be speaking to someone who has been trained to push your buttons using the most effective and proven methods for collecting unpaid debt.
- The agency can only work out arrangements for payments that your original creditor allows them to, or where the debt collector can go back to your creditor and get approval.
- You will not be able to re-age the account when settling charged off accounts with debt collectors (the credit report damage is done by your credit card bank, the debt collector will have no control over that).
- Avoid some of the nut job advice on the internet about handling this stage of collection.
- In some ways, you have more payment term options you can negotiate with a collection agency than you would be able to with your bank.
- The collection agency only gets paid if they can get you to pay them (that may not always be the case, but contingency debt collection is the most common model currently).
Charged Off Debt Get Reported to the Credit Reporting Agencies
When this derogatory credit reporting happens the damage to your credit is done. You do not get to re-age charged off accounts. The credit damage from not paying a charge off account can then only get worse if you are sued, followed by getting a judgment against you. The judgment then shows up in the public record section of your credit report. Also, another debt collection trade line may later show up on your credit reports, and this would be considered additional damage.
A debt collector may comment how you should be concerned with your credit report and credit score after the account they are collecting on gets charged off, but this is just a collection tactic. Collection agencies will have no ability to change how the original credit card issuer reports to Equifax, TransUnion or Experian that your account was charged off.
There are tactics and timing I share on this site, and when you want to work with me one on one, that will better prepare you for dealing with outside debt collectors. You can optimize your results by knowing:
- How to negotiate a settlement deal that is timed with internal goals the collection agency has, and even that an individual debt collector may have.
- When to pass on an offer to settle that is too high without being concerned your particular debt collection agency will sue.
- What your bank will allow the collector to do (how low a settlement can get and what payment terms are common).
- The tricks and tactics that will be used to get you to pay more than you may have needed to.
- Collection abuse tactics.
If you are struggling with several credit card debts that are past the charge off stage, you should learn about your options and identify resources for handling the accounts before they end up in more advanced stages of collection which can include being sued.
It is important that your next step to deal with your now charged off debt be the step you take to put the debt to rest before the situation can deteriorate further. If you are serious about resolving unpaid debts and want to develop a workable plan, getting started is easy. Just post more about your situation in the comments below, and lets go from there.
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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.
Have a charged of credit card with Capital One with a balance of $2,173.21. Charged off about a year ago. In April received a letter from Law Offices Weber & Olcese, PLC from Damon C Non- Lawyer Collector asking for payment. Wanted full amount and had no way to pay so didn’t respond. On July 9th 2016 received knock at the door and was served Summons And Complaint from local court. Haven’t called anyone yet and don’t know options. I read a bunch of complaints about this company settling with people for set payments and stopping lawsuit and then coming to find out that they followed truth with court and your a no show and judgement against you. Then they start wiping out banking accounts and tax returns for way more then original balances and what was agreed apon.
It is important to get any settlement agreement in writing before you pay. If you have the written agreement and proof of payment (showing you paid how you were supposed to, and by a certain date), you can fix any mistakes or errors of future collection, should they occur.
Can you pull money together to settle for a lump sum?
Not really but I could make like $300 monthly payments starting next month. But that’s taking out medical bills from my daughter.
You may have to get them to agree to accept what you can afford. I am not a fan of making monthly payments on collections in the court. It usually means you have to consent to a judgment. That is okay if it cannot be avoided.
I have a page up you should review about negotiating payments or a settlement when sued.
I came up with half and they said they agreed to take 50% as long as I pay by 7-29-2016 at their office by 4:00pm. We said I wanted email verify that would settle for $1086.00 and after 24 hours haven’t received anything. Im going tomorrow to pay in cash. They said that they will then send written papers to the court to drop the lawsuit. I’ve read so many complaints against this company that I’m afraid I’m gonna give them this money and they won’t follow through. Is it wise to pay cash? I don’t want them having my banking info cause there are a couple complaints that they actually falsified court papers and went to people’s banks and wiped out checking accounts. Don’t know if that’s true or just dishonest clients trying badmouth them. Also what should they be given me in writing once I give them the cash showing paid in full for less then full amount? Thank you for your replies!
