Your Options with a Repayment Plan or Settling Your Citibank Account
Have a debt of approximately $17k with Citibank Credit Card, 162 days past due. I've talked to them repeatedly about inability to pay, even offered settlements, but they won't budge. An offer they made of a 5 year 0% plan has been taken off the table, and I can't afford $1000 to bring the account current for 1 month's time. They tell me it will soon be in "pre-litigation". My question is: What does pre-litigation mean, and what can I expect next? They say making a payment of $500 will open up other options again, but I'm supposing it will just "reset the clock" so to speak, and I'll just be out the $5oo (which I probably can't afford anyway)!
What does citibank mean by prelitigation and what are my options to settle my credit card with them?
—Scott
The reference to pre-litigation at this stage of default with a citi bank credit card or personal loan can mean nothing of consequence, or that your account has been, or soon will be, flagged for placement with an attorney who may be authorized to sue you in their effort to collect. If your goal is settling your citibank credit card, you may end up doing that with a debt collector Citi sends the account to, even an attorney debt collection firm. If you wanted to get Citi to accept a payment plan instead, even though they pulled the option off the table, you can still get on a payment plan.
Citibank, Charged Off Credit Card Debt, and the Risk of a Collection Lawsuit
Your account is a couple of weeks from charge off. When the account charges off citibank will do one of three things:
- Assign your debt out to a debt collection agency who will call and write to you on behalf of Citibank in order to collect.
- Sell your debt to a debt buyer like Unifund, Porfolio Recovery Associates, LVNV, Midland Finding etc. These debt buyers use debt collection agencies and attorney debt collectors too.
- Citibank may send your account directly to an attorney debt collector they have an established relationship with in your state for collection and authorization to sue.
Here is a quick read about what banks (not just Citi), do at the point of credit card debt charge off: Assign, Sue, or Sell.
Creditors like Citi bank use the reference to pre-litigation as an effective tool to get you to agree to make a payment. The detail you provided supports exactly that. Having said that, there are a number of accounts that are selected for immediate legal collection action. What you further outlined about Citibank withdrawing the hardship plan offer and that they are not willing to discuss debt settlement, gives me the impression that your account may well be set for fast track referral to an attorney debt collector.
There are Reasons Citi Will Fast Track Debt Collection Efforts
- It may have something to do with account activity leading up to your default in payment (recent cash advances, balance transfers, increased or large transactions just prior to default).
- If you send some canned letter you pulled off a website, Citibank may have flagged your account for legal review.
- What can be seen real time on your credit report, and whether you are paying other credit cards, but not paying Citi.
- Even the affluence of your zip code.
There are some key things I like to see people put in play prior to reaching the stage of pre charge off collection that you are in. Some prepping can help you better know why Citibank might pull an earlier offer, and even when to take the most recent approved deal to settle.
First, you mention that even the minimum 500.00 Citi bank is asking for is not within your budget, but were you to come up with it, would they offer the 5 year balance liquidation plan again? If they do, can you come up with the roughly 283.33 every month like clock work for the next 60 months? If you are skeptical that you can meet the lower payment, I don’t recommend enrolling in the plan. Do you have other credit card debts you are struggling with? If so, will agreeing to a long term balance liquidation plan with Citibank (hardship repayment), help you manage your other credit card debts?
If Citi has yanked the offer to set you up on the 60 month repayment plan, they likely would accept a similar plan if it was submitted to them through a nonprofit consumer credit counseling agency. And if you are looking to get lower monthly payments out of more than just Citi, talking to a credit counselor will make sense. Talking to a credit counselor one on one to get a lower monthly payment estimate is free.
Credit counseling companies have decades of history of getting people set up on affordable credit card repayment plans with Citibank. The counseling agency can often get you a lower interest rate and cut monthly credit card payments across all of your credit cards, rather than you struggling to get all or your credit card banks to agree to a plan, or only being able to get temporary hardship payment reductions. You can speak with a certified counselor today at 800-939-8357 ext 1, and also learn more about consolidating monthly payments.
You reference speaking to Citibank about settling your credit card debt. How were you going to fund a realistic settlement offer were Citi to make one available?
What are the options for settling your credit card with Citibank?
If you do not make a payment, or some arrangement with Citibank, the account will charge off and be put into their collection pipeline. If the threat of pre-litigation in this instance is a collection ploy, you will know as soon as you are contacted by the company your debt is placed with. As soon as you know who that is there are some predictable things that will happen next.
If you want to settle the Citi debt, you have to identify a source of funds to do so. The account is not going to go away after charge off. You will have options to make a payment plan or settle the account wherever it lands. My concern is that you do not appear to have the money to do so.
Have you looked into your options with bankruptcy? If not, you should. Without the resources needed, even if accumulated over time, and a realistic plan to settle collection accounts, the situation can eventually lead to court and being sued for your unpaid Citi credit card. It is often better that you are in court on your terms (with your bankruptcy attorney) than on Citi’s terms with a collection lawsuit.
I should mention that threats of and/or actually being sued to collect unpaid credit card debts is not exclusive to Citibank. Other large credit card issuers like Bank of America, Chase, Wells Fargo, Capital One, American Express, Discover, do sue to collect. Sometimes collection efforts on these credit card accounts wont occur until some time down the road, or after your credit card account is sold off to a debt buyer.
Post your answers to the above questions in a comment reply below and I can offer more detailed 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.
I was caught off guard today by a call from ADR Services letting me know that Citibank plans to take me to court over a $1800 balance on a Best Buy credit card that was opened in 2007 and finally closed out for non payment in 2012. The frustrating part is that is wasn’t me. I’m trying to find out as much information as possible but all I know so far that is that someone stole my identity, opened the account and paid on it for 5 years then just stopped. Now its looking like I will have to battle it in court and prove it was not me that opened up the account or face a penalty of up to $5000. Any help would be very appreciated.
I am not aware of an ADR Services collecting on Citi debts. And not for debt buyers of Citi accounts either. I would be careful, as this could be a collection scam.
I have 6 credit cards, all with low limits, all maxed out. I have been out of work since Feb 2016. I have been paying minimum on all cards but let the CitiBank card slide. It has been 4 months since I made a payment. I have not called them to set up a payment plan. I am wondering what will happen when it goes to a debt collector? Will they find my family’s phone numbers and being harassing them? I have basically zero income to deal with this.
It is less common to have family get calls if they know they are reaching you. If your voice mail message says you have reached “first and last name” there is little legitimate reason to do the dial around to family an neighbors. Pick up a call once every 2 months or so and that is even less cause for the dial around.
You can settle with debt collectors for Citibank. When things bounce back enough for you to do that, it is an option. Citibank sells debts that remain unpaid long enough to Cavalry, PRA and Midland. You have options to settle with those debt buyers too.
Hello. Just learned that citibank closed my account. I have been making 300.00 dollar monthly payments the last couple of months but it wasn’t enough to make the minimum payment. I will be makeing the account current at the end of this month. So i will have made the minimum payment. Will they still turn it over to collections or allow me to make my monthly payments even though the account is closed.
You can typically still continue to make your minimum payments and prevent them turning the account over to collection agencies, but call in and set this all up with them over the phone. Get a schedule of payments all set up with them proactively. If you don’t, you do run the risk of being considered late with the prior payments and them still charging your account off.
You can often get a more affordable monthly payment, even on a closed account, by calling and formalizing the plan.
Hello Michael,
I have a debt with citi bank on a Costco card for $5400 and one with Capital one for $8600, and a loan with prosper for $12000, as another person below, I’ll leave the country in a couple months, with the income I’ll have in my home country I won’t be able to pay. I will need to return for work but just a couple days as a business trip from time to time. What could happened if I just don’t pay? I was renting and sold my car a few days ago.
Thanks a lot in advance
I see very little happen with collection efforts when people leave the country. That can change if you move back and the unpaid Citibank and CapOne are still on your credit reports. In many instances this is something to deal with if/when your plans change.
You could wipe the debt out in a chapter 7 bankruptcy filing before you leave, but that process can take a few months.
You could save up over time to settle the debt long after you leave.
bankruptcy did not help me. citibank placed a lien on my home, after bankruptcy 20 years ago. I have had no luck getting that lien taken off, even after 20 years!~
I am not sure what happened with that 20 years ago, but there are ways to make sure it does not happen again, and that would typically strip the lien too.
Hi Michael! My husband has the same problem with Citi. A judgment of $3.5k against a house he owned with his late ex-wife. He continues to make the mortgage payments (w/a balance owed of $45k…give or take) but all utilities have been cut off. The house has all but fallen to the ground. In fact the property would probably be worth more if the house wasn’t on it. He has an opportunity to sell the property and all was going well until this judgment came to light. We aren’t wealthy by ANY definition of the term.
We are both retired and on fixed incomes. I wish I could say we have $3.5 in an account somewhere…,but sadly we don’t. What might be the best way to approach this? Would like to offer $2k and a certified check (or a wire??) sent on closing day. Do you think they’d go for it?
Also….there definitely IS a judgement on the books, but do they KNOW he owns this property,..and if they do NOT know, would the judgment have come into play if, for instance, he was trying to sell an automobile?
Thanks Mchael!
It is the lien on the home that must be cleared prior to, or at sale. If their is no lien on the automobile it would not be the same thing.
If the money needed to pay for the settlement is coming from escrow it is much harder to get a settlement. Check out my video about settling a debt when you own a home.
hi Michael, I have two accounts with Citibank. One is a regular Citibank card and one is a Home Depot card. They are both approaching the 6 month mark of non-payment. I haven’t contacted them. Today I got a letter from Citibank offering to settle my $1680 account for $674 (40% of the balance) for either a lump sum or with 3 payments. I have until 2/14 to decide. I called the number of that paper and asked if I could pay less if I made a lump sum payment and they said that the 40% was the lowest they will go. Is this true? Is this considered a good offer or is this just the beginning offer? Also, should I reach out to Citi about the Home Depot account? That has about a $9800 balance. What should I expect as a settlement offer on that? I know you said they sometimes deal with those brand cards differently. Any advice is appreciated it. I’m on a time clock now, I think. Thank you
I target Citibank settlements at 35%. That goes for now or later. Later can mean additional fees, and if Citi will not go under 40%, holding out for 35% with a collection agency may be the same amount of money as taking 40% of a smaller balance today.
Later settlements (after account charge off) may result in better than 90 day payment terms though.
I would target Home Depot the same.
40 percent with Citibank is a good offer.
Hi, i have a credit card account with Citibank. I stopped the last time I paid it was in September 2016. Today I received a letter offer to settle the account for 40% of the balance. I never contacted them, the just sent me the offer. I have other debts that are passed due as well. My credit is tanked. Should I accept this offer or is there a chance I can get them down to a lower amount.
thank you
You can get lower, but not by much (always worth the effort). My bigger concern would be whether or not you should settle with Citibank first if you have limited funds to work with, while have unpaid accounts with more aggressive creditors.
Who do you owe, how much, and how late are you on each account?
In 2009 I had three $12,000 accounts with citibank. Two were closed & sent to an attorney in Louisiana where i set up a payment agreement for $300 for one account. I will make the last payment if the $12,000 next month. Three years later they sent a payment agreement for the second account for $212.00 a month. A year after paying with no late payments the account was moved to an Alabama law firm which i have been sending both payments to for a year. Never being late. They have recentky sent letters that my payment was 2 days late and my account is in default. Once i recovered from my financial crises i have never been late. I mail my payment on the first of the month for a 15th due date. Why would they be difficult when im never late.
They processed the payment late; were careless with incoming mail and misplaced yours; The holiday mail slowed things down; USPS was careless. There are a number of ways this could have gotten messed up. I would call them and clear things up.
Many collection law firms have online payment options on their websites. This could prevent any additional payment issues.
Z&Z law firm returned my February payment and a letter stating that my account is in default & the agreement is no longer valid. I owe $9514.76.
Account was $12,000. My current monthly payment is $212 and cant pay more than $300 a month without dufficulty. My parents might loan me the money if i can get a settlement offer. How much would you charge to negoiate a settlment offer or a $300 month payment
Fill in the talk to Michael form in the right rail. I will email you to set up a time to talk on the phone and see if someone can help.
Everyone in the network charges 15% of savings. You pay the creditor first.
Hi,
How long after charge off were they sent to a settlement attorney? Did you attempt to settle before the attorney got involved
Hello, I am a small business owner. In the course of starting my business., I got behind on a Sears Account (Citi) and it was charged off. I am willing to settle the debt in full ($6,487) in exchange for having the account removed from my credit report. The charge off is hindering my ability to grow my business. I am told that the CITI internal recovery unit has the account and they have been very resistant to working with me on this matter. Can you help me?
You are talking about pay for delete, and that is just not common with credit card banks. Settling with Citi, whether paying in full, or getting them to agree to accept less, will update your credit to show a resolved derogatory. People still accomplish credit and finance goals with that on their credit.
Please define for me a resolved derogatory?
Meaning Paid but it still shows a charge off?
An account that went severely delinquent, and to the point of charge off, but was paid or settled fro less and now reflects a zero balance owed and resolved.
Check out this video about r-9 on credit reports for more detail.
Last month Citi offered 6K on my 14k balance for settlement. I had 4k at that time. And I called them this month (4 month past due) now they said it is 7K. Please advise what can be the best course of action. I can borrow more money but dont want to. Rep said that it can be charged off any time so I should make 200 dollar payment to stabilize the account.
The timing is a bit odd. Fill in the talk to Michael form in the right column. I will email you to set up a phone call when I see that. I want to dig into the details a bit more, and can also walk you through getting the better deal you are looking for.
I have a debt with Best Buy back when they do business with HSBC. I have checking account with Citibank. Can they settle off my checking account with Citi now that Citi has all those HSBC accounts?
Your concern is something I see more with credit unions than with national banks like Citi. How far behind on your Best Buy account are you?
Need help.Was involved in rear end collision Nov 23 2016. I was rear ended and have not had income since then. No disability or workman’s comp. I have kept payments up because of savings. I got TBI from the accident. Not sure when I can return back to work.
Are you only dealing with Citibank? What other accounts do you have that you are struggling with? What are the balances? List whether you are current or late, and if you are dealing with outside collection agencies.
I can help you target the best settlement savings. And you should compare that with your other debt relief options.
Hi Michael, I have 2 credit cards with capital one card with a balance of about 2k and a citi bank with a balance of 2200. I received a letter stating if they don’t receive a payment from me within 20 days they well send my debt to collections. Due to unforseen circumstances I can’t afford to make the $500 minimum payment on the account. What should I do?
How long until you can raise 40% of your Capital One balance, and 35% of your citibank?
Hello,
I was on a payment plan with citibank for my credit card since June 2015. Long story short – customer service did not set up the automatic payment with my new bank account information. My payment was due on Nov 15, 2016 & on Nov 20, 2016 they charged off card & sent it to collections. I called the collection agency & made my payment for November & December. On my credit report it says I failed to pay Nov & December. Is there anything I can do to get the charge off & failed to pay off of my credit report. I’ve never missed a payment & they charged off the card after 5 days & it was their error that the payment didn’t come out.
I am not sure what you have happening. The account would likely have gone 6 months without payment before the charge off occurred. They were likely never going to remove that fact. In my experience, the better outcome for your credit once you have an account go 90 days late would be to settle it for less with Citibank (or the collection agency they send it to), and get the zero balance reporting.
Hello Michael,
My name is James and I owe approximately $17k on my credit card with Citi. I will be leaving the US soon, and I would not be able to pay these cards due to unforeseen circumstances. What are the implications if I were to leave US with the credit cards unpaid.
Thanks in advance for your advise!
Your credit is harmed for about 7 years. Do you intend to come back to the US in the future?
Hi Michael, great site by the way, I have a question, I have been on a payment plan on a Citi credit card account with Capital Management and I got into that plan right away after the account charged off. Been paying since 2014 when I got out of cancer and I was thinking, what could happen if I stop paying for a few months to gather some money to offer a settlement on said account, the account is 15K and I pay $200.00 a month on the plan, what would you recommend?
How quickly can you pull together about 5k?
I have outstanding credit card balance of 16k with Citibank that has now been turned over to Debski & Associates for collections. I received a letter for collections from them in September. I did nor respond. I think they just filed a lawsuit against me. Should I call them and try to make a pay,ent plan or wait until I am served ?
Pull up the case in your county court and post a reply with who the named plaintiff is in the lawsuit. My suspicion is that you are being sued by a debt buyer like Portfolio Recovery, Midland Funding, or Calvary Portfolio. My feedback will change depending on who is suing.
Hello, I have an issue with Citibank. Back when the mortgage meltdown burnt everyone I defaulted and Citi started asking for their money. I paid on and off in the 1st year and after that I paid them monthly until the balance was paid off. I never received a statement but I did call them to find the balance from time to time. Now after paying them $41,288.89 they claim I still owe them when the original charge-off was $35,000. The corporation asking for payment has no listed address and are operating out of Canada. I have bank statements for all 65 payments made to them. How can I get them to stop this nonsense accounting problem they have. They recently sent a letter with no return address saying that Citi confirmed the debt to them but refuse to send the payment register. Help me..
What is the name of the debt collection agency you are dealing with? Have you called Citibank to confirm they placed the account for collection?
Global Credit and Collection and no, I’ve not called Citi. I guess that is a good idea. Any other suggestions ?
That is the first one. Any others would follow on the heels of that outcome.
I just settled with United Collection Bureau (Citi – Macys card – $3800 bal) 180+ past due, 50% settlement split in two payments within 2 months. Also settled a Citicard (hiltoncard – $4400 bal) for 35% settlement split into 4 months just at the 180 past due mark (sweet spot for settling). It is all possible if you call them and explain your hardship and intent to workout a deal.
Thanks Michael Bovee, your webpage has been very helpful for me. Still working on settling rest of my debts; I started in late Aug. this year, and I am in the path of settling about 25% of my total debt (about 60K) by February with settlement deals I have already made so far (still making payments).
Good afternoon: My Citibank debt was sold to Midland Consumer Credit, I paid it off just several months ago (July 2016) to Midland but can seem to get them to show the judgement has been satisfied with the local county courthouse here in Lee County Fl,.
Is this because they won’t acknowledge the judgement against myself because they purchased the debt or because they don’t have anything to do with the judgement.?
Any thoughts on how to have this judgement shown as “Satisfied” on the court docket or Credit reporting agency?
Many Thanks.
Peter Kramer
It can take 60 to 90 days for the court to be updated about a paid or satisfied judgment. Who is the law firm that handled it?
I received a default notice I paid the arrears owing as per request with default but in that time I missed my minimal payment I called Citibank and they told me they could extend the letter for me to give me time to pay the minimum payment what worries me tho is I spoke 5.30pm on 21st October and the letter ran out on 22nd oct so they lady advised that she could not guarantee that my request to extend time on letter would go through
So if it doesn’t what happens next they will see missing that monthly payment as defaulting on a default?
Is the next step letter of demand?
If u receive a letter of demand and don’t have the lump sum to pay can u do a payment plan?
What type of account is this with Citibank?
What is the required monthly payment, and what is the reduced payment you had that you are trying to extend?
For how long had Citibank been accepting the reduced payments?
Hi Michael
i have about $6700 in crediti card debt between 3 credit cards from CITIBANK.
I have never had credit cards before and never realized that I had to give more than the minimum due to pay off debt. Now I just realized on one card i have a credit card debt of three thousand, however
The statement I just received says 3200?
So I am scared because I am on disability and can only make 1130 a month extra and I am living on my last paycheck right now and currently out of work… I pay my credit card fees always on time for about 2 years now out of my disability payment.. What do i now? Can I get the interest rate lowered?
I live in san francisco and looked at the Hebrew Loan website however to qualify for a loan I need to have a guarantor who lives in northern califonia and who is Jewish that is pretty tough for me .
So where can I get help??
Thanks
Patti.
What are your interest rates on each account?
my friend wanted to settle his credit card account, the problem is he doesn’t remember his account number and he has no idea what to do?
Who is the creditor? How long ago did he stop payment?
If it were me I would call the original creditor and have them look up my account via social security number. They can then tell me if they still have the account internal, or if it is out with a collector, who that is and how to contact them.
You can also find out who to deal with from any negative listing on the credit reports.
I have a video up about how to find the debt collector you owe that is helpful.
I am very concerned…my dad has 3 acct with City…ok, My dad has dementia and has no idea what is even going on. I have tried explaining this to Cities and they refuse to talk to me about any of it…I am worried cause I have tried to take care of this, but cannot because they won’t talk to me…I need help
Fill in the talk to Michael box in the right column so we can email each other and set up a time to talk on the phone.
I got a Settlement agreement with Citi Bank by Mail. The debt was around 9k and they offered to settle for around 4K which was acceptable. I was prepared to make a lump sum payment within 1-2 days. However, They refused to give me a letter prior to payment. They said it would be reported as 0 Balance, Paid less than total amount owed. I told them I couldn’t do this. I spoke to several different people there just to make sure. What do you do if they refuse to send a settlement letter or document Pain In Full?
Citibank is typically good about sending out settlement agreements in writing in enough time for you to pay. But you will not get them to say paid in full if you paid for less. There is no reason to get hung up on how a paid collection shows as paid for less or paid in full. It means little. It is the zero balance you want, and that they do update the credit bureaus with.
Are you dealing with Citibank or a collection agency that sent you an offer letter?
Hi I have a quick question regarding potential debt lawsuits by legal debt collection firms. I’ve received a 30 days to verify letter from a law firm representing another law firm that bought the debt from Citi.
If both law firms are not from my state, does that either negate or significantly decrease the chance of facing an actual lawsuit?
Thank you
It can sometimes suggest the suit is still a ways off, or that there may not even be one filed. But that is getting more rare.
Who are the firms involved in trying to collect from you?
What state are you in?
There are many collection law firms that have offices in multiple states.
Hey Michael, Thanks for responding so quickly.
Taurus law group, MA is representing Crown Asset Management, GA, who apparently bought the debt from Citi.
On their website, they claim they do not operate collections on their own but outsource all collections, which I suppose is Taurus’ role in this case.
https://www.crownasset.com/index.php/crown-asset-management/collections
I’m based in California.
I know there is likely no lawsuit yet because the 30 days is not up yet and I intend to verify and dispute.
What is your ultimate goal to resolve the situation?
I want to let it expire, which theres about 1.5-2 years left on the clock.
That may not be possible without first having to beat back a lawsuit.
Do you mean, you don’t think I can make it the 1.5-2 years without a lawsuit attempt at the pace that they’re going now? Are you familiar with these two companies? Are they suing the majority of cases they take on?
I cannot say whether or not you will be sued. But the risk of that happening before the debt goes out of statute to be sued is real. I am familiar with Crown Asset. I do not see Taurus Law Group come up much. If you do hear from an in state collection attorney you will know that the risks of being sued have escalated tremendously.
If served by Crown Assset and lawyer from Cambeca Law in Massachusetts can you settle before going to court?
What is best way to proceed? Citibank card from Best Buy with balance of $1745
You can settle with Cambece Law for 50% or less when you have not been sued, and often 50% or more after a lawsuit is filed. Are you prepared to pay what you are able to negotiate in a lump sum?
Have been served summons? Likely could put together 50% in 30 days
What I meant was I have been served a summons and have 20 days to respond to complaint to Crown/Cambeca — do I reach out to them about a reduced settlement at this point?
You can reach out now in order to reach a settlement. My experience is that you can often get a better outcome by starting off with defending a collection lawsuit though.
So let them proceed with a court date after summons and then try to settle or actually go to court?
File an answer and defend the suit to start. It would be a good idea to connect with an experienced debt collection defense attorney in your state. You are in Massachusetts right? Shall I email you a list with the experience you need?
I am currently being sued by Amex for $13, 500.00, Modlin and associates, although the attorney is not listed with them. Just received summons for my Citibank account from Debinski and associates for $9500.00. I do have an attorney who will be representing be for both cases. Just wondering what i might expect for settlement?
I also have an outstanding account with care credit at $9800.00, Walmart Mastercard at 2800.00. I settled my chase accounts at about 35%.
Also, I am attempting to settle my husbands Chase account $16500 but so far no luck.
any advice would be greatly appreciated.
How prepared are you to pay 50 percent settlements on the lawsuits, and still fund another settlement on the remaining Chase account?
I have saved up 50% for the 3 lawsuits but that would deplete my funds for a while.
The chase account recently was sold to National Credit and just got notice that my husbands Citibank account was sold to Midland.
Also I have not received the summons but Amex file in small claims for $3100.00.
If i have an attorney represent me will i have a better outcome?
Give me a call to go over your options on the Citibank account that Midland Credit now has, and we can cover the Chase account too. you can reach me at 800-939-8357, ext 2, or fill in the “Talk to Michael” form in the right rail.
I can give you a clear view of how to optimize your AMEX results too.
Hi Michael,
I had a Synchrony Bank/Walmart card, balance 2500.00, I asked for verification and Midland sent a letter back asking why i was disputing and enclosed a statement from March in the return letter. I called Midland to see if we could settle and they stated my account was no longer there it is now with Atlantic Credit Finance, does this mean my account was sold? what sort of settlement would i expect?
Should i call them or wait for a letter and then validate?
I target settlement with Atlantic Credit or Midland (same parent company) differently depending on someones circumstances. We spoke at length last week, and with that I would target between 35 and as high as 60 percent.
Why are you sending disputes and debt validation requests? That is not only not effective, it is a good way to put yourself in the front of the line to be sued these days. See this post for more on how debt validation and disputes work to increase risks.
If your goal is to settle there is little reason to wait. And because I know your situation, stop sending letters out.
ok thanks Michael, i actually did that before i knew better.
Hi,
We have a Citibank lien on our MA property from 2011 (credit card debt). Does Citibank still own this debt or does Lustig Glaser and Wilson (Citibank agent per the court judgement)? We would prefer to work directly with CIti. Thanks
Do you have a copy of the original lawsuit? Who is the named plaintiff? That will tell you if Citibank sold it. You can also call Citibank directly and ask them if they sold it. Let me know what you find out.
HI Michael,
Thank you for providing your expertise and advise to those of us in a tight spot.
Years ago, my husband maxed out 3 credit cards while starting a side business. When the credit crunch hit, we owed Citibank $59K, US Bank $7K, and BofA $17K on the 3 accounts used for this side business. We also had other credit cards for our household that were manageable with my husband’s income, but the side business accounts became a drain every month, to the point where I simply stopped paying them, and focused on the household accounts that I could manage. While maybe not the best strategy in retrospect, I was looking to prevent a complete meltdown of our finances.
We were able to arrange for a 0% hardship plan for 2 of the side business accounts — $924 per month to Citibank and $125 per month US Bank. Bank of America would not play ball, so I ignored them until they sent the account to collections (Northstar Location Services). While Northstar could not (would not?) agree to a payment plan, I would make short term agreements with them for 3 months at a time to establish my own payment plan. I set up a separate checking account for them to draft their payments and not harm our household finances.
We were able to pay these arrangements for 2 years, when my husband lost his job and his subsequent severance had depleted. The balances were paid down to Citibank $27K, US Bank $3,600, and BofA $3,000. I should say that US Bank was definitely the most understanding of our situation and willing to allow us to continue the 0% hardship plan. Citibank went into settlement mode, but we had no lump sum to offer. And Northstar (for BofA) went into slight panic trying to convince me that BofA would recall the account if I didn’t settle with them. My response was I would have the same answer for BofA as I do with Northstar…you either accept the payment I can afford right now, or I will send the payment to US Bank. BofA did eventually recall the account and had no problem accepting whatever I could afford each month. I basically ignored Citibank and the $27K balance.
US Bank and BofA were paid in full. Citibank was sent to United Recovery Systems in June 2014. I attempted a payment plan but they seemed unreasonable asking for a lump sum of the now $28K owed. In March 2015 the account was moved to ARS National Services Inc. And in April 2015, the account was moved to Global Credit Collections Corp.
I assume because this is the third agency to contact us that the debt has been sold. Are you familiar with any of these companies to know if the account is still with Citibank or has been sold? The letters we receive from Global Credit & Collection Corp state that we can set up a payment plan and mail payments made payable to “Citi” There is also a note at the bottom speaking to discharge of debt and it’s tax implications. Is this wishful thinking that Citibank could still hold this debt?? I am afraid to call them and “wake them up” because we are not quite ready to start paying them, and I would like to stay under the radar as long as possible. Our last payment to Citibank was 01/27/2014, so we have not passed the SOL in CA.
What would be your advice as the next step? We have had very limited communication with Global Credit — we visited their website, but have had no conversations with any representatives. My husband’s side business grew to become his full-time employment, so as we pay off our smaller household balances, I foresee being able to make large payments once again to Citibank to pay in full…if they can just hold off any legal action for a little while longer.
Thank you in advance for your help!
Sheri
.
Citibank still owns the account based on what you shared. Can you pull together 8k to settle the old Citi card?
Paying in full at this point does not serve much purpose.
At this time we do not have $8K to offer them….perhaps this will change towards the end of the year. (The current letter is offering $8,985.85 to settle $28,485.85) I am in the process of paying off current debt and then can roll the combined payments to Citi. I understand your point about full payment not serving much purpose — I have an internal debate all the time “settlement vs. payoff”and the emotions of payoff always seem to win in my head.
Let’s connect on the phone Sheri. I have talked with thousands of people and helped them overcome that perceived ethics of settling for less battle. I can give you some tips on getting something set up with Global Credit and Collection too.
Email me a day and some times that are good for you to talk. My address is the same one you get these comment notifications from.
I need urgent advice. a few years ago the company I worked for liquidated. I was heavily pregnant at the time and it took 9 months to be paid my entitlements….everything has just gone down hill from there. We managed to have no defaults listed, until recently. I had my Citibank credit card on a payment arrangement, which has been tough financially. This week we applied through a broker for a refinance on our home loan to clear some of our debt, giving us a little breathing space, but we were declined, Apparently Citibank have recently listed a default on my account.. I started a new job in Jan, monthly pay. They forgot to pay me and I missed a payment. When I rang Citibank in feb they sent letter/s. I advised them I did not received them and request copies be resent, which they claimed they could not resend them. They accepted the new payment arrangement and I B’pay in Mar, but apparently this payment was received 1 business day late. However, they did call me and offered me a reduced interest rate from 20% to 8% and reduced monthly payments from $550 to $360,,,,,,,,,,,,,,,can they have listed a default…..do I have options, I need to refinance in fear of not being able to keep up financially. I look at my little boy and just want to cry. I have requested a copy of my credit report from veda
It sounds like you have one 30 day late pay and that is it. I am not sure that is the only reason you were declined. It could be just really bad timing of your late pay showing up as so recent at the same time your loan application was being processed. If that is the case you can reapply in a few months time.
Make sure Citibank is reages your account. Ask them if they are.
Are there other negative reports in the last 24 months?
Hi,
Thanks for taking my call the other night(4/8 @ 7PM). I have $28k balance with Citicard. Citi has given my account to a collection agency. During the phone call with an agent I offered $6500, he came back with a settlement of just over $16k to settle. How would you suggest I proceed? I can not afford to pay $16k. I offered $6500
How to, and the targets for, negotiating your Citibank settlement will vary depending on whether you are dealing with the bank, a collection agency, a debt buyer, or an attorney. The amount you can save settling by settling for less with Citibank can also vary by how long ago it was you last made a payment.
Who is the debt collection agency?
When did you last make a regular payment to Citi (where you were not already late with prior payments)?
United Collection is the agency. September 2015 was the last regular payment to Citi.
Sorry about that the last regular payment was July 2015. I made partial payments in Aug. and Sept. 2015
I am going through the same thing. I was going through divorce and had a Citibank/Sears credit card. I was told to make a $500.00 pmt and they would work out a payment plan. 2 wks later I receive a judgement against me. This is in 2010. Now that Im trying to buy a house it has to be settled. They offered me a settlement of $1800 but at the time I didnt think the debt was mine, I thought it was already settled. After months of searching I realized it was mine. The bill when it went to collections was $5800 then with all the interest it went to $7700. With my $500 payment it dropped to $7200 So I called to resolve the debt and they told me they wouldnt take any less than $4600 since after the judgement it is now up to $9200…So now theyll only take 50%?