Great site. I just called USAA to settle a Credit Card that have a $9500 balance. It was charged off and the debt is about 4 years old. They told me they could only do 50% and they would let me do 12 months worth of payments.
I also have a HELOC with them at a value of $61k. I haven’t worked on negotiating that…it was also charged off.
What is the best I could hope for on a credit card settlement.
You left a little money on the table, but not much. I would hold off accepting the credit card settlement if you want to settle the HELOC. You can sometimes use the multiple accounts to get the best outcome. Call me tomorrow for a consult if you like. I can ask some questions and go into the details of what I would do in your situation.
You can reach me at 800-939-8357, ext 2, or fill in the talk to Michael form in the right column of the site.
Hi Michael, I want to say thanks so much for all of the great information you provide. I visited a hospital last year for some tests and was of the assumption that my insurance covered the costs. I recently discovered I owed $130 and called the hospital to pay the balance directly. They told me that I would have to contact Kevin B. Wilson law offices (debt collector) and discuss the balance with them. I recently (5/16) received a letter from the collection agency asking that I notify them within 30 days to dispute the validity of the debt which had skyrocketed to $888 due to ‘contractual attorney fees’. Is there anyway I can settle for 50% of this balance and pay it all at once or set up a payment plan? And if so, how would I go about getting that settlement? Should I send a letter to them requesting validation? I’m a full-time student currently living with my parents who cannot afford to pay a debt this large. Any information would be so helpful, thanks so much!
This is aggravating. Call me to go over some details and I will make some suggestions from there. You can reach me at 800-939-8357 ext 2.
Will do! Thanks for your willingness to help; I’ll give you a call on Monday.
Hi Michael,
I have a 6000 debt from a Discover It card. It is not to a collection agency yet, however im sure it will soon be. Can you just give me a quick guess at what % they will typically take as a lump sum payoff? I read some of the conversations on here about certain banks like capital one being aroun 50%.
Thanks in advance!
How long have you had your Discover Card?
How much of the balance is from charges made in the year leading up to payments being stopped?
Were there balance transfers or cash advances in the last 12 to 24 months?
The answers to those questions will help me offer better feedback.
Hi,
I have a advanta charge off account. DLA was 06/2010. I am trying to buy a house and when my report was pulled I found out. I called Carson Smithfield and they said they would settle for 520. and mark it as settled.
Can I negotiate with them to have a pay for delete since the statute of limitation expired?
Thanks!
The SOL to sue may be gone, but the SOL to credit report does not appear to have expired. It is highly unlikely to get a deletion in return for money at this point. Here are some good videos on my Youtube channel to watch:
Does pay for delete work?
How long can a negative stay on my credit?
If this is the only thing holding you back from a home purchase, you will probably be able to get that done once this is resolved, even with it still on your credit.
Hi,
I have a question about a charge-off on our credit report. We have been delinquent on our payments since 2012. I missed a few payments and when I went to start paying they rejected our payment and sent it back saying that our account had gone into collections. I spent all day on the phone calling to find out who our collectors were and how to pay on our debt. I was sent on a run around chase and never found who held our debt. They told me they would contact me once they found who bought it from them. I tried again a few months later only to have the same thing happen. We never got a phone call. Then I ignored it. Now 3 years later we are trying to apply for a mortgage and we are being denied because of this out standing debt. I am receiving conflicting suggestions on how to handle this from the internet. I am hoping you may have some insight on what we can do. We have never been contacted by the credit company, nor any collection agencies
Call me to go over your situation in detail Mallory. Make sure you have a current copy of your credit report. I can help you get to the bottom of it.
I am not in the office at all this weekend or on Monday July 4th, but call me at 800-939-8357, ext 2 on Tuesday.
5/27/2014 Date of letter received from Levy and Associates LLC – representing current owner: Atlantic Credit and Finance – Original Creditor: Household Beneficial. Amount due $11,000. The letter offers me to settle the account with them for $5,500 but only if received by 6/27/14. No payment or contact by me to them was made.