Who is the plaintiff on the judgment (want to know if you are dealing with a debt buyer)?
Who is the law firm collecting?
Has your credit been run by the loan officer or mortgage broker?
Hi Michael, Just a quick question… I had a $72k home equity line of credit through Citi that was tied to a foreclosed home in CA. Being ignorant first time buyers, we accepted an attorney’s advice ‘not to worry about it, as CA has protections against being sued by a 2nd mortgage holder’ (which is does). However, we’ve had the charge off on our credit for about 5 years now (CA statute of limitations is 4 years), so we aren’t worried about being sued. HOWEVER… the issue IS causing a problem with my job (I’ll leave out details) and now I’m being advised to settle the debt (or pay in full).
My question is… this long after the fact, how do I even approach reaching out to Citi, in an attempt to square this away? Do you think that they will be more receptive to a settlement, considering that it has been so long (2010ish) and they’ve gotten nothing for that span of time?
Thanks in advance for ANY insight. I just terrified because I HAVE to square this away (lose my job and I’m in serious trouble) yet am leery that contact may reset the statute of limitations, then I have to worry all over again about being sued for the balance, penalties, interest, legal fees…
Thanks again!
I am going to encourage you to call me for a consult so I can dig into details that will allow me to give better feedback. You can reach me at 800-939-8357, option 2 rings to me. If you subscribed to these comments via email, you can also email that address (it is mine).
5 years ago I cancelled my account with Citi Professional Cards due to their inability to credit my checks to my balance due for three months in a row.. They then declared the account late and started charging me all kinds of late fees. I asked for a final statement to pay it off somewhere in the vicinity of $2800 but never received one. They then just kept adding late charges until they ran it up to $13,000 +. I contacted them to get it straightened out and all they did was yell at me and tell me to pay my debts.
I wrote a letter to the head of professional cards RRR and never got a response until they sent me a stack of statements with no charges just late charges still over $13,000.. I have been served with a court order to represent the debt- now at $8300 five years later. I know I don’t owe that much because I cancelled the card and was going to send them a final bill if they sent me a statement which never came.
What state are you in?
Who is the named plaintiff in the lawsuit against you (want to know if a debt buyer is suing)?
What collection law firm is suing?
How long would it take you to raise, say half the amount they are suing for?
Hi Michael:
I’m in a “world of hurt” and currently have credit card debt that is beyond my abilities to pay in full anytime in the near future. I owe $7300 on a Citi Credit Card. I called them for the first time and looks like my account will be 6 months past due next week. The person I talked to told me to at least send in a $55 payment to “hold my account” then after the payment I could talk to the “payment department” to set up a payment plan. Should I send in the payment or try to settle with them or third parties after charge off?
How prepared are you to pay any settlement you negotiate with Citibank? Can you pay a lump sum settlement if it were a third-ish of what you owe? Do you need payment terms to pay an accepted offer?
What other debts in collection do you have to contend with?
I have enough for a lump sum, I would like to settle for less than 50% since I’m saving for when it’s time to negotiate other cards with other banks.
I would skip the small payment for Citibank to hold off from charge off and collection agency placement if it were me. I would look to settle with Citi at 30 to 40 percent now, or with the first collection company that gets it.
Thank You Michael,
I called and offered $2000 they countered exactly 40% of the value. They gave me 4 days to get the additional $923.19. I still have a bunch of credit cards to settle in the near future. I’m going to call on Dec.5th (3rd day) to offer $2480. Or should I just pay what they are asking for, rather than risk losing the offer?
I would try the counter offer direct to Citibank’s recovery department first and see if you can get that approved. Let me know hoe that goes.
Ok some data from my case, today was 1 day before the (40% settlement) offer expired. I called in, they told me they are the “Payment Arrangement”, (spoke to different person didn’t transfer me to anyone else). I offered the $2480, she said they couldn’t accept anything lower than the $2,923.19 offered. I’m currently at 154 days past due. I’m going to risk it and call again at 170 days past due and see if they will budge.
****CORRECTION*** Today IS the last day to accept the 4 day offer.
Hi, I missed four payments with CitiBank due to a medical situation and now they closed my account and referred it to a collection agency. My balance is $14,000, with $2,200 past due. I called the agency rep who offered me a couple of options: 1) a 50% lump sum settlement of $7,000, which is out of my budget. 2) A plan which would have me pay the past due amount of $2,200 by the end of this month, and then about $320 a month until the remaining balance is paid off. I told her I need to examine my records and budget but agreed to immediately pay $1,100 and call back tomorrow with a decision. My question: do you think they would accept a payment plan of $2,200 this month, and the remaining $4800 in another 30 days? I’m motivated to settle it, and be gone with it, as opposed to paying $330 a month til the next ice age. Thank you for your time and service to the community.
Who is the collector for Citibank?
When did you last make a payment to Citi?
Depending on the answers you post, I think you can get a better settlement.
Mike,
UCB asked me to write a hardship letter for them to submit to Citibank which I did. After a week I called back and they told me it was rejected but a counter offer was made that was 35% of the balance owed. I called Citi the same day and they said a letter was never received and I could submit it directly to them. Today I call Citi and they tell me to deal directly with UCB. Should I try and renegotiate and apparently they never forwarded the letter or just settle at the 35%?
Thanks,
Dave
That may be as good as it gets with United Collections Bureau. If you have the resources to work with, taking the deal would be a relief, and remove any risk the account is next placed with a debt collector that is less flexible.
This will be the first one of four that I settle. Absolutely I should have a letter that this states paid in full or something of that sort correct? You have no idea how much this site has helped me and I greatly appreciate it.
I like to get everything documented before remitting payment.
Dear Michael. I am in Asia. When I was a student in the US more than 23 years ago, I applied and used a Citibank Master card. When I finished my studies, I returned home but I know I had some unpaid balance in the card. I remember getting a letter from them (or maybe a debt collector) shortly after about my missing payment, but after that I did not hear anything until today. If I remember correctly, my unpaid balance is not really much (maybe few hundreds dollars). Now I want to pay them back the unpaid balance. Hopefully they do not impose an interest for the unpaid balance. What do I do to pay back the unpaid balance? Will Citibank impose an interest?
Did you hear from someone about the debt, or are you being proactive?
After this long it would not surprise me if Citibank did not have the account, or even the ability to locate it. Unless you were sued for this debt, there is really nothing about it that will impair your credit and financing options.
I would do nothing about the debt unless you learn you were illegitimately sued after you went back home.
Actually no one is chasing me for this debt. After all this while, they may have lost my record or they are not interested anymore. I don’t know. It is my choice to pay them back but I am not sure
how. It has been a while.
I have helped people with similar goals Yuan. Can we connect on the phone for a consult? You can reach me at 800-939-8357, choose option 2.
Hi Michael,
I have an outstanding charged off debt with Citi for over 7,000, there have been several collection letters which have gone unanswered but recently I received two thick packages of ALL of my credit card statements from the Citi card. I don’t know what that means or even if its a normal thing but it seemed like a scare tactic since all it did was confuse me why they would send such a huge pile of paper to me. Is this simply a harmless scare tactic or are they preparing for a lawsuit? I don’t believe I received any lawsuit notices…
Also, since this Citi card is my largest liability out of my charged off cards, should I request validation and see if I can get it removed?
Thanks.
Those large envelopes of Citibank credit card statements are usually sent to someone who already requested debt validation, or as part of discovery in an active lawsuit.
Check your local court records to see if there is a suit filed against you that you did not know about. Let me know what you find.
If you have never requested debt validation from Citibank, what would be your purpose for doing so now? It will not help you get it removed from your credit reports, or from the courts if there is already a case filed.
How long ago did you last make a payment on the Citibank account?
What state are you in?
Im in California
Last made payment around late 2012.
I did not get any notices about lawsuits and I know they have been sending some things recently so Im assuming I would’ve gotten the lawsuit notices if there was one pending so I assume it was a debt validation and I think I did send out a debt validation when I received a collection letter. If they sent the statements as a response to my request for validation, does that mean I am obligated to respond to them automatically or do they need to send another collection letter to notice me?
If they are serious about sending the huge pile, does that mean they are getting ready to take more serious action against me? Should I try to settle before they go the next step (if they even are)?
They sent you way more than is typically necessary in order to meet the very low standard for debt validation. In my opinion and experience, with Citibank having responded to your debt validation request in they way that they have, you now have an increased likelihood that you are sued. You can read more about why I say this in this article about sending debt validation letters.
You can respond to Citibank if you like, but what is your goal in doing so?
Citibank is likely thinking (and rightly) that they met their debt validation obligation, and I would be surprised in continued collections did not continue from here.
If you are motivated to settle, what you can you afford to pay on a percentage basis?
Out of a 7600 debt balance, I cannot really pay more than 35-40%. I’m hoping to get 30% or less would be great. What would you recommend as a strategy to get it as low as possible? This is my only other high balance debt account, the rest are smaller in value so easier to deal with.
Called CITI Recovery department today:
Balance : $7618.04
1st offer : $1500
1st counter : $6,94.43
2nd offer : $1905.51
2nd count r: $4570.82
3rd offer : $2,000 (26.25% of balance)
3rd offer (FINAL) : 3,800
Its too much, I did not accept it, I would’ve accepted $3,000 probably.
On the phone, they were inputting my offers and receiving automatic counter offers on the computer.
I suppose it would be better to deal with a debt collection company since they buy the debt at a cheaper rate and would have more authority to get me lower than what CITI offered. Though I’m confused why have I been receiving debt collection letters from 3rd party debt collectors but CITI is also willing to negotiate with me directly?
There are times where working with a debt buyer will yield a better settlement outcome than when settling direct with Citibank, but there are times settling directly with Citibank, or a debt collection agency working for them is better.
At 50% I would likely hold out too.
Why Citi is wiling to conduct the negotiations internally when they have your account placed is a bit odd, but not unheard of.
Michael, I called United Collections Bureau afterwards to see if I could work out a better deal with them and they told me Citi took the account back so I have to deal with them directly.
Do you think I could ever get a settlement for $3,000 for $7,600 for a deletion of the account from my credit reporting agency? After all, the only reason I’m doing all of this is to begin rebuilding my credit as soon as possible. I suppose if they allowed deletion, I would try to get the money together to meet their offer at $3,800.
Here again (similar to the other accounts you are settling), you have a zero percent chance of getting Citibank to agree to what many call pay for delete.
Hi Michael,
I just received a letter from Citi saying Citi sold a specific debt to Crown Asset Management. This debt is supposedly almost 2 years old. Is this a normal occurrence? Should I expect legal action from Crown? What kinds of settlements have you heard about getting with Crown? Thanks
Citibank does sell unpaid debts. It is a normal occurrence.
I would call Crown Asset Management and negotiate a settlement targeting between 30 and 50 percent. Your success can depend on how collectable they see you.
Thanks for that advice but I can’t reasonably pay it right now. I know there is some law in California that states the creditors can’t sue after 4 years from your last payment. If Crown purchased debt from Citi, does that 4 years renew or is it still counting from the last date of payment made? What are the chances that they might take legal action in the remaining 2 years of the 4?
The 4 year SOL to sue for unpaid debt in California starts with when you last paid. The account being placed with Crown Asset does not reset that.
Being sued on unpaid debt is one of the common risks. I cannot say whether or not you will be sued on this account in the next 2 years. It is a good idea to save up and negotiate a settlement to eliminate that risk. I understand when that is not always possible.
Thanks Mike,
Is Crown Asset usually considered one of the more aggressive companies when it comes to debt collection and legal strategies?
I do not find them to be.
Hi Michael
I went to the bank twice and got pre-approved for a mortgage and then pre-approved for a secured line of credit for land only. This approval was based on my Equifax report and said I had an A rating. We didn’t go through with any purchasing of property. Four months later I went back to the bank to apply for a different line of credit to build a basement. When my banker submitted for approval it came back declined. I still had an A rating however this time it went through Transunion. Five years ago I had a Citibank M/C. I don’t have exact figures but I owed approx. $5000, I offered them approx. $3500 to close the account. They verbally accepted the offer but also stated that it may be a problem if I try to apply for credit in the future. It has been almost 5 years and I have never been contacted or persued by a collection agency. I called Citibank for information on my account but they said they have nothing on record and told me to contact the collection agency. Other than the info from the bank how am I supposed to know who to call if Citibank has no records? Do I call Transunion and see what is up? If so do I make them an offer? I’m not really sure where to go from here or what I should be doing. I hope this all makes sense to you. Thank you for your time and advise.
Who was the collection agency involved in accepting your payment of $3,500.00? Did Citibank refer to a different collection agency in your recent call to them?
Hello. Does anyone know the name/title and mailing address of Citicard’s settlement department or default accounts?
thanks.
Most banks refer to those areas as either their collections or recovery departments. I am not a fan of sending letters in an effort to resolve debts. Different types of letters people send Citibank can lead to a legal review of your file. That is something most people should stay away from. What is your goal with your Citibank?
The general correspondence address is likely sufficient for the purposes of sending a settlement offer or letter to Citibank:
Citibank Customer Service
P.O. Box 6500
Sioux Falls, SD 57117
Michael,
I have been searching for information on debt settlement issues and questions. You have been so informative and helpful to those writing to you. I hope you can help me as well.
My financial hardship started end of November 2014 when my life partner stopped financially contributing. I am retired and live on fixed income of social security and pension.
I was unable to keep up with my credit card payments and began negotiating in good faith on settling credit card debt with four credit card companies: Citi, Chase, Discover and Bank of America. I was able to reach lump sump credit card settlements with Chase, Discover and Bank of America but not Citi.
I have (had) two past due credit card accounts with Citi. One is in the amount of $7,300.00 and the other $1,058.00. I have been negotiating in good faith on trying to reach a lump sum settlement on both accounts since end of November 2014 .
Back in May 2015, I offered Citi on the $7,300.00 account $1,500.00 that I was able to loan from a family member but they were only willing to settle for $2,931.00 which I was unable to accept. Similarly, I offered $300.00 on the $1,058.00 account with counter offer from Citi for $635.00 that I was unable accept.
Now both of my Citi accounts have been sold to two different Collection Agencies. I was never notified by Citi about this despite my regular monthly calls to them attempting to settle the accounts.
1. $7,300.00 Citi account
On July 24, 2015 when I called Citi about this account, I was told it is no longer with Citi and that it was sold to Atlantic Credit and Finance and is no longer owned by Citi. Subsequently, I received a letter from Atlantic Credit and Finance stating that “ACF has purchased or otherwise assigned (the “Account”) and it has been placed with Atlantic Credit and Finance, Inc. (“Atlantic”) for collection. I just wrote to Atlantic requesting a validation of debt.
My questions are: what are the steps after response from Atlantic and how do I go about settling the debt with them?
2. $1,058.00 Citi account
Today I called Citi about this account, I was told it is 160 days delinquent. The Recovery department informed me that this account was sold to Affinity Global to collect on behalf of Citi. I never received anything in writing and the representative I spoke said that from legal perspective Citi does not have to write or inform me about it. What are my next steps to resolve and settle this account.
Thank you in advance for your help.
You are going to have to try to come up with additional money to negotiate and settle the accounts. You are still looking at roughly 4k to settle the larger Citibank account balance that was sold to Atlantic Credit and Finance. There are lower settlement deals that can be negotiated with Atlantic, but I do not have enough info about your situation to suggest you target that as realistic.
I am not sure why you sent a debt validation request. You already verified through Citibank that they sold your account to Atlantic Credit & Finance. The barrier for Atlantic Credit to validate your debt is so low they can trip over it. Your request can sometimes backfire and lead to legal collection placement. Let me know what happens with this next, and then I can offer feedback about negotiating with them. You are welcome to call in for a consult too.
A realistic target for settling smaller balance accounts is often going to be 50%. You may be able to target less than that with Affinity Global. You will need to call Affinity to negotiate. Debt collectors do not often offer their best settlement deals when they first get the accounts, though there are exceptions to that.
There is nothing currently requiring Citibank to notice you of any debt sale.
Thank you, Michael.
What is the phone number to call in so I can give you more information?
You can reach me at 800-939-8357, choose option 2. If you get voicemail be sure to leave a message so I know to return the call.
Michael,
I stumbled across your web site after falling behind on my credit card payments and seeking some guidance as to how I should handle the situation if I can not pay my card bills on time.
First of all, I want to thank you for the great resource you are providing to people going thru’ a tough time and put into bad situations for good or bad reasons. Quite generous of you — so thank you for the services/free resources.
I had never missed credit card payments in my life until April of this year. I have had excellent credit history and had access to 0% offers from Citi, BofA and other cards for a long time. I have borrowed and repaid those in the past and I have been a good citizen of theirs until now. I live a relatively simple lifestyle and the only reason I had borrowed from these cards was to make investments.
Unfortunately, my levered investments have gone against me (I have lost my personal money and the borrowed money) and currently I have been out of work for over 4 months now.
I am more or less insolvent and I do not have any assets — the decision for me is to decide between: to settling with the card companies using funds from family members versus filing for bankruptcy. Currently/Still I do not have a job and there is nothing positive on the horizon (on the professional job front).
I have over $100K in total credit card debt ( lost in investment losses)– mostly with BofA and Citi.
1) After 4 missed payments Citi has moved my account to GC Services and they have offered to settle the card at over 35% — during the first call from them . I assume GC is a debt collection company working for Citi? Is there anything I should be aware of in terms of your experiences with them. I have offered to settle for around 25%. I assume it will stay with GC for a couple of months?
2) I am 3 payments behind and given that I have been keeping the them posted about my situation BofA has offered and is willing to settle for around 28% currently. However, that is still large sum for me and I am hoping I can settle for around 20%. The cards are with FIA card services/collection dept. currently. When do they send to outside collection agencies usually? I have already indicated my situation and made them an offer that I can settle at around 22% range by borrowing from family rather than filing for Bankruptcy…). What is the trade-off for BofA: in settling with me at these 22% versus selling it to other parties (If they know I am insolvent with no assets — I assume they will be reasonable and consider my sincere offer)? Do I risk any backfiring? Although, both the card company reps have been extremely sensitive to my bad situation and very reasonable in their conversations.
3) Given my bad life situation (and the fact that I am more or less insolvent with no/limited assets and large debt with a very clean history with the credit companies for 15+ years; — I am hoping that I can settle for less than 25% in both the cards. I assume that is reasonable based on my situation and some of the settlement trends I am seeing currently?
4) I could not locate sample copies of debt settlement letters anywhere (that you talk about in this discussion link/video — about getting the debt settlement letters. Do you mind guiding me to any sample letters that you have on the web site.
https://consumerrecoverynetwork.com/debt-settlement-letters-agreements/
(I could not find any sample letters with this article link)
5) I assume there are no liabilities afterwards once I settle this with their collection company or directly? Can they come back to me after few years and say, you settled your debt partially but now you have a job and income — so you should pay us the remaining amt? I guess, I just want to make sure I am safe and protected in future 100% — by settling with them this route versus a bankruptcy?
6) I assume it is okay to pay directly, after I have the letter, from a bank account (via direct bank transfer) versus mailing them a check?
Thanks so much in advance. Any brief responses you can provide (if you have any additional thoughts on above questions) would be appreciated. Or anything else that can help the discussions/my case in settling in favorable manner versus going the bankruptcy route.
GC Services regularly collects unpaid Citibank credit cards. 25% settlements through GC Services when the Citi account is only recently delinquent is not that common, but you do have some things going for you that could sway toward getting a deal closer to that. Yes, GC Services should have your account for at least a couple of months time.
BofA settlements at 28% are not that common any more, and especially with FIA card services. You do indeed have risks when holding out for lower offers getting approved. The debts being sold off to someone who will sue, or FIA suing. Given trends today, I would want to avoid those risks if possible. Here is an active page about settling with BofA and FIA.
Settling for less than 25% is rarely a realistic expectation these days. You do have some things going for you that enable the possibility, but those types of deals are not a gimme. You have done well conveying your situation to get to where you have the lower offers from BofA only a few months in, and Citibank kicking your accounts to GC Services early is a good sign. Keep up the good work and who knows what you can get done. There are exceptions to some of the hard floors for collections.
I have a page up with links to settlement letter examples. You can see I quit loading images of settlement letters years ago. Those examples are still instructive, and the page where I post an outline of what to look for in the agreements you negotiate is something you have already found.
There would be no later liability for the debts once you negotiate and pay the settlements. Be sure to keep the written agreement and access to proof of payment. Errors and mistakes can occur, but will be easily remedied with the documentation. I should point out that there can be a tax implication from settling debtsif you cannot qualify for insolvency exclusions. Discharging these debts in a chapter 7 bankruptcy would not result in a tax and would be the least costly path by far.
I do prefer paying settlements via direct transfer from an open account rather than mailing in checks, but either method will work.
Why is it that you are more in favor of settling versus chapter 7? What finance goals do you have in the next 3 years?
Thanks for the response Michael.
Couple of weeks after I posted the comments above, I have worked with GC (Citi) and FIA card services CS reps (at the end of the month/August) to settle the debt and I have the settlement letters from them.
Those letters cover the items you have talked about in your articles. Thanks for the sample letter/link in your response. Those helped as well.
1) FIA customer service was very understanding all the way (given I had never missed a payment in 15+ years and only borrowed the money at 0% for investment purposes (no recent activity or misuse and no spending binge on my cards ever)).
They settled at 25% — that is the lowest their reps had authority to settle and I was happy to accept and move forward.
FIA sent me a very detailed settlement letter (with BofA letter head) with all the terms and conditions laid out very clearly.
The letter states that after I complete the settlement agreement (pay as planned in timely manner) — they will report to credit agencies and it should show up on my credit reports after 60 days or so — as a ‘settled account paid for less than full balance.” I ASSUME this is the final thing I should look for as the end result for me? And that is the best reporting outcome for me for this route.
2) GC came down a little bit — and I did not want to drag it to next month and hence I agreed to settle the Citi at 35% (this was the lower amt. debt — bulk of my debt was BofA; Citi was less than 25K).
GC has send me the debt settlement offer letter (with 2 monthly payments that I had requested for). indicating the terms and the fact that Citibank will consider this account settled if I agree to this, which I agreed with them after I saw the letter.
They have also told me that Citi and GC services will send me a formal letter that the account has been settled/paid after they receive the payments in timely manner and then report it accordingly as well to the credit agencies.
Per them — this is their standard settlement letter template when they settle the debt for Citi. I ASSUME this is good enough (as a proof) and it is okay to proceed.
Thanks again.
My score currently has dropped to around 510. Once the accounts are reported as settled, how soon can I expect things to bounce up — and to what range? I have read comments/articles from you that it could take up to 2 years for it to go back in the 700 range?
If/when I do get a job — I was hoping to replace my 15 year old car with a better used/new one. Would I have access to car financing from auto companies let’s say in 6-12 months or that is likely ruled out even if I have a job/if I do?
Thanks again for the your time and efforts. You seem to have a lot of empathy for others.
Best regards.
Your credit reports showing accounts as settled and no balance owed any longer is typical. There is nothing else to hold out, or aim for in that regard.
How soon your credit bounces back is not something I can answer without getting more specifics from you. It can depend on a host of things. Are the Citibank and BofA accounts you just resolved the only ones to have ever reported as a derogatory on your credit reports?
Based on current auto financing markets I do not see you having trouble getting a car loan after a few months of the settlements being updated on your credit. The rate is not going to be great, but auto loans can be a good credit rebuilding tool.
Congratulations on your settlements with GC Services and FIA!
Thanks. No I do not have any other delinquent accounts — had none in the past (I still have have an active chase card and one other card).
Although, I have not checked my credit reports since my job loss and the situation above — but I have only carried about 5 cards in last 20 years. And everything has always been clean until this year.
Good to know that I will have access to auto loans in a few months, if needed.
One more question — I still have access to chase credit card with over $20 K credit limit un-used (I use it to pay for occasional small purchases like meals and groceries etc. — will that credit be reduced if they see in future my other cards settled for less than full).
Thanks again.
I have seen Chase (similar to other credit card issuers) reduce credit limits on accounts that meet certain risk profiles. I have also seen instances where they do not. The fact that the credit limit with them has not been lowered this long after you stopped paying your Citibank and BofA cards suggests it may not happen. The periodic review of your credit reports is likely to have been completed at least once by now.
Hi Michael,
I have an overdue credit card balance for a couple of years with citi. I am trying to negotiate the repayment with them. Anyway I would like to get some advice from you on how to better negotiate with them. My initial principal was $11,600 which has snowballed to $23,200 due to interest and other charges. So I have been proposing for a 5 years repayment term from $7,700 up to $9,670 however they rejected and counter offer of $23,200 payable over 5 years or $15,500 lump sum settlement. What do you advice to further negotiate on the repayment amount?
Is it Citibank you are negotiating with or a third party debt collector?
Can your raise money to offer a lump sum settlement if it was a good bit lower than the 15.5? Settling for a lump sum is ideal with old unpaid debts.
I understand when payments are the only option, but it you are able to raise money to fund a more reasonable settlement with Citibank it could save you potentially more than $10,000.00.
Hi Michael,
Thank you for the reply. I am negotiating with Citibank directly. I have problem raising the fund in a short term for a lump sum settlement. How much lower do you think I could settle with Citi for lump sum payment? What other alternative do you suggest?
I generally target settling with Citibank at 5o percent on the high side, 40% as a middle target, and far less if the conditions are right.
There are reasons banks dig their heals in on settlement amounts. Those reasons can vary from how long you had the account open, account activity, how collectable you are viewed today, or whether you have a branded account.
I would be better able to suggest alternatives if I knew a great deal more about your situation and goals. You are welcome to call in for a consult at 800-939-8357, choose option 2.
I had three past due credit card accounts with Citibank. All three were debts incurred over the same period and all three were debts via credit card checks. These three accounts all “charged off” two months ago. Two (2) were sent (assigned not sold) to an outside collections firm (UCB). These accounts with balances of roughly $8k and $10k eventually settled for 25% after submitting a hardship letter for each account. This is an especially low amount due to an extreme hardship situation and a massive total credit card debt over $200k.
My third Citibank account (approx. $25k balance) is still held by Citi’s Internal Recovery Unit. Usually it is tough to get past their India call center that handles the Internal Recovery Unit, but a few times I have been connected to the Internal Recovery Settlements Department. They are always polite and explain that the way this works is that I offer a low amount and they offer a high amount and we work to the middle. Unfortunately, this is not the case. I started with 19% and they offered 50%, I raised my offer to 21% and they went to 60%, I raised my offer to 22.5% and they went to 70%. There is a 2-4 week waiting period between each settlement offer (per their requirements- but this time frame seems to vary). I just recently notified them that my other two Citibank accounts settled for 25% and offered this same amount on this 3rd Citibank account along with proof of the other settlements. They countered with a 75% settlement offer.
Quite a frustrating process. Citibank has not attempted to call me about this account since it was charged off. It has only been me calling them to try to settle. Its seems that this has been a mistake.
To your knowledge, am I correct in my assessment that the Citi Internal Recovery Settlements Department doesn’t really have any authority to work up settlements?
And, do you know of any way to get the account assigned or pulled to an outside collections firm?
Or are you aware of any department at Citibank that I can contact to try to get to a settlement since the Internal Recovery Settlement Department doesn’t seem to have the authority to make a settlement agreement?
Thanks
Something is going on with your last Citibank account Tom. I would encourage you to call me at 800-939-8357, choose option 2, and I can dig a little deeper into the situation.
I have a home covered by Homestead Law in Florida (worth about $200,000). I owe Citibank and Chase unsecured credit cards about $45,000. My savings have been drastically cut due to medical bills and I can no longer make my credit card payments.
My question is: if I don’t file bankruptcy, can they win a judgment and place a lien on my home here in Florida?. I am retired and concerned about a lien because I wish to leave my house to my child.
Thank you for your help.
It is possible to have a lien placed on homes in Florida. I do not know if the exemption survives probate, but you can ask an estate attorney in Florida to get the answer you need.
I do not know what, if anything, would prevent you from passing the house on to your heir right now.
You also have the ability to settle those credit cards at favorable discounts with both Citibank and Chase.
Why is it that you want to avoid chapter 7? If you want to talk about the issues off line you can call me at 800-939-8357, choose option 2.
Sorry for the long post, but I have so many questions that are numbered below that I need help with-
1) Should I settle a $50K Citi card balance that has now been sold to a debt collector back inj December? It’s odd that Citi has never reported this account to the credit bureaus -which is actually a good thing since it has now been charged off. The debt buyer is also not reporting this as a collection and they don’t appear to overly interested in this because they freely share that it is not being reported. 2) Could it be that they can’t report it since it was not originally reported by the original creditor?
They were harassing me daily for the first 30 days, now I may get a call once every two weeks. I took the liberty of calling to offer to settle at $10K and they agreed after a few calls. I have asked for a letter of offer to review but I am not certain what terms to ask within the letter since it is not currently being reported. Basically, it will state Paid, Satisfied in Full. 3) If I pay the settlement, can they tunaround and start reporting this as a collection on my credit? 4) Can Citi all of a sudden report a charge off? 5) Should I hold out a bit longer to see if the amount to settle is less than $10K? My main purpose for asking to settle is that I don’t want to risk a judgement or lawsuit considering the high balance.
That is a really good settlement on a Citibank card, even with a debt buyer. Look for the details in their written agreement to accept less than the balance owed that I cover in detail here: https://consumerrecoverynetwork.com/debt-settlement-letters-agreements/.
It is indeed possible for the account to show up on your credit reports after you settle. Maybe the fact Citibank never showed on your credit reports for the card is related to a system glitch? If that got fixed, your account could suddenly appear as a zero balance owed charge off.
The debt buyer could later report too. Who is it that owns the account?
Having a paid collection and/or a charge off credit card with Citibank is better than risking being sued, which I agree has a higher likelihood (the balance being high is one reason, your being in New Jersey is another).
Hello,
I need advice. I was delinquent with Citibank credit card due to financial hardship in the amount of $14K. The account was forwarded to UCB in 2014. With juggling of other bills including rental I was able to pay off $6K. Doing this caused tons of stress on my health and fell behind in rental. I am now current but still need to continue making payments to UCB. I try to negotiate a suitable figure each month but doing this I had to agree to $475 in March more than I can afford but found the money. UCB agreed to extend from April to July for $280. I know I will not be able to come up with any more than that monthly after July. I am so scared. The creditor at UCB kept telling me the full amount should have been paid off as soon as they received the account from Citibank. What should I do? I do not want to fall behind in my other bills, especially rental. I live in NY. Please, please help me.
What would happen if you made no payments to United Collection Bureau and instead saved every possible dollar you could over the course of, say 6 to 12 months? How much money do you think you could pull together in a 6 month period to offer as a settlement on the debt?
After paying on time for many years, Sears decided to cancel my Store card and also my Sears Citibank Master. I live at my parent’s home on a small income of only $493 a month from a divorce pension and at some point my other sources of income decreased causing me to become delinquent and forwarded to the debt collection agencies. The Offers started coming but I was still unable to pay.
After my Sears Citibank Master went to the collection agency Midland Funding LLC , as plaintiff, it was then transferred to Law Firm who served me with a Formal Complaint Summons Judgement. I knew the damage was already done, my credit would be screwed, I still didn’t have any money to pay and so I didn’t appear in court.
Shortly and recently, my ex-husband has died and now I am getting an extra $1588 from Social Security. I have since been able to agree and have paid to the Collection Agencies to settled my other outstanding debts. Sears Store $1062 – settled at $550, Chase $1404 – settled at $280, Amazon $366 – settled at $219. Student Loan $6,200 with a $50 monthly payment agreement (in which I plan to pay off as soon as possible).
But the Citibank Sears Mastercard re Midland Funding LLC as plaintiff and purchaser represented by the law firm Forster & Garbus. A default judgement has been filed against me and the law firm’s letter dated Feb 2, 2015 is asking for a full payment balance due of $1,966.07 and then I recently received another letter dated on Feb 19, 2015 now asking for $2,201.07 – which is a difference of $235.00 in less than a month.
What should I do about this Judgement and do you think I will still be able to get a settlement from this Law Firm or are they going to keep billing me at these crazy increase amounts.