6/10/2015 date of letter received from Kirschenbaum, Phillips & Levy PC telling me that they firm has combined with Levy and Associates LLC and Kirschenbaum and Phillips, PC. The letter just states that same creditor and original creditor as above and I can contact them within 30days if I dispute debt. No contact to them by me was made
3/12/2016 date of letter from Kirschenbaum, Phillips and Levy PC telling me that my account is currently being serviced by Kirschenbaum, Phillips, Levy and that the current owner is Atlantic Credit & Finance Special Fiance Unit LLC. The letter goes on to state that for my records, the account number at charge off and creditor at chare off (HSBC Household Realty Corp) and charge off and current balance $11,000. And if I have any questions to call them. No contact to them by me was made.
It is now 2016 and have funds available to settle this account, but I do not want to trigger a suit. So, how do I handle this? I could go as high as 50%, so $5,500 but prefer to pay less say, 30% which will allow me to settle two more accounts. Last payment was made in 2012. SOL is 6yrs in my state. I don’t want to risk a lawsuit and would prefer to settle and get this behind me. If I just pay the 50%, $5500 that they asked for to settle in 2014 and just mail in that payment with a copy of the letter, would they accept it and just send me a settlement letter.?
Thank you for your advice. I appreciate it.
I would NOT just mail in the amount in a settlement offer that is expired. You want to generate a new letter, but first, what is the amount of the other balances you are trying to settle, and who is collecting on those? I like to be as inclusive with strategy as possible.
Thank you for your reply.
The other accounts I would like to settle are:
1. Nordstoms / Portfolio Recovery Associates owns the account. Balance due is $2800 / received letter 10/1/2015 saying they will accept $1945 for settlement if paid by 11/1/2015. Also letter says that the account transferred to litigation dept, however no attorney has personally reviewed the circumstance of the account.
2. Advanta / Carson Smithfield is collecting. / balance due is $3800/ recieved letter 2/1/2016 saying they will accept $1100 if paid by 3/1/2016.
The Advanta settlement is good.
PRA does sue, and though that letter says the account is/will be placed with the litigation team, it sounds like they have not sued yet. It is highly likley though. Try to avoid that by negotiating a better outcome with them too.
When you settle the Atlantic Credit debt you will be alerting other collectors that you are a better collection target than they may have previously scored you as. Do you have additional resources you can use to settle with PRA? Carson Smithfield is last on my list of priorities if it were me in this situation.
So plan of action should be to call:
1. Call PRA for Nordstrom’s and negotiate a lower settlement with them and pay that. Max I have is $1100 at this time.
2. Call to negotiate a settlement with Levy for Atlantic Credit and pay that. Max I have is $5000 at this time.
3. Then pay Carson Smithfield for Advanta when funds are available. I’ll have to wait a month or two for this one.
I have two additional accounts under collection that are with PRA:
1. Wells Fargo – $12k – received letter on 1/10/16
2. Wells Fargo – $7k – received letter on 5/18/16
BOTH letters for the Wells Fargo accounts state the following: The law limits how long you can be sued on a debt. Because of the age of your debt, we will not sue you for it.
* These two accounts I’m don’t believe I should be concerned with right now as I cannot be sued for them. I can try to settle them at a later time if needed. last payments were made in 2012 on both of the WF accounts also.
Thank you again for your advice.
You have a good grip on your situation and the priorities the way I see them.
Keep me posted with how things develop.
Michael,
I have 2 really quick questions.
If I settle a charge-off by a 12 month plan with the collection agency, how does that hit me for my taxes aka the 1099-C? Do I pay taxes on the whole charged off amount or do I wait to pay taxes when the settlement is paid off?
From what I read it takes apx 7.5 years after charge off for the negative mark to drop from my credit file…. Does that “clock” start ticking when it was charged off? Or after paying this charge off via a settlement, perhaps 12 months later reset my clock and start over?
Thanks!!
Check out this article about how to prepare for tax on cancelled debt, or how to calculate if you will not owe tax at all.
There is no reset on your credit reporting when you settle. The clock starts when you fall behind with payments.
Hi,
Need some guidance to target a few collection companies calling me:
I want to settle these accounts and do not know where to start with my conversation.
Client Services (seeking money for Chase) – amount owed 17000
Norland Group (seeking money for Capital One) – amount owed 3000
HI Again, the third and final one is Admin Recovery LLC Collection Agency for TD Bank for balance of 7500.
How you start off speaking with a debt collector can often hinge on how collectable they see you, and your ability to fund a settlement lump sum vs needing time to pay.
Call me for a quick consult if you like at 800-939-8357, ext 2 rings to me.
I fell behind on payment of my BofA credit card due to medical bills and eventually disability. My account was turned over to NCB Management Services Inc. I was contacted by NCB with an option to pay lump sum or payments. I opted for payments and relayed bank account info and payment amount for monthly debit. I never heard back from NCB – about 5 months went by and was recently contacted by an attorney from a firm called Hayt, Hayt & Landau. When I replied to their letter with proof of the offer to repay, they responded that “their client has determined that the complaint was not vendor caused and therefore, the complaint is unjustified”.
I would like to know what my best options are. I have been banking with BofA for decades and I would like to think that they could let me work this out since I genuinely want to try to repay. I was in contact with them throughout, so it was not as though I was not explaining my situation. I have had no income for almost two years, waiting on SSDI, and my mom had to sell her house to support both of us. The amount of debt is $7792. If I was to try to offer lump
sum, what do you think would be reasonable? This is the only card that I became delinquent on and I want to get this resolved. Will great appreciate any advice.
Targets for settling BofA accounts in collection are great. Given that Hayt Hayt and Landau, a collection law firm, is now involved, your settlement targets will be higher. Can you raise 40 to 50 percent?
Hi Michael
I came to USA five years ago for education. I have completed graduation and then started working..
Until January 2016 everything went so well. I maintained my credit history like treating our own family. No missed payments, optimum usage of credit limit, always less than 27% of total limit. My total credit limit is more than 60K. Here comes the problem, I came to my home country and attended visa interview. but, my visa is still under processing and i’m not sure whether i will get it or not? I returned my leased vehicle under voluntary surrender program. During january to april, i have paid all the bills, rent and everything since then i was hoping i will definitely come back! Now i can’t pay the bills now.credit card balance discover 8500, citi 4500, lending club loan 19000. Until now no late payment has been reported. But from august onwards it will be there on my credit report. since most cards taking 30-60 days time to report.
If i comeback i will definitely pay all the bills soon or later not bothering about credit history. what if the situation is same like now after six months? I don’t want to ditch all these companies but i don’t have option. In my country i cannot earn the same like in USA.
1. will the credit card or collection companies come to my country(ASIA)?
2. if they come, will i get options to negotiate with them? since the money earning will be 5 times lesser?
Please let me know your thoughts
Those lenders will not be chasing you down in Asia.
You can deal with these debts when you are back in the country, or when your finances improve, and when the accounts are out with third party debt collectors. It is very common to be able to settle for less than what you owe when the bills go unpaid long enough.
Focus on the visa, and the rest will get sorted out over time. When things do change, post an update and lets go from there.
Thanks for the response. I will definitely post my situation once there is an update. Regarding visa, it’s not in my hands! Embassy has to issue visa once the’re done with the processing. The bad part is we never know how long it takes?
When I was in college I racked up a ton of debt on a Bank Credit Card. I was able to make minimum payments for a couple of years, but one day I wasn’t able to anymore. Living expenses were too much, and I couldn’t pay anything anymore. When my income rose, I figured it was too late to make payments, so I did nothing. The calls came from the bank, now it’s a collection agency. It’s been two years since I was last able to make a payment. I owe approximately $9000. I’d like to resolve it, but I’m scared and I don’t know what I can do. I don’t answer when they call, but I know they’re calling family members. What are my options now?