I see accounts like yours, where there is fixed income and little expectation that will change, settle for 50 percent and sometimes less, even when there is a judgment in place.
If Foster and Garbus will not play ball with settling your Sears account, you may want to call Midland Funding directly and talk to them about it. They will not normally get in the way of a contracted collection attorney, but could get your financial condition recognized as one they publicly state they give a great deal of consideration for either reduced payoffs, or tag as not collectable. See Midland’s consumer pledge for more details before you call.
I made a payment arrangement w/Citi Bank in 2010. The arrangement I made was that they would draft my account $150.00 and drop the interest to 0.00%. I called to ask for a statement and they became very nasty towards me and transferred me to I guess India and I could not understand anything the person was saying to me. I think my account should be close to paid in full but I can’t get anywhere with them. What should I do?
Can you confirm that your payments are being made directly to Citibank, or was the deal you reached with a debt collector working for Citibank? Also, for how long have you been making the payments?
Michael
Thank you so much for providing valuable advice regarding credit card debt. My question is in regard to my deceased husbands credit card debt. He died several months ago and had two cards with approximately equal balances…about 15k on each. I notified each of them of his death. One of the cards had absolutely no connection to me and has been turned to DMC. The other card told me when I called, that I was an authorized user. They subsequently sent a letter requesting my social and date of birth to add me as primary. At about the same time, I went to an attorney to have my will revised and showed him the letter. He advised me that both were due the proceeds of my husbands estate after his primary creditors were paid. I paid off his car, funeral expenses, medical bills etc and have 6k left. DMC agreed to the amount. The other card has added me as primary and continues to seek payment. I’ve no idea whether I’m liable for the entire debt, over the 30 years we were married we have opened and closed many accounts. I have no debt except a small mortgage. I do have credit in my name and continue to pay the balance in full each month. Any advice you can provide would be greatly appreciated.
You were not obligated to taken on primary responsibility for the other credit card debt. Which banks are these that you are dealing with?
What does DMC stand for?
What state do you live in?
I live in Texas and the card that has been turned over to DCM Services was with Chase Bank. The other which has added me as primary and sole owner is a Citi card. T
I would run your entire scenario by an experienced consumer law debt collection specialist. The Citibank account is what troubles me. Being told you must fill out co-borrower, or primary account holder transfer paperwork, is what I would focus on.
The type of attorney I would send you contact info to get in touch with will usually offer a no cost initial consult. Post the name of a nearby larger city and I will email you one or more attorneys you can connect with.
I would do that before getting back in touch with DCM services. I would not pay the settlement offer from them until you have a game plan on the whole thing.
Thank you Michael for your guidance. San Antonio would be the nearest to me.
Thank you so much,
I will ask the lawyer to call to settle, not sure if he will though. If you can recommend a NC lawyer it would be great, I have no idea what one would charge for a job like this.
I checked the comps around my rental properties and it might bring in $30-$40K in equity, combined. The judgement is attached to my name and it comes up when you do the Title search.
Thanks again for your help, I will let you know what happens.
I sent you an email with contact info to the NC attorney.
Thank you Michael.
Yes, I earn a solid income now, credit is the same as 3 yers ago, haven’t defaulted on anything since then. I bought 3 rentals 10 years ago, Interest only so no equity. The ARM is up so now that Principal is required, I can’t afford to keep so I need to sell them all. Citi is probably attached to the properties with the judgement, I’d like to settle with them before I list the houses for sale. Maybe give them the $10K cash and have another $5K total for them go monthly, that I could do too.(I’d preffer a one time payment though) I have no money in a personal account, paycheck goes to a Business account set up by a lawyer (Maybe let him call to settle?) Home is in my wife’s name and i drive a leased car.
Thanks again! George
I would not suggest speaking to an additional 5 k of monthly payments in this situation. Any reference to monthly payments on judgment debts, or affordable payments that relate to monthly income, will cause a logical leap to “if you can afford monthly payments on a portion of the judgment, you can afford monthly payments toward all of the judgment”.
Have you verified property liens? Is there truly no equity?
It may be better to have the attorney you like negotiate on your behalf if the fees are affordable. I can also refer you to one I know in NC.
Hi Michael, I’m still waiting on your input please. Thanks!
Missed your reply somehow a couple weeks back. You will want to contact the attorney for Citibank. A realistic target for settling at this late stage of collection is usually 50% or higher, unless you can lay out some convincing hardships, or can communicate a take it or leave it position like a pro.
Convincing hardships are often accompanied by the inability to earn an income, whether short or long term. You can also highlight financial hardships, with out necessarily speaking about the specifics, if your credit reports look like they blew up (many other unpaid collection accounts showing).
Take it or leave it is an approach that can often apply to someone who is not collectable otherwise. You live in one of a few states that do not allow wage garnishment. If you are savvy and keep money out of bank accounts in your name, they cannot levy your bank account to collect. If you have no property to place a lien on, that is ruled out, and I see little willingness by debt collectors to seek possession of your personal stuff.
How you convey the “take it or leave it” strategy is not something where you are cocky about it. It is the opposite really. Something like “I finally talked about my financial difficulties with family/friend, and have pulled together 9k to resolve my bills. I have other debts than this one, but want to resolve the biggest bill I have. All I have in the world is this 9k. Will you take it as settlement”?
Something along those lines. If they say no, you wait a month or so, and then call and offer it again. Your not in a hurry, and the amount of money you have access to has not changed, but you wanted to try again to be sure. They may not take that low of an offer, or they may counter along the way. You may never be able to settle for 25%, but may be able to add to what you can offer along the way.
I still do see lower settlements with Citibank accounts, sometimes in the 30 percent range, but they are non litigation accounts. The age of the judgment, and the state you live in, plays in your favor. What does your credit report look like? Do you earn a solid income?
Hello. I’m having a problem with a Citibank credit card that I opened when I was 18. The card was 6900 in credit limit & I charged it up, wasn’t able to pay since I had many other credit cards with high limits. I decided about 4 years ago that I wanted to file bankruptcy but ended up not doing it. Now I’m 29, and today I get a letter in the mail from a lawyers office in Nevada that a judgement was placed on me to garnish my wages. I didn’t even know I was being sued or had a case against me! My bankruptcy lawyers never informed me of Citibank trying to sue me. I’m concerned now about my wages being garnished and I’m wondering if there’s anything I can do. Should I contact the lawyer? I contacted Citibank today to find out when my card was charged off and they tell me that it’s still a revolving account and that I can contact the recovery dept. I’m confused as to who I should contact to make payments or make payment arrangements with since this letter informs me that a judgement has already been reached in favor of Citibank. I’m also confused as to why I’m still being pursued and sued for this debt, because this debt is exactly 6 years old, in Nevada one cannot be sued for a debt with a written contract after the statute of limitations of 6 years has been reached.
Look up the court record for the Citibank lawsuit. What was the date the judgment was entered into the record, and what is the name of the plaintiff (if other than Citibank)?
Hi Michael, Happy new year!
Before I call and try to settle, here are the facts:
In 2009-2010 I owed Citi about $38K on three different cards, couldn’t pay and they sued and got a judgement against me about 2-3 years ago. In NC there’s no wage garnishment so they’re not collecting or calling me. I’d like to settle but not sure who to call, probably the local law firm that I talked to last. Nothing is in my name and I don’t need credit but I have put together some money and I’d like to take care of it for the future. Anything you can advise me to do or certain steps I need to follow? Thanks a lot!!
I can offer better feedback if you post the name of the plaintiff that sued, if different than Citibank (Citi sells unpaid credit card debt to debt buyers like Unifund Partners, and others). Who owns the debt can impact my feedback. Also let me know the name of the debt collection law firm that sued on the Citi card. Some can be more difficult to work things out with than others.
Citibank was the plaintiff and the law firm was Bernhardt & Strawser PA, here in Charlotte,NC.
Haven’t heard from them since they got the judgement 2-3 years ago. I was thinking of calling them and trying to settle but it has to be no more than 25% since I owe them about $40K now…
Thank you so much for your help.
Thank goodness I found this website. I need some advice. I am 75, my husband 76. I just found out we have roughly a $30,00 debt (total) with Citibank Master card and American Express – my husband never really has shared financial information with me. On the advice of a lawyer friend, my husband contacted Davis Law Firm in Staten Island, N.Y. – he was contacted by Island Group Partners LLC, also connected with Davis Law Firm, and they have said they will try to negotiate a write off of at least half – $15,000 – maybe more, of these debts – at 10% of the settlement. I am very worried – He (husband) told American Express we were working with a lawyer – and gave the name – and they haven’t called us since. Husband also told Citibank this a couple of times – but we keep getting calls ( we just let them go to answering machine now, per Island Group Partners) from Citibank to contact them about our account. As a worrywart – I have read a lot now – are we in good hands? Don’t know what to think. Please, please respond – thank you.
I do not know anything about Island Group Partners. But if they are licensed attorneys offering to negotiate your Citibank credit card, and the one with AMEX, for a fee equal to 10 percent of what they save you, I like them already!
That is an unusually low fee in the debt settlement industry.
The settlement percentages they gave you expectations for, half or more off of what you owe on these credit cards, are also fairly realistic. Another plus in their favor.
How long are you going to need in order to pull together the money you need to pay the settlements?
Well, my husband is hoping to settle for half of the $30,000 we owe, and then have a payment plan to pay off the $15,000. Citibank keeps calling and calling – we don’t answer. Oh my, what a mess.
How long would you need the payment plan to last if you were paying 15k?
My husband said we could probably pay off the remaining $15,000 in one year.
Also – Citibaqnk keeps calling several times per day – although they have been informed we are working with a debt settlement firm. We just let these calls go to voicemail, they disconnect – but I am so worried they will sue us – what to do?
Without the ability to fund a settlement in a lump sum, or your debt negotiation attorney being able to get them to agree to a settlement with the longer payment term you need, you are at risk of being sued. But realize that is part of the debt settlement approach sometimes. Lawsuits can be defended, and you can even win. But when settlement is the goal, even if you get sued, an experienced debt defense attorney can draw that out for many months, or perhaps even a year, which would allow you to settle along the way.
The multiple calls per day is a bit of a concern to me. It is a form of harassment in some cases. What did your attorney say about those calls?
I received your latest comment via e-mail – but just replied to that e-mail as my comments after the one above and your replies don’t seem to get posted on this forum. Hope you get it!
I deleted a duplicate comment about having 15k in a years time.
I got your email. I would follow your attorneys lead on this. If the calls persist after another week or two, post an update. I will have a suggestions from there.
Thank you so much, Michael. I finally feel I have someone in my corner! Judy.
We have a debt with Citi bank that was discharged in a bankruptcy settlement . We have called Citi bank for a letter of satisfaction 3 times in the last week and have recieved nothing but a run around. They keep saying it will be 3 to 5 business days . So far no one has returned our call. We have asked to talk to supervisors then they transfer our call to someone in India. We have the court docket numbers and the court documents but they won’t talk to us long enough to get it. We have to have this letter to purchase a house. We sent them a letter a year ago asking to get this letter and never heard from them. We have to have this before the end of the year. Please help us!
Is it that Citibank is on your credit reports in a manner that fails to show the account as part of your bankruptcy?
Can you share more about the issue?
Hello Michael,
I used to have 2 Citibank sears card that were charged off back in 2005. They are already drop from my credit report. However, Citi approved me for a credit card 4 months ago. But they just closed my account saying I had charge off’s from almost 10 years ago that’s why they cant allow me to have a card with them.
They sold both accounts to outside collections so they are telling me that I cant even pay them at this point. What is the best course of action to take? I really don’t want to lose the card that I had with them. Do you know how long will my charge off stay in Citi Banks systems?
Ill appreciate your guidance. Thank you
Alex
It is possible that you will be declined for Citibank credit cards forever. American Express has kept a black list like this, and anyone getting another card from them is unlikely.
Is there a reason you want the Sears card particularly (rewards, offers)?
Hi Micheal. Im wondering if you would be able to offer me some advice. Over 4 years ago i went through a messy divorce resulting in me being left with nothing other than a car. In that following year i managed to get my self into alot of debt. (Therapy, bills, Children and attempting to start a new life). I had credit cards with Discover $16000 Chase 15000 and spirit around 15000. After being harrased by my ex at work i eventually lost my job. Things got to much and i left the country. I have dual citizenship and now reside in Europe. For 3 years i have not been back to the states and never had any contact with my creditors. I am now working and finacially stable. I would like to visit my family in the states and deal with any debt i left behind. My question is can i be arrested on my return for my debt. Im not sure if a cour summons or anything can be served when im not in the country. Secondly how can i find out if my debt has been sold. I no i really left a mess behind but i was in a bad place. Im doing good now and would like to take care of my debts.
You will not be arrested for your unpaid debts entering or leaving the US (even if you were sued without your knowledge, and judgments entered in the court).
Lets get started finding o0ut what happened with those old accounts. Pull a copy of your credit reports. You can buy a copy from any of the majors, and also are entitled to a free copy from each every 12 month period at http://www.annualcreditreport.com.
How does your credit report show the balance currently owed on the Spirit, Chase, and Discover accounts? If there is a zero balance owed, they are likely sold to debt collectors. If there is a balance reported owed as of today, you may still have to work with a collection agency to resolve the past debts.
Post what you learn and lets go from there. Given how old these debts are, I would encourage settling with them in order to resolve the debts, but while saving as much money as you can.
Hi Michael, Sorry for the late reply. I have been trying to get a copy of my credit report but because i dont have an adress based in the USA i dont seem to be able to get a copy? Is there anything else i could do to recieve a copy of my report?
Thanks so much!
Sienna.
If you have tried doing that online through that free web site I posted above, and hit that address snag, you can also try your request through the mail. Another free resource I like is available when you use the credit report card tool at http://www.credit.com.
You may want to try purchasing a 3 in 1 report directly from one of the bureaus too.
Hello I just received a summons from discover card stating I owe $4500. I don’t deny what I owe but I don’t have the money to pay in full due to circumstances within the year. I’m now currently single supporting two small children with only one income. Discover card back in may 2014 has called me over 30 times a day and that’s no joke. I’ve had discover for nearly 15 years and had a balance of close to 11k.
I do not want to go to court. Is it still possible to work with discover to come up with a settlement?or has my ship sunk. I have 20 days to answer the summons. Any help would be greatly appreciated.
If Discover would accept a settlement, how much money could you raise in a lump sum single payment right now?
What state are you in?
Hi Michael,
We have a business (LLC) that we were forced to close by our landlord because the business no longer could pay the rent. In addition to unpaid rent (30K), we also have 70K in debt divided amongst 5 different credit cards/loans that we need to repay and we only have about 45K that we have available (from the sale of another business) to pay all of these. We are currently not late for any payments as of yet, but we do not have any other business income coming in to pay off these. We owe Citi about 20K. I know it is very early in the process as we are not yet late on any payments. We do show personal assets of > 70K, but are these protected since we have an LLC?
We would love to be able to settle with all of our bank creditors at 75% as soon as possible and not wait 90 or 180 days for settlement…just wondering the best approach? We are due an additional $15K due in 30 days from the sale of the 2nd business, but we must show repayment of these credit cards before we get the 15K due to us. This is why we would like to settle with our credit cards as soon as possible. Other loans due are with Bank of America, Key Bank, Chase and US Airways/Barclays.
Which accounts are in the name of the LLC only, and which are personally guaranteed?
What state are you in?
You would likely save more than the 15k you are owed by settling as strategically as possible, so the rush to complete these, while likely not all that possible anyway, would not necessarily serve your interests.
Hi Mr. Bovee.
I have a credit card with Citi that I defaulted on over 7 years ago. As a matter of fact it’s been so long that I can’t even remember when I first applied for it but I do know I haven’t paid anything on it for well over 7 years due to certain circumstances out of my control and I have not been in contact with the debt buyer ever. I recently pulled my credit report and found that the debt buyer listed the acct “opened in 2012 and have shown a balance for 3 times the original amount owed! I’m not sure if they are just a debt collector for Citi or an actual debt buyer but I’m afraid to call and find out! The original amount was around 1,100 and now it’s showing a balance of like 3,500! I live in Louisiana and I don’t know our State laws but the fair Credit Reporting Act (or whatever it’s called) seems to say that this may be illegal since the original default has been well over 7 years. I thought it should have fallen off by now buy I read where the debt buyers illegally re-date it to make it look like new debt. Is this really illegal? What steps should I take to have it removed? Thank you in advance for any advice!
Shaun
You will want to dispute the debt as being too old to remain on your credit reports. Send your dispute in writing to both the credit reporting agencies, and to the debt collector at issue. Send everything certified mail return receipt, and keep a copy of all letters for your records.
If that old Citicard does not come off with the first dispute, post an update and lets go from there.
Who is the debt collector doing the credit reporting?
Thank you so much for your quick response! Much appreciated! Pinnacle Credit Services is the collector. I wish I could remember the exact date I defaulted, I’ll have to look back through any records I may have. On my credit report it says “this account is scheduled to be reported until Nov 2015”. I guess by then they will try to sell that debt to another company and it starts all over. Ugh… Thank you again!
The debt could be sold before or after the drop off date.
Once debt collectors become toothless (cannot sue with your states SOL to legitimately use the courts passed), it is not a bad idea to consider sending a cease communication letter (use certified mail return receipt for this too), which generally results in phone and mailed collection notices stopping all together. If they do not stop after that, post an update.
they never work with you – I owed $6,000 and made payments $112 a month for 5 years, with zero percent interest. It went down to $2200 and had some medical issues and fell behind. They sent me 1 letter that said pay $1600, $400 a month, which I couldn’t do. So they refused – to do anything and now they will never ever get a penny from me – they are the white when dog poop turns the color white that chemical change is what SEARS is and Citibank
Some of the payment concessions banks would like to offer their customers, they cannot, due to regulatory and accounting concerns. I am not sure that happened here, but the zero interest rate on your Citibank card, for the life of the balance, suggests that is the case.
I have never heard anyone insulted that way. That was creative!
Just to let you know that I settled for 25% over 3 payments for Citibank debt over $15K that was in the hands of Capital Management. The advantage I had is that the debt was about 2 years old. Citibank kept shuffling it to Northland Group and Capital Management back and force. However, I really did not have any money to pay them. The first year they were very reactant to go below 40%, but after 2 years they were happy I called them and they agreed to 25% within minutes. If they tried to sue me, I would have no choice to file for bankruptcy so it would have been a loss-loss for all. This way they get some money and I avoid bankruptcy. A win-win in my book.
Hello Michael, thank you for sharing your expertise. I have been married to my husband for two years, when we got together he was separated from his previous wife , in the divorce he assumed the entire debt for a house which is upside down, so there currently is a mortgage, a second, and a high interest debt of $25,000 to Citibank. Currently our debt is more then our income, a big factor in this is the $650. payment owed monthly to Citibank. His credit is at 530 ….. ( I only recently became aware of how much debt we carry because he did not want to burden me with this knowledge as I had both my brothers dying of cancer ) meanwhile he continued to rack up negative credit history making late payments for utilities… ect Overwhelmed he finally admitted to being in serious trouble, I have taken over the billing and have paid off the items listed on his credit report . Our hope is to get a secondary lender to refinance the house and use part of that to pay off Citibank, we sent a letter requesting that we be allowed a one year period with only good faith payments of $100. per month until we can refinance then we will pay off the entire amount. Have you ever heard of Citibank making a deal of this nature? the condition of hardship is that he now has only one income since the divorce as I am disabled, also he does not have any option to work overtime because he is management exempt, nor does he have the ability to get a second job because the terms of his employment require that he be available for his work ( he has been working over 12 hour days for the last year as his shop has been operating with minus 40 percent of its work force. Any advice? Thank you for your time, Alyssa
Michael another small piece of information is that he has had a credit card with Citibank for 10 years, he has struggle with payments for the last two years, also he has worked for his employer for 26 years.
as far as other credit cards there are none that exist, and none that have been written off. We do have a house mortgage and a second on the home loan, these are set up on and automatic withdrawal from our account for payment purposes,
it has never been late.
This is a rock meet hard place situation. You cannot refi with those credit scores and the debt to income your at now, and cannot afford to make the payments to Citi each month.
What is it you have available to pay the ATT Universal card each month? I am looking for the amount of money you know can be consistently paid (100 is not an option).
What type of account is this with Citibank?
Citibank will typically not lower your monthly loan payments that much. Citi has offered a 12 month temporary hardship payment plan to credit card members over the years, but the lower monthly payments are factored by lowering your interest rates. At 25k, zero interest, and factoring other policies, and even regulatory guidance, you are still looking at roughly 400 dollars a month.
Are there other credit card balances being paid down? If so, what are the balances and interest rates?
Helllo Mr Bovee, To answer your question this is a AT&T Universal credit card.
My husband has a 7 year old judgment by Citibank (original debt $15k); he has no assets and is retiring in October with social security only. We married 3 years ago (it is not my debt); I have limited assets and limited income but I am willing to settle the debt. We started by writing 2 letters to Citibank (registered mail) and had no response. My attorney wrote a third letter and finally had a response which was to deal with Hunt & Henrique (the law-collection firm that represents Citibank). With a financial advisor (appointed by our attorney) we contacted Hunt & Henrique and was told that the account payoff was $27,000 but that they could accept $18,000. We asked the lady if Hunt & Henrique had the authority to reach settlement offers on behalf of Citibank and was told that they did. Our financial advisor called the same lady back and made an offer of $8-10k and was told that would work and for us to call the next day to confirm the offer. When we called the next day the lady said it would take $18,000. Our advisor called her back and this lady (I do have her name) said that $8-10,000 would work but when we called she said it was $17,999. We had our attorney write a letter of complaint to Michael Hunt (no results). Our attorney then talked with another lady in collections who said that Hunt & Henrique does not have the ability to reach settlements–that it would take $18,000 to settle our account and the only exception is if we write a letter of hardship which they submit to Citibank for approval. So we wrote a letter of hardship stating our case and restating our offer of $8-10k. Two weeks later yet another lady calls our attorney and says that the letter has never been submitted and that she can take $15400 but she has to get it approved. This is not my debt, I have made a offer to settle the debt just to clear the slate and not have issues unsettled during our retirement years. These folks at Hunt & Henrique do not deal in good faith. What can we do? Patricia
How collectable do you look on paper? Are there credit cards showing as paid on time on your husbands credit reports? How about car or mortgage payments? Do you have equity in a home?
Can you verify that Citibank was the plaintiff in the lawsuit? I want to be certain you are not dealing with someone like Unifund (a frequent buyer of defaulted Citibank credit cards).
Are you in California?
Hi, i would like to ask. I have a balance of $3800 on my citi card and the bank sent it to GC Services to collect from us in behalf of citibank. I made a payment plan with them for $300 a month for 12 months. Im on my 3d pymnt now. After making that 3d pymnt, i checked my balance and now im current. Can i still call citi and ask them if we can lower my monthly payments and cancel my payment plan with Gc services which is a collection agency? I checked my minimum payment due in the citi website and now its only $150.
How many months Citicard payments had you missed prior to making the agreement to pay with GC Services?
I was 8 months delinquent. I would like to ask if i can still call citicards for a new payment plan or inquire about my account?
That would mean that your Citicard was charged off, and Citi is contractually obligated to GC Services to pay a set amount on what they are able to collect. At this point, no, you are not likely going to be able to have a productive conversation with Citibank. If your payments to GC services ceased, you may find the account back with Citi bank for a very brief window. But that may lead to even more concerns.
The online representation of your payments is an oddity, and I do not see any thing about that you can capitalize on as a benefit.
Thanks you so much for your help. I was able to settle my 2 citi cards at 25% and 27%. The larger card with Alliance One was actually easier to settle with 4-6 phone calls. The smaller of the 2 cards took more like 3 months to settle with GC Serv. Thanks to your website and my hard work I feel good about what has been accomplished. Now on to the next. Chase. I haven’t even called them since I got the collections notice on July 1st. I have just been too wrapped up in the Citi cards. Wish me luck! I’ll see you on the Chase page.
Great job Brooke! Your persistence, and the manner you negotiated with the debt collectors, resulted in better than average settlements for both Citi accounts.
I owe $33k, of which about $12k is principal. Several years ago I fell on hard times and worked with Citi to lower the monthly payment. They stated, up front, they would only do it once, and for one year only. They weren’t kidding. As soon as the 12 months was up (but my hardship was not), the payments ballooned to four times the hardship amounts. I have been paying them $25/month ever since (4 years) as a token effort until I can begin negotiations.
But, in reading the above, I have no funds with which to negotiate. In attempts to pay off loans that were lien’d against my house, smaller CC amounts, I closed my 401k.
How can I get Citi to come off $23k in interest and settle for something more humane?
In order to settle with Citibank, you need to have an amount to offer. The way I read your comment, you have nothing to work with other than 25 dollars a month.
Did I read your comment wrong? Are you now able to come up with a lump sum settlement,but just need the settlement to be low enough to still have money to pay off other collections etc?
Michael,
Alas, you read my comment/question correctly. I am living paycheck-paycheck, finally debt-free except for mortgage and car lease. Well, debt-free except for the +$800 in interest Citi is billing me for every month.
Is there any way to drive a wooden stake into that vampire, get them to come down to -say- $15k with no accruing interest and then let me make serious monthly payments on it ?
Not really, at least not in the way you have worded it. I would suggest either bankruptcy, or saving up the money you would use to make serious payments every month, and once you have, say 35%, settle the account then.
When was it you last send 25 dollars? Who did you send that money to? Have you heard from debt collectors, and if so, who was the last one to contact you?
I send the money via online bill paying system, and the $25 is listed on each month’s invoice from Citi. I have not heard from the first bill collector (I’ve just jinxed myself, I guess).
I think your account lost its way. Not that you want it to find it, but… here is what normally happens:
You are unable to make the required minimum payment, so you don’t. But trying to do the right thing, you send what you can. Whether you send no payment, or less than the required minimum, the account is normally treated the same way. If this goes on for 6 months (sending Citi nothing, or less than what you are supposed to), they charge off the account (no longer treat it as an asset on their books, but a loss). Once the account charges off, Citibank, like other banks, will treat your debt with the ASS principle I outline here: https://consumerrecoverynetwork.com/credit-cards-debt-settlement-why-banks-do-it/
You have the ability to settle all along the collection pipeline.
Your having kept this up for the years you have, while paying 25 dollars a month, and not hearing from a debt collector at all, means your account is stuck on stupid (but in a good way depending on your perspective).
I have had files with Citibank where the account could not be found at all, with a CRN counselor and the customer working really hard to locate it to settle. In those rare cases (I can recall 2), the accounts were found 2 and 3 years later.
Yours is made more odd because you are paying something and that payment has to be applied somehow.
One other thing. I believe my accounts will hit 180 days past due in august. Do I remember correctly that this is when they are more likely to be sold off?
180 days is when your account will typically get dropped in the collection pipeline I call A.S.S. (Citi bank will assign, sue, or sell). You can learn more about that here: https://consumerrecoverynetwork.com/credit-cards-debt-settlement-why-banks-do-it/.
GC Serv is saying rock bottom is 35% and if I can’t pay today being the end of the month that I can consider making monthly payments towards the whole balance. I’m trying to pay this but as of today I don’t have it. I have 25% but they will not take it. I was told that GC was only authorized to offer 40% and when they (felt good) about submitting 25% to Citi for it to be approved it came back at 35%. Does that mean tomorrow being a new month the 35% is able to be negotiated down or that the 35% is off the table for good? If I said I can do 30% today is that something they would normally have to get approved by Citi or is that another tactic to say they don’t have the authority to approve it? So confused and exhausted.
Brooke – I was out most of yesterday. What did you decide to do with the GC Services offer?
Sometimes accounts are just not going to get low enough to settle. If you absolutely have to have the 25% to 30%, you hold out to see if it can happen.
I do understand the exhaustion feeling. I started settling debts in the 90’s, and having been at this type of thing for a while, I can still hit a file here and there that feels exhausting, and I know what to expect….
You need to know that the offers may never go lower, and in fact, may increase. As accounts are replaced with different debt collectors, things can change, especially if the accounts land with a collection attorney. Even things on your credit reports changing can move the needle on your collectability score such that the next collector (GC Services will not have this account forever) will not go lower than 45%.
I do not know your file to the degree I would need to in order to give much other than the general feedback I have. But on the surface, I would consider the 35%, and see what the monthly cash flow, and access to resources, looks like on a multiple payment settlement on the other one.
GC Serv. came back at 35% and is giving me less than 24 hours to make a payment. I simply said I don’t have the funds to pay that much plus unless I can work out a better deal with Alliance (which is at 40%) I cannot see throwing money away unless I can pay both. I’m not sure if this is a tactic to give me such a short amount of time and I am so discouraged at this point.
Would it make sense if I call both companies and tell them to go back to Citi and say that I will pay both cards if they can come down to 25% on both cards at the same time? And is that time frame really a true time frame or just a tactic? My bank isn’t even open to verify funds before the offer expires.
Any suggestions would be appreciated. I just am not sure if what I’m thinking even makes sense to tell them. Should I be even giving them a number to negotiate or just ignore them for another week?
I would not let this effort discourage you overly much. It is what it is, and you can afford what you can. If not today, you will likely have additional opportunities to settle. The problem in all of this is if you were sued prior to being able to fund the available offers. Not that you cannot settle when sued,or even prior, when the account is placed with an in state attorney for collection, but you will typically find you are negotiating for a much higher pay off than now.
You can try to call Citibank and look into that level of coordination, but my experience suggests that will not lead to anything productive.
I do believe GC Services is using a collection pressure tactic with the whole “pay in 24 hours”, but it is possible they are set to lose the account (debt placements do not generally last all that long – a few to several months normally).
35% is a good deal. If I had no shot at raising that amount of money across both accounts for the next few months, I would try to grind them down once every few weeks, with an extra push in the last week of the month.
Over the years, I often look at ways to handle one account quickly, while developing a longer range plan for another account. That could mean paying 3o-ish percent on one account today, and then settling with a longer term payment arrangement on the other, or just saving up longer to do the other account, and getting one out of the way to reduce my risks of being sued by half.
Well Citibank transferred my 2nd card to Alliance One even after keeping in touch with them through this process. I actually was offered a settlement from Citi for about 40% of the balance. Alliance asked me so many more questions than GC Serv., such as my take home pay, amount of mortgage and bills. how many cards are in collections. how much is in my bank account etc.. Are they allowed to ask this much information and should I be answering those questions?
GC Serv. has gone back to Citi with an offer of 25% of outstanding debt. If I can get that approved with GC Serv. is it possible to get that same deal with Alliance? Alliance has come back at 65% and then at 40% on the same day but said 40% is the best they can do and I have one day to accept. They also asked me to make a good faith payment. I don’t understand why I would make a payment without a settlement deal in writing.
What I am concerned about is working out a deal on the first card and not being able to settle something on the 2nd card and then still having to file for bankruptcy. Do you think if my first deal is accepted with GC Serv. that I should tell Alliance about that deal to get a more reasonable offer and put these 2 cards behind me so I can start tackling the next one?
Thank you,
Alliance One can ask all of those questions. It is your choice to answer or not. But if you are looking to get an exception to Citi policy on how low of an offer they can negotiate, it is common to have questions posed.
If GC Services is able to get you the 25%, I would definitely leverage that deal with Alliance One, and let them know that you cannot take the GC services deal if Alliance cannot do the same thing. 40% is typically the floor. Negotiating a lower pay off is possible, but is situational, and can also depend on how well a person handles the process. You seem to be handling things well.
Hi, I have been unemployed for the last 3 and half years, and am still looking for work without much success. I don’t have any property except for a car. I have 2 citibank credit cards and each carrying a balance around 10,000. I also have another card with MBNA that has a 26,000 balance. I also have a chase account that has a balance of 6000 dollars. I currently have no income and have not had income for the last year and half (since unemployment ran out). The minimum payment for all 3 cards come to around 800 dollars and I have no way of making that anymore (I don’t even know if I could make rent and pay for groceries without family help.) I had to do a balance transfer to deposit money into my account from the MBNA card just last week. My last citibank balance transfer to deposit money into my account was back in April. I am wondering what I should do here? What will happen to me if and when I stopped making payments? I am leaning towards filing for bankruptcy at this point, and how should I go about starting that? Thanks so much.