Who is the creditor you stopped paying? Who is the collection agency calling now?
PNC is the creditor and the collection agency calling is National Recovery.
Give me a call to go over some additional details at 800-939-8357 (option 2 rings me) if you are ready to negotiate a settlement with National Recovery.
I had a Kay’s credit card that went into collections in I believe 2013 (I live in Ohio). For the past few months a man from Orion’s Management Group, LLC has been calling all of my family members (even some that live hours from me) stating that I owe debt and that I need to contact him. Yesterday he called me at work and then again today stating that I owe $710. He said that I can do one sum of $500 or 3 payments on the $710 but he will only accept my payment via credit or debit card and that I can post date the payments. He said that it must be done via credit/debit card because they are planning to serve me on Monday and it’s the only way to stop the papers from being served. I told him that I have never received any letter about this debt or anything and he said that they sent it and it doesn’t matter if I received it or not but he did give me my valid mailing address however I really have never received any letter. I called Kay’s yesterday but they gave me a different collection agency name, not Orion. The man from Orion said I could call that company (I wouldn’t give him their name) and “follow the paper trail” and that it’ll lead back to his group. I’m just really lost as to what to do and I don’t have the $500 or the 3 payments and I don’t feel comfortable giving him my credit card info.
also, when I look on my credit report (Credit Karma), it lists my Kay’s debt as closed?
That is normal when an account goes without payment for even just a couple months.
The calls to your relatives and disclosing the debt are federal law violations (often state law too). The threat of suing you on Monday (if they don’t, and I doubt they will) is likely a law violation too.
I can email you some Ohio attorneys who handle debt collection violations like this, and often at no cost to you, if you like? It is what I would do next if I were you.
Yes, I would like if you could e-mail me a list of Ohio attorneys, however I’m not sure I could even afford one.
Never mind, I saw that you said it could be no cost. Thank you.
Sent. Let me know how it goes.
Hi Michael,
I live in Alaska and own a fishing lodge. During the crash of 2008 I had defaulted on 2 bank of america cards and was just trying to make my mortgage payments. I had closed them both and was on a payment plan for a couple years but was unable to keep up with the payments. They were both charged off in 2012 and is past the statute of limitations for Alaska. Rather than waiting for them to be deleted from my credit report in another 3 years I would like to negotiate a settlement to get them removed or a change of status on my report. How do I go about negotiating a settlement and what percentage of the balances should I offer. One has a balance of 12,000 and the other is 14,000. I have 6,000 saved up. I would really appreciate your help.
Thank You,
Mike B.
Your next steps for settling those BofA accounts can largely depend on the collection agency handling the accounts, or if FIA (which is Bank of America) has them in house.
Have you received anything from a debt collector by phone or mail so far in 2016?
I haven’t received any type of correspondence from anyone for a couple years. So I’m not sure who is holding the debt. It just says charge off May 2012 Bank Of America on my credit report.
My credit report says the creditor contact details are thus.
BANK OF AMERICA
PO BOX 982235
EL PASO, TX
79998
(800) 421-2110
Okay, thanks Mike. There are a couple of ways to approach this from here. But first things first, and that is to find out who you will be negotiating with. Call the number for BofA you just posted from your credit report. You will give them your social or the account number in order for them to direct you to the right department. You will likely end up speakign with someone in FIA card services if Bank of America does not have your account(s) out with an agency. If one or both accounts are with FIA you will be looking at following a slightly different path to resolving the debt than if you are dealing with an outside debt collector.
If they have one or both accounts out with a collection agency they will tell you who and the toll free number to call.
Let me know what you learn and lets go from there.
Hi Mike,
I talked with Recovery Services at BOA and she said they are still holding the accounts. She said I was no longer obligated to pay and they had sent out a 1099c for 2015. I told her I would like to negotiate a settlement and she said she will contact the legal department and for me to call back in 3 to 5 days to see how they would like to handle it. Hopefully that helps.