If all else fails, I am considering returning to my home country (I have dual citizenship), but I really would hate to do that. I don’t want to run away. I would rather be able to start over here.
That amount of debt can be overwhelming even when employed. I would highly recommend you look into how chapter 7 bankruptcy will help you do exactly what you suggest – give you a fresh financial start.
You can reach a bankruptcy professional ant talk about that option more at 877-278-8117.
I talked to both Citibank and GC Serv and they offered:
88 days past due Citibank (Settlement Dept) offered approximately 40% of balance which I just can’t do and they I after pleading my case and saying I rather pay Citi over a debt collector I was given the next level phone number (Legal Team/ Internal Recovery) to call to see if they can help. I do have to say that the Citibank representatives so far have been very nice and understanding which I wasn’t expecting. What I wasn’t expecting was they wanted to know where I was getting the money and specifically who was willing to help me.
GC Serv. which has only had my debt for about a week offered me approximately 42% of balance which they said is the rock bottom offer. I basically said it wasn’t possible for me to come up with that amount so I would check back if anything changes. They were nice but a little aggressive and when I said I was trying to avoid bankruptcy they asked what chapter. I basically didn’t answer.
I am planning to call Citibank again before they sell my debt to see if they can do anything to resolve this at this point. I should mention when I called previously to settle both cards (before one was sent to collections) I told them my max to settle both cards in order to avoid Bankruptcy so I’m sure they are using that to come up with a number but that is for both cards.
Do you have any suggestions at this point. Should I wait to call GC Serv for a last ditch effort before filing bankruptcy?
You can wait and make a couple of last ditch efforts. Several years ago, at the peak of the economic downturn and record number of credit card defaults, better deals were available with Citi bank, and especially on larger balance accounts like you have. Now however, there are rare (very) instances where I am surprised by a 20 to 30 percent-ish deal getting approved by citi bank (either directly, or through a third part collector like GC Services). Keep plugging away and yours may be one of them, but you are prepared for the alternative if that does not happen.
I previously wrote regarding my 2 Citibank cards. One is now over 4 months due and the other is 3 months due. Citibank referred one out to GC Services for collection and will no longer talk to me. Is this a Citibank debt collector?
I called on my other card with Citibank but I couldn’t make an offer since I need to either settle both of these cards or file bankruptcy. I’m not sure what to offer the GC Services so that I can see if they are willing to work with me before I make a deal with Citibank. Citibank is only giving me 2 weeks to make a payment if they accept my offer. Please help.
GC Services is one of the collection agencies that I consistently have helped people to settle Citi bank debts with.
How much is the balance on both accounts today? Which one is now being collected by GC Services?
GS Services $15,500
Still with Citibank $24,500
what % should I start with GS Serv.? How quickly do they tend to settle?
GC Services may have your account for only a couple of months. You could soften them up over that time to get the best savings.
A realistic expectation would be to settle for between 30 and 50%. But this is an account that is not 180 days late, so getting the lower end of that would be unusual.
Could you pull together enough money from whatever resources to settle both accounts for somewhere in that range?
no, maybe 15 – 20% but not 30%. I’m also trying to take into consideration the tax consequences with a 1099-C where I’ll have to come up with additional money to pay the IRS.
Can you settle one of the debts now, and then save up over time to settle the next one? That is often how this stuff has to get done. How much can you save each month with confidence?
Read more about calculating how you may not owe taxes on forgiven debt here: https://consumerrecoverynetwork.com/debt-forgiveness-taxes-settled-credit-card/ – You may owe tax on all that was forgiven, only part of what was forgiven, or none at all. It is also sometimes better mathematically to settle one debt in one calendar year, and delay one or more for the next year (or get them done in a year where you were sure to be deemed technically insolvent).
What exactly should I be requesting in a Settlement Letter?
Read over the report about debt settlement letters here: https://consumerrecoverynetwork.com/debt-settlement-letters-agreements/
Thank you, should something be in this letter as to how they will report it to the credit agencies? If so, what specifically should we ask for when negotiating how it is reported? Also what about the 1099-C? Is there something specific regarding whether this will be filed?
Also, when asking to remove fees and interest before settlement what does this mean? How long would they normally remove interest and fees for?
Negotiating interest rates with Citibank was something to do prior to your account getting to second stage collections and sent to GC Services. Any penalty and late fees that have been added since you quit paying should be part of your credit agreement with Citi.
Getting hung up on the removal of any interest rate increases, or interest rate applied to the balance owed, or any fees and interest being removed from the balance owed as of today, is not productive if you are sincerely trying to arrive at a pay off amount and pay the settlement with Citi.
The overall balance reduction you and Citi agree to after negotiating with GC Services yields the savings you can afford to pay (fees and interest included).
Citibank should update your credit reports to reflect a zero balance owed as a result of your paying the settlement. Whether they show paid/settled is not something to get hung up on. They are required by law to report accurately, and you really do not get to influence or negotiate much with Citi along the credit reporting lines. There is not much to ask for regarding the credit reports because the part you need to show – that you no longer owe – is required of them.
I am not clear on your 1099c concern. There is not much you can influence regarding whether Citi bank sends the IRS notice that they have forgiven more than 600 dollars of your balance, which will be the result of your settling.
You may have a shot at negotiating something regarding taxes and credit reporting if you were involved in litigation with Citi, but none of that is likely to occur at this stage of debt negotiations with Citi bank and GC Services.
Hello. I have gotten overwhelmed with trying to make all the minimum payments to my some 21 credit cards. I would like to pay off the smaller ones and attempt to settle the others. If I decide to stop paying so I can hopefully work out a settlement, should I call them or wait for them to call me?
Debbie – I cover what do, and how to prepare for settlements, fairly thoroughly in the debt settlement guide that starts here: https://consumerrecoverynetwork.com/credit-card-debt-settlement-program/. Read each section and then click through to the next at the bottom of each post. Post questions on each page as they come up.
You should also read through the critical reports articles that are outlined here: https://consumerrecoverynetwork.com/debt-relief-program-reports/. Post questions in the comments section of each critical report. You will be more prepared to settle your debts than you thought you needed to be.
Hello,
I have a $19k debt with wells fargo from a car that was repossessed back in 2008. The only reason the car went back was because i was paying child support for 5yrs for a child that was not mine. The child support issue was finally resolved last year and now Wells fargo is threatening to sue me. Im kinda at a loss here and have no idea what to do, if i was to actually pay this off does it help me in any way? or am i just out that money and my credit still reflects the negative. Is it too late to reach out to a Credit recovery/ group that will help deal with the issue at hand or is it past that point?
Javier – I see a couple of different directions this can go, but first:
When was the last payment ever made on this… was that back in 2008, or were there different collection efforts along the way that resulted in any form of payment?
What state are you in?
I would settle for 25% ……nearby city is miami beach, florida.
steven – I sent you an email to a few attorneys in the area with the experience you need.
I do not like the odds of settling for 25% unless you can show sincere hardship an/or put on a strong defense.
Is Citibank the named plaintiff, or another company name?
Hi,
I have a $32,000 cc. debt w/ citibank that went to lawyers and now a hearing for summary judgement.
I’m in Miami, Fl.
They offer 50% plan for 5 years no interest.
I previously settled a $17,000 debt at 25% in 3 payments,
They won’t go for same agreement now.
Everything is in wife’s name except for house and my 2006 truck.
I answered their interrogartorys yes to the debt thinking that they would allow the same 25% settlement.
I’m not willing to settle for the 50% deal,
Anyway to avoid this, any defense to bring ??
Is my house protected by Homestead, should I quit deed it to wife, transfer truck to her too?
What do you think?
steven
Steven – If Citibank settled for 25% with you on a prior account, was that account in the courts too? Same attorney?
Not so much for you (now past this point), but for others reading or subscribed to this page, the best way to get the same deal on multiple accounts with the same creditor is to negotiate them at the same time. Sometimes there may be different departments handling the accounts pre charge off, even offices in different states, but you can still play them off of the other and coordinate the results. Having said this, banks do change their recovery policies from time to time, and in my experience Citi bank changes there’s more often than any other major credit card lender. See https://consumerrecoverynetwork.com/review-top-7-credit-card-lenders-best-offering-debt-relief/
Once accounts are out of Citi recovery, and dropped into one of the three collection buckets, and with different companies or attorneys, you will, in most every instance, being one offing your settlements.
At litigation stage of collections, and having already as much as admitted the debt in your court filing, I do not like your chances of settling for under 50% unless you can show fixed income, hardship scenarios. Is it that you cannot settle for that amount?
Your home is likely protected as there is no dollar cap on the exemption in Florida. Do you have much acreage? Not sure about the vehicle. Might be limited to 1k value plus some other untapped exemptions. But it is best to cover this with an in state attorney, and preferably one with debt defense experience. I can email you some contacts if you like, just post the name of a nearby city.
I have 2 Citi cards with balances of appox $23,000 and $15,000. I just missed payment on the lower amount and after a week of them calling me I called them back. I had to ask them to remove my office number from their call list. In doing that I explained my situation of supplementing my wages with my savings account since the economy crashed and now my savings it gone. On top of that my husbands business is making no money and he hasn’t been able to find work. I told them I saw an attorney who suggested with all my other debt that I file bankruptcy but I told Citi that I would prefer to try and settle because it is the right thing to do. The person I spoke with was nice but told me in order to do so I would have to give her a settlement amount in order to talk to someone authorized to settle. First should I try to settle the cards alone or lump them together? Also, I was thinking of offering $7,500 combined to get to the person I need to talk to. What are your thoughts? It that amount a good starting place? I plan on not paying on either card but wasn’t sure if they would even talk to me until both cards were delinquent.
Thanks.
Brooke – Meaningful negotiations with Citibank will not typically occur until you are 90 days past due on the account. You will not be able to have a discussion about settling and account that is considered current. You are way ahead of yourself here. I would suggest reviewing the portion of the site dedicated to settling with original creditors at the earliest stages of debt collection here. That is the intro page, but you click through each segment at the end of each article. Post comments and questions as they come up for you.
Hi Michael,
I have a Citibank credit card since 2012 and have fallen behind on payments for the first time since 06 Nov-13 (First missed payment). My current balance is $9000 and in less than 30 days I will reach the 160 day mark. From what I have read online this is when it will start to get real serious. Due to the loss of my job I had to relocate back to my home country abroad. Due to this I have not received any communication from Citibank as the address and telephone nr that they have on file is no longer correct nor I have I contact them myself to explain the situation out of embarrassment. Since the whole ordeal is weighing pretty heavy on my I want to contact Citibank to discuss my payment options at this point. I am not familiar with what my options are to begin with as I have never been in a situation such as this. I have 3 other credit cards with Chase ($1,400 and $2500) and Capital one ($2500) that I have missed payments on since dec-13. I made a small payment on each of these accounts last month and based upon the last information that I can view via my online statement I will be able to catch up with these banks by the end of this month. I am curious if you can advise me regarding my options with Citibank at this point. Do you think it is reasonable to settle the debt for about 40% of the amount owed? If so, do I need to pay the whole amount at once or will a payment plan be possible? I will be able to make a payment of $1000 at the end of this month to show my true intentions on getting back on track with my payments and should be able to repay about $300 a month. If they reject my request to settle do you think “I can ask to get back the way things were” after I pay a lump sum of $1000 at the end of this month? I used to pay $136 per month at about 13% interest. Naturally the interest rate would be adjusted. Additionally I have a student loan with Citibank that I faithfully pay off every month as well since 2009.
Thank you for any insight that you may offer
Sara
Sara – If you cannot fund a settlement with Citibank, or the rest of the creditors for that matter, right now, you can circle back on these debts as you save up more money. The reason to be quick about settling is primarily due to the risk of being sued. These banks will not sue you in another country. So if you have to settle one account at a time, and with debt collectors rather than the banks themselves, that is an option, and common.
I do not think Citi will want to settle the credit card once you offer up 1k. It would be better to get payments back on track with them completely, or to wait and settle the Citi card with a debt collector later.
The way I read your comment suggests you would be able to, and even prefer, paying all of these bills with an affordable monthly payment, if you could get them all to play ball. If I am right about that, call and talk with a non profit credit counseling agency and see if you can get a plan set up through them that Citibank, Chase and Capital One all agree to. If you add up all the balances you mentioned above, its 15,400.00 total. You may be able to get a monthly payment between, say 300 and 350. Would that be workable with your income? You would pay the same amount every month until all of them are paid off. You can speak to a counselor and see if you qualify at 888-317-8770.
i know paying the money it’s not going to clean his credit report this is a big problem , i don’t know what is the bankruptcy do or assist in this case, ARS representative are not good at all they are talking nonsense, they need to got my account number and i would never ever give my account number i can pay with cashier check or money order which they refused and how can i know that they will send me release letter, so many questions, everyone need to advantage from others problem no one give advice for free thank you Michael for your quick reply, i didn’t sign for this credit card and i don’t know how they can add somebody without permission this is a big issue to me.
hi Michael
my husband has citi bank visa card and he used to pay until he got layed off from his work and have a major son’s illness i have to take him to the ER for two days every 3 weeks i had no time to look for enything i was taking care of my son who got a rare blood disorder any way now citi bank sold my husband credit card to the collection , i didn’t signe any paper with my husband to be a coapplicant with him , i need to know what is my situation on my credit report, i called the collection company which is called ARS National services inc ,so they said u can pay 3k insted of 12k but they wanted to take my account number and i have nothing in my hand about the settelment and then they send my onother settelment yesterday by email that i have to pay 6k ,i don’t know who im dealing with , i don’t know those people and i’m worry to pay them anything i need to pay to citi bank , i don’t have money but i will sell my car my husband lost hiring in a good company becouse of his credit reporte , how can i clean his credit reporte ,please let me know how can i solve this problem ,thanks
eva – You have a lot going on, and the feedback you probably need is better offered in a consultation. You can call 800-939-8357 to speak with a specialist, or fill out the consult box in the right column.
ARS National Services settlement offer is a good one. Even though the offer was approved for 3k on the phone, then followed up with 6k in writing/email, you can call and work to get that 3k approved and sent to you in writing. The issue will be not having the money to pay ARS the settlement. If you are relying on selling a car to pay a settlement, sell the car first and have money in hand, before you get a settlement letter with a paid by date on it.
Settling may not be the better option at this point. I am concerned that you reference your husband having other debts too. Selling an asset like a car to pay a settlement, when there are other unpaid debts out there, may not be a good path. I know you say he was turned away for a good job due to the shape his credit report is in, but would that still be the case if you filed bankruptcy? What type of work does he do?
I have a CitiMortgage account that was the second mortgage on a foreclosed-upon house as a result of a divorce. Though the divorce agreement stated it was my ex’s responsibility to pay the mortgage (she was awarded the house then left with past due amounts) the loan is in my name and therefore my responsibility. It is in the collection process but keeps getting bounced from one attorney to another as I have moved multiple times since the debt was transferred to collections. Should I just wait to hear from the newest collection company before making payments on this loan or contact Citibank to get an address to begin sending monthly payments to them?
Adam – What state is the home in? Was it a purchase money second mortgage? How long has this gone unpaid? Do you happen to know if the second was underwater, and if so, by how much?
It was a second mortgage in WV. Not sure how underwater it was but the debt is about 32000
Thanks Adam. If your goal is setting up payments you can afford with your monthly budget, calling Citibank if it is in between collectors is a good idea. If they still own the debt, and have assigned it out again, they can tell you who to contact.
What type of monthly payment are you able to make on the Citi mortgage?
Are you able to pool together cash resources to offer a reasonable settlement on this?
I can afford about $300 a month but do not expect them to accept that monthly amount due to the amount of the delinquency. I could drain my 401 (k) in order to settle the debt but would prefer to not go that route if possible. What are the ramifications of just beginning to send payments to Citibank without setting up a repayment plan?
Adam – Sending in any payment prior to an agreement could mean they can, and often will, still sue you in order to secure higher payments, or stronger collection avenues if they get a judgment. Having an agreement in place first will remove that risk – as long as you are following through with your part.