It helps. I would suggest you give me a call for a consult. I want to cover what you are able to settle for set beside your goals for doing so. I am not all that optimistic you will be able to get the deal you need negotiated given the circumstances. But let’s talk some more about it off line. You can reach me at 800-939-8357. press 2 to get me. You can also email back the same comment notification email, as those all come to me, and we can correspond through email to set up a time.
Hi Michael,
I am in Boston, Massachusetts.bam hav’s pretty bad credit card situation. I recently lost my job. I have not been working since November of 2015. We recently had our second child and my wife needed to go back to finish her medical assistant accelerated program. I ended up doing ok surviving due to the tax return.
My credit debt as follow;
1) $21000 maxed with Bank of America late since acct still open
2) 13000 maxed with Chase past due/minimum due $1900 late since December 2015 acct stil open.
3) $3000 with best buy/city
4) $6000 with city currently in a a 5 years payment plan with Citi
5) $16000 was with Citi, now is with GC Services, collection service. On Saturday I returned their Tuesday call. They left a voice message with a name and a telephone number. I didn’t know who was that person, so I called and found out they were a collection agency. The lady on Saturday 5/28/2016 offered me 3 options;
1. Divide the total balance into 12 monthly payments ($1,333/month)
2. Pay $440 every month
3. Settle the balance by paying $7,000 by 5/31/2016. I told her that I can’t pay $7,000 in 3 days. She checked with her supervisor, and said that I can pay half by 5/31/2016 ($3,500) and the second half by June/15/2016. The collection lady said I need to connect with her on Tuesday between 8am-5pm to let her know about my decision. I’m barely catching up on some other late bills for credit card, student loan, rent, preschool, money owed to family and friend., Electricity, hospital bills.
My questions are;
-Should I talk to the other banks about settlements, before I try to gather the money?
-Should I negotiate settling the account before it her gets charged off or sold to a collection agency?
-how much time after the account is charged off do I have to select the settlement option?
-can I decline to settle with the bank or agency, and when I get the funds call the collection agency to .ask fory settlement.
I would like to settle the balance, but can’t come up with that amount in 3 days. According to the collection lady, if I accept the settlement, I need to pay immediately or can’t take advantage of the settlement option in the future.
You are not going to lose out on the opportunity to settle with Citibank if you do not take advantage of the deal with GC Services. And it may make sense to settle other accounts earlier that his one.
I would encourage you to call in for a phone consult and I can provide more details into the reality of your situation right now, and looking forward the next 6 to 12 months. You may determine you want to settle with Citibank first, but on first impression I would likely use my money to settle more debt with BofA first.
You do not have to be in a hurry to negotiate the debts before charge off. You can often get more flexibility after charge off, and the more debt you have to settle, the more flexibility is needed.
You can settle at virtually anytime after charge off. There is no real time limit to share. But you want to avoid being sued, and that is a timing concern.
Call me at 800-939-8357, option 2 rings to me.
Think very much Michael for your prompt response. I called that number around 9pm and left you a voice message. I’m not sure what’s your business hours. In case we don’t connect prior to CG Service’s call, how should I respond to their request? I know they record the call, should I decline all their payment option tomorrow?
I looked at my credit report as well as my wife and noticed that most of the debt is showing under her. At some point she was an authorized signer, but never a co-applicant. Last year I removed her from all my credit accounts. Why are they reporting the debt under her name when she is no longer an authorized user? Her credit score had been severely damaged. Went from 750 to 600. Can they report those debt under her?
I can talk to you more about the credit reporting on your wife when we connect on the phone. It is a process, but you can remedy this too.
I would simply tell GC Services you are still looking at all of your options and trying to figure out your finances and are unable to commit to anything yet, but you will be in touch as things take shape. Be polite, but cut the call short of any other probing questions. You are not declining offers. You are just not sure how to approach your debt, and not just with GC Services (they can see you are late with other creditors).
I can call you back later this morning. I am on pacific time in north Idaho.
We have 3 substantial balances with 3 major institutions that we would like to negotiate a full payoff. Here is the kicker, none of the institutions opted to send the unpaid balances to a collections agency nor did they opt to sue us. The amounts are 58K, 12K and another 12K and were all used for business. I think I heard gasps from everyone, but please understand. We had NEVER been late on any of our financial obligations but used Bank of America, Chase and BB&T to help consolidate with Promo offers debts that we incurred from our business and working capital. We had always paid things off in lump sums because our income was great but then the economy tanked in 2010 and so did our business. With one more pay check we would have been out of debt yet once again for the hundredth time.
It just so happens that a new bill was going into affect at the same time the economy was failing to protect consumers from credit card companies taking advantage of consumers by offering them a great promo rate with great terms then of course if you read the fine print on the contract where it says they have the right to cancel, change and blah blah blah any time they want. Before the law took affect, guess what? We received letters from all 3 institutions telling us they reserved the right to cancel the promo rate/terms and our new payment would be $***** the thing is, our affordable payments increased more than $200 – $600 per month overnight. I immediately got on the phone and asked them to work with us because we were watching our business fold and wanted to continue to pay what we owe. They refused to work with us and from that very day we stopped paying so we could continue to have a roof over our heads and our modest cars.
My husband sold businesses for a living and with a poor economy, recession, job loss and scared/starving US Citizens, his business was completely void of any future that we could see. We started slowly rebuilding in late 2012 and now have plenty of income but our credit is dinged big time. We look great in our bank account but on paper we look awful. We have not been late on our mortgage in over 4 yrs, both cars are now paid off and we have one open credit card with a $0 balance that is only used for medical. Oh yes, I forgot to add that we also lost our insurance because at the same time as everything else was falling a part in our life our insurance premium went from $350.00 to $980 per month over night.
We refused to file bankruptcy because we knew we could eventually settle our past debts or they would eventually just fall off our report which is where all this was leading up to. As of today, I pulled our credit scores and they are over 650 & range into the 700’s but the lending institution says that is not what they are showing on their Equifax report. We have 300K + in liquid assets and nearly 400K in other assets but what that credit report says is ruining our life! We want to purchase some land nearby and build a home but do not want to use all of our liquid to do it.
As it stands, BOA, Chase and BB&T within 3 months completely charged off our debts in 2010, they sent letters saying they were not going to try to collect and never sent the debt to any collections agencies. Is this good? Is this bad? We are not sure. The IRS of course received a 1099 for the debt since it is seen as income and we currently owe 20K to the IRS for that 1099. Truly people, this is not a big deal to us because we do owe it, it’s our debt and we are blessed that we have bounced back unlike so many other American’s from the nasty recession.
There are a million and one stories out there just like ours. But here is our question. If there is not a debt collector and the lending institutions, is it possible, felt as if they had no right to request their money back because my tax dollars were used to bail them out (remember that mess?) that they simply charged it off and allowed us to deal with the aftermath. So where do we go from here? We want to pay them off, yes they will still show on our credit but they will be paid. Will our scores increase with paid charge offs? Does anyone know the answer? Bottom line is, we want to negotiate those debts but in doing so with the institutions themselves could cause the old debt that may drop off by next year to be reported all over again with a brand new “start” date. We can pay lump sums but we simply will not want to pay the sums that were charged off. I know we can negotiate and they would like to have something instead of nothing at all. Where do we start? In a huge snotty greedy corporation such as BOA and Chase, who do we call or talk to? A customer service rep. is going to go by the usual script, we need someone above the script that can talk to us outside of the box, a real decision maker.
Any and all advice would be greatly appreciated. Thanks
It is still possible to settle with all of the banks listed even though they sent 1099c’s to you and the IRS. I have done those, but it can be a real bear, especially with Chase right now.
No settlement or payment is going to restart how long these old collections can stay on your credit reports. But done incorrectly you could restart the clock for them to sue for collection.
Call me for a consult before you do anything Tracy. I will cover how not to reset the SOL. You may put your goal on hold, or what I share may give you encouragement to move forward with your plans. You can reach me by filling out the consult request form at the top, or call me at 800-939-8357, option 2.
I have some accounts that have been turned over to a coll. Agency. My goal is to get them removed from my credit reports. I also owe the original creditor (medical) amounts that haven’t been sent to coll. yet & i have just set up to have auto bank draft monthly for those that still remain w original creditor. I know the collection agency works on contingency, but original creditor still referred me to them for the amounts that have been ‘turned over’.
I don’t want to pay agency as it will still reflect in my report & to my understanding if original creditor is paid then agency has to delete (they are the only one reporting). When I set up my payments with the original creditor for bills that are still in house I was informed I would have to call back to let them know when debt was paid in full so they could stop drafts. My question is should I just continue to allow drafts until my collections amounts are paid then inform original creditor?!
This is an odd situation you have going with your medical debt. Systems are set up to allow a set number of payments, and the service provider or medical billing company should not need to be told when you have paid your bill.
Who is it you are dealing with?
How much are the balances being collected by the agency? How many more months would it take to continue those payments to pay off all of the bills they sent to collection?
Hi,
I have a charge off with BBT credit card. They are still the ones collecting the debt. I have been paying $100 per month for the last year. The account still says Charge off of course. I have tried to negotiate a payoff to settle the account but I have been unsuccessful. I owe about $5000 and I have about 50% of this stockpiled. They won’t budge. What can I do?
Thanks!
If it were me I would stop paying the $100 a month and let a month or two go by before negotiating a lumps sum settlement with BB&T.
Dear Michael,
A conglomerate bank stopped accepting my electronic payment approx. 16 months ago.. I received 3rd party letter to claim debt by month-end. Please advise.
I am no match for phone conversations or negotiations at this time. I tend to over-commit beyond my actual ability to pay which is why I had a credit card. I did not need this but I thought I could handle one. I am barely self-sufficient and have yet to recover financially and return to the full-time workforce.
Thank you for this section of information as well. I wonder if I should write to dispute or wait to have a free consultation?.
Who is the bank? What is the approximate balance owed today? Who is the debt collection agency?
I do not recommend disputing a debt just for the sake of it. It can lead to a higher risk of being sued.
I can offer better feedback once you post answers to my questions.
Bank: Juniper /Barclay
Amt: 10K+
Forster,Garbus &Garbus
Thanks.
Okay, thanks. You are at a higher risk of being sued based on what you have shared.
Can you pull together 40 to 50 percent of the balance owed in order to settle with a single lump sum pay off? How long would it take to raise that amount?
Thanks for the honest feedback…
That would take locating a position at double the pay or more and about a year.
Michael,
Dear Michael,
I used to pay all my bills on time and never missed a payment until 2011. My husband had a brain haemorrhage in 2009 which changed our life and situation. In 2011, I moved back to India so that I could take proper care of my husband.Unfortunately, he did not recover and passed away last year. I want to come back to the United States and settle my charged off debts. I do not know how to begin. How to find addresses for authorized debt collection agencies for the debts I owe.
I need your help and guidance. Can you provide me your official email address so that I can provide you more detailed information…Thanks & regards..RM
I would start with looking at your credit reports and look for any creditor that shows your unpaid debt with a balance still owed to them. That generally means they have not sold the account. You can call the creditor and give them some personal identifiers and ask who they have the account out with for collection. If the account is not places at that time you can sometimes deal directly with the original creditor to settle the account.
I would then look at creditors that are reporting a key derogatory, but who show zero balance due to them. This will typically mean they sold the legal rights to your debt. You can then look to match up balances that were charged off by your creditor with any collection agency showing on your credit reports. If you cannot find any additional collection agencies showing for accounts the creditors is showing a zero balance owed, you can call the creditor and ask who they sold your account to. Banks and lenders will usually tell you the name of the company and provide a toll free number.
Why do you want only the addresses of the debt collectors?
I am sorry I don’t just the addresses.Let me send you more detail info so that I could better guidance from you…thanks
The email address you get these comment notifications from is mine.You are welcome to send me details that way.