I do not see that amount as being an easy pitch to get them to agree to either. Are you certain this account is still with Citi? What do they show on your credit report as the current balance due? Is there someone else reporting this, a debt collector/buyer?
I would agree with you about touching your 401k, at least in most circumstances. There are indeed compelling reasons to take the hit there, in order to eliminate other immediate concerns.
What are your thoughts about using bankruptcy to manage the situation? Have you looked into that? If so, what stood out as reason(s) to avoid going down that path?
Dear Michael,
I have a personal loan with citi bank UAE. I have paid the monthly instalement on time for the past 6months, and due to a financial issue I missed 2 payments. Now I have asked the bank to give me another weeks time to settle the Dec and Jan payments, but they informed me they cannot and that they will deposit the security cheque to my account. My account is with another bank and I have take a personal loan from Citi bank. I have provided them cheqes for the monthly instalement. Is there any option where I can talk with the bank and explain my situation and come to some agreement?
Sue – I am not going to be able to offer confident feedback regarding debts originating from the UAE. The focus of the site, and my experiences, are limited to North America.
Hi Michael,
Thank you first of all for helping all of us with debt issues. I have a Citicard balance of $1800, Discover $1500, Chase $3000, BofA $5000, QVC $800, Kohls $300, and a couple of other store cards @ about $50 each. I got in way over my head and now I’m trying to scrape together the money to settle these debts. My payments on all of them are 2 months past due at this point. I’m hoping to to settle each of them for about 50%. Do you think that is doable? Is it too soon to try? Will they make me an offer or do I need to contact them? I don’t work but I think I’ll be able to borrow a lump sum to settle. I have used some of the cards for small (less than $200) purchases about 2 months ago, will that make a difference?
Thank you for any insight you can offer,
Melissa
Melissa – Settlement trends with Citicard and Discover are both within your expectations, where Chase and BofA I would target at around 40% (but could possible hit lower settlements than that). I would typically not recommend settling balances as low as the QVC, and certainly the Kohls and the smaller store cards. You can read more about which accounts are better targets for settlement here.
Trying to negotiate at 60 days late is too early. You can better prepare yourself to time each of the settlements be reviewing the first stage collection portion of the debt relief guide here. That section will also help you understand when you should make an offer, or when to accept, or counter a settlement offer made to you.
Making recent charges to an account you would like to settle with shortly after is not a good idea. It can hinder negotiations. Knowing that now may not matter much if you are unable to pay and have to borrow in order to settle.
Read through any of the debt relief guide and post questions and concerns in the comments along the way.
Thanks for you reply. I appreciate it very much. So should I wait for about 150 days since my last payment to approach the BofA, Chase, Citi, & Discover? I’ve read a lot of posts here and that seems to be the idea. Also, should I try to pay in full the smaller ones? I don’t want to be sued, although I don’t think I’m highly collectable, if that makes sense. I don’t own any assets and I am not employed. If I pay in full the smaller cards that will leave me with about $1300 less to settle with the bigger debts.
I should add that I have only had these credit cards for about a year or so. I’m a homemaker so I’m dependent on husbands income and it has decreased recently. Will the newness of the cards prevent me from being able to settle? I will be able to offer them a lump some of about 40 -50%.
Thanks,
Melissa
Melissa – I would pay the smallest balances for sure if I were in the same boat.
Yes, the newness of the accounts is likely going to impact you. Citicard may not settle prior to charge off, and Discover Card also shows resistance with new accounts. There are trend changes with all credit card issuers, and 6 months is the cycle you are in from the date you first miss a payment, until the account is the most likely to charge off. Things can change in that time frame, and perhaps more so this year than ones prior, due to some expected regulations regarding debt collection. All of this may just mean you settle some of your accounts with outside debt collectors a little later than 150 day plan.
Thank you Michael,
If I settle with outside debt collectors will I still be able to get a discount? 40 – 50%? Also, will my balances that I am trying to settle keep going up due to late charges and such? The amount I’m going to be able to scrape together is based on 50% of what I owe now. I don’t think I can come up with any more at all.
Absolutely. Negotiations and settlements for great savings are often more likely with a debt collector or debt buyer. The settlements do not generally improve when an account lands with a debt collection attorney, so avoiding that by settling at the earliest opportunities is better. That is just not possible for someone struggling with payments.
Those balances are going to increase from late penalties and fees. Your interest rates can also climb to default levels, but generally not until the 3rd month. This side effect is why settling small balance accounts does not make sense if you can plan for and avoid it. The math doesn’t work. I do think you will be in good shape settling some for a good bit under 50%, and some at, months from now.
If you run into a stitch with one of those creditors, or later on with a debt collector, you can search for their name on the site and find a page or three with an ongoing discussion where you can join in the comments.
Hi Michael, I owe Citibank $1,918.79. Due to financial hardship, I was unable to settle with them at the time (they wanted 959.40) before the account went to an attorney, Slater, Tenaglia, Fritz & Hunt. I contacted them yesterday and requested they settle my account for 960. They refused and offered to “settle” at $1,478. Since I told them no, he told me I could pay the 960. and make payment arrangements with my checking account. He also said he would not be able to put any agreement in writing. I did not agree, nor did I provide my information. He told me I’m being sued and need to pay that or much more in attorney fees and court costs. Does this sound accurate? I only can pay $1,000. total because I have other accounts in collections with other creditors. Thank you.
Debbie – Settling debt is rarely done at a static amount of savings. The issue is what you mention in your comment – your debt changes hands. Citibank may have offered 50%-ish, where a debt collector Citi sends your account to may have been able to approve 40%, and where attorney debt collectors will only approve 60, 70 or 80%, and maybe no reduction at all – just monthly payment options.
If there is not a judgment in place, and you can settle this in a single payment, and get the lawsuit dropped, I would personally want to go that route. I know you have other collection payments worked out, but if those accounts are not also in the courts, they are not typically going to be the higher priority. Are there any other sources of money you can tap?
Thoughts?
Michael,
I have a Sears Mastercard serviced by Citibank. Long story short my account was charged off due to a misunderstanding of my account number changing last year. I opened a dispute with the Citibank Internal RMA group, but I have not been able to get anywhere with them and it has been over 5 months now. What I am trying to find out is who at Citibank has authority to make a deal to get the charge off removed from my credit in exchange for full payment. I have called in several times asking for someone that I can work with, but I have not gotten anywhere. Any thoughts or suggestions you might have would be greatly appreciated.
Bryan – I cannot think of anyone you could call at Citibank who is going to delete the charge off once you pay off the balance in full. You need to escalate this type of thing to senior management in my experience.
What were the conditions that led to nonpayment (too little to go on in your above comment)?
Depending on what your response is, perhaps it makes more sense to put your issue in front of Citibank management, prior to filing complaints.
Michael, seeing Mary and others do this gives me hope. I have a $23,500 balance with a Citi cc and am 84 days past due. I keep sending in small amounts when I can but that doesn’t help my acct. They want me to send in $540 so my account doesn’t go from 3 to months past and they close it. They will not offer me a payment plan and I asked about a settlement and they said not at this time. I am dealing with the forbearance dept. My credit went from 760 to 560 in a few month (I have other cc debt too). My question is am I better off trying to pay little by little even though it doesn’t put my account in good standing, or pay nothing until they come after me?
brad – If you are paying something, but not the required monthly minimum, Citibank will charge off the account and drop your account in the collection pipe line anyway. Sending in the required minimum today, without bringing the account current, could still lead to the same result, unless Citibank agrees to a payment plan. Best case scenario on the monthly plan would be roughly 400.00. But an average Citibank monthly payment reduction could look more like 494.00 a month (based on your balance and 2.1% of that set as your monthly payment).
As far as paying nothing until they come after you, not a good plan if meant literally. You can still proactively resolve the debt at any stage of collection, and often on better terms. But before going into that feedback, couple questions:
1. What is the total of all other debts?
2. Are your other payments as late, or receiving less than the monthly minimum, like Citibank?
3. Are you working? Is your income steady/predictable?
4. Briefly, what occurred that led to your inability to keep up with bills?
Thank you for your time. I’m in the same situation. Citicard was opened in 2006. (“Friend” piggy-backed me into debt) I’ve been paying since 2007, I do not carry and have not used the card since. Last year I was out of work, called Citi and went into a $305 payment at 0% arrangement. By borrowing most of 2013, I met every payment until Jan 2014 . I can not keep up. I spoke with Citi in Dec, Jan and today. Asking them NOT to take any auto payments. I offered $1000 to settle. They said to settle (and not guaranteed) I need 95% of the balance. I believe in the last 8 years I have more than paid for the purchases and interest made in 2006. On 2/14, I will be 2 payments behind on the arrangement. Your advice is greatly appreciated.
Stasi – What is the balance owed on the citi card right now?
The balance is $4562.00.
Thanks. The Citibank rep that said they only settle for 95% probably does not know any better and is trained to give that response. You are looking at needing to come up with 2-ish-k to settle the Citibank account – based on trends today. I know you can calculate how you have more than paid them back, but that will not matter to them. You are pretty much dealing with policy, not people, when negotiating.
Can you pool together a couple thousand before your account is considered 180 days late?
Settling with original creditors like Citi is not complicated, but you are a bit early in your efforts. You can review the settlement guide for this stage of collection here. Post questions and concerns in the comments along the way and get feedback.
Hi, I owe almost $1500 to city and they sent me this notice Hunt &Henriques attorney at law. It says their client, portfolio recovering associates, engaged the law firm to collect the debt. It also says that I have 30 days to dispute the validity of the debt.
Am I being sued? Will they go through the trouble of suing over this amount? I’ve known people who owe more and nothing happens. Can I still settle with city?
Thank you
Ari – Was your original creditor Citi bank?
It does not sound like you have been sued, but it does sound like the odds of that happening have increased a good deal. Hunt and Henriques is a collection law firm with a very active reputation for suing as part of their collection efforts, and Portfolio Recover Associates, who likely purchased the legal rights to your debt, does sue on a portion of the accounts they buy.
I have seen collection lawsuits for under 400. You bet collectors go through the trouble to sue for 1500.00. Some original creditors will sue to collect over that, and lower amounts too.
You cannot settle with the original creditor, which I assume was Citibank, because legal rights to the debt have been sold to Portfolio Recovery and Associates. And because PRA has contracted with Hunt and Henriques, at this point, you will likely have to negotiate your settlement with them.
I took credit card from Citi dubai but faced severe dicrimination from my boss in 2006 which led to stress and i left the country, hence could not pay the balance until 2006 I was never defaulting i paid on time.
But now I am in Bahrain and I receive calls from the Debt collector Bilkish Associates who have been paying visits to my family in sri lanka and harassing and making vicious threats on my family. They have somehow got my contact number and they called me yesterday asking me to settle almost 15,000 AED, which i cannot do at this stage as I am still trying to recover various other obligations.
I am worried if they can get me arrested in Bahrain and sent to Jail
Please advise.
Audrey – I am sorry, but I cannot offer any confident feedback to you about your issue with Citibank collections outside of North America.
HI Michael,
Do you think I could get a better settlement offer from Citibank, now, at the end of the year vs. settling with them in the new year (2014) ..?? I am just wondering if Citibank, like many businesses, want to get their “books” closed and settled before the year end. I know for me, I would have to show the forgiven debt either way, but I didn’t know if they would make better deals at the end of the year..?? Thank you ! 🙂
mary – There are indeed timing factors to settling debts. But the end of year strategy settling with Citibank before they charge off the account (or other large credit card banks), is not typically a meaningful strategy. The banks tend to think about each quarters loss reserves on non performing assets, and are not likely to adjust that in the larger perspective.
There are good tips to follow in this video about settling collection accounts using end of month strategies.
Hi,
I took a credit card loan from city bank in 2007 for AED 65000 and left the country. I have paid the load till 2012 from Bahrain. Now 11000 AED outstanding needs to be paid and asked for the settlement no proper discount still no reply.
Now i want to come on visit visa to seek a job, is there any immigration ban in the airport?
If i pay now and get NOC still i will face a problem in the Airport?
One of my friend told me that since you paid huge interest for 4.5 years this amount will be adjusted through insurance claim. Is it so?
But i have not received any call or mail from the bank to pay the outstanding?
Please suggest me to proceed further
Thanks& Regards,
Selvar
Selvar – Are your questions related to entering the United States, or another country?
I cannot answer your question about issues related to your Visa and immigration. You should connect with an experienced attorney on that. But I have never heard of there being an issue for entering the US that relates to paid/unpaid debts.
I am not sure what your friend could have been speaking to regarding your past interest payments getting adjusted by an insurance claim. Credit card banks like Citi do follow GAAP (genarally accepted accounting principles), and that means charging off unpaid credit cards no later than 180 days of nonpayment. Citibank just dumps those accounts into the normal collection pipeline after that, but that does not make the debt go away through any offset or adjustment. At least not in America. My comment is only as relates to Citibank here in the US.
Hi Michael, You mentioned being able to put in your search engine the name of the creditor you plan on settling with to see percentages and experiences people have had. I wanted to fully gear up to settle with Citi (Credit Card). I only found limited info on them. I am not late but getting in over my head, and doing research before I pull the trigger. Thank you in advance for your generous info, as I would be happy to leave comments on the page you suggested. I also would like to know if in the settlement negotiation process if I can include not being 1099 as part of the agreement?
I also wanted to jot down another thought regarding Citi….If I default on both of my Citi cards, to the point of collections, how do I know when its a 3rd party collection agency versus an internal collection agency? And at that point if it does go to a 3rd party collection can I pursue aggressive validation from them to in turn prove they can’t collect the debt from me? At what point can one get lucky without being sued because a debt has gone uncollected for so long, in which case no attorney has been established? If an attorney is hired to collect the debt, can I just set up payments with them or file BK since the inevitable will be that I am being sued.
Shana – You can tell you are being contacted by a debt collection agency or debt buyer by how they identify themselves on the phone, or by their letterhead on collection notices you receive. When in doubt – you can contact Citibank and ask them who they sent an account to for collection, or who they sold your account to.
I am not sure what you mean by “aggressive validation”? There is a fairly simple process to follow when requesting a debt be validated. Creditors and debt collectors can meet their legal obligation in this regard with relative ease. With many changes expected in 2014 to how information about accounts are maintained at all stages of collection, debt validation will become even more simplified.
Your states statute of limitations to legitimately be sued on a credit card debt will dictate for how long you roll the dice. You can absolutely set up payments with an attorney debt collector, and you can certainly file bankruptcy to protect yourself from lien, levy, or wage garnishment. But if that is the direction you can see clearly you would be headed in, I generally would encourage looking into filing sooner, rather than later. You could wait three years to file because you were sued for the Citibank debt, or file now and be in decent credit shape in 2 to 3 years. Also, rolling the dice until an attorney contacts you for collection often means paying more to settle, where the savings you can negotiate in the early stages of collection or typically better.
Shana – The current trends for succesfully negotiating a settlement with Citibank before they place an account into their external collection pipeline is briefly outlined here. Other than some one off events, I have not seen much change to targeting settlements with Citibank at roughly 50% of the balance, prior to an account charging off. I have seen a few files get settled for better than average savings though this past year. But I suggest being prepared with the most realistic amount if your goal is to settle with Citi before your account is assigned or sold off to debt collectors, or prior to the increased risk of being sued for collection.
You should also know that there is a great deal of change expected to occur in 2014 regarding rules for how banks, and collection agencies of all flavors, go about collecting debt. Because you are likely looking at 5 or more months from now being the earliest opportunity to settle the credit card debts at the best savings, those changes may work in your favor, if the come before June. Perhaps Citibank will soften up their targets they typically accept as settlement (they do that from time to time).
You cannot impact the legal obligation a bank or collector has to report forgiven debt to the IRS. There are some rare instances where some have succeeded with getting a debt owner to agree to something like this, but your odds of that with Citibank are zero, and close to nil with anyone other than Citi.
Hi Michael,
I had corresponded with you about a month ago regarding my business line of credit and a personal credit card , both with Citibank. I took all of your knowledgeable and very helpful advice (thank you!) My BLOC is currently at $49,649.50 🙁 and I am 71 days late. Everyone I spoke with at Citibank was really nice and compassionate. I called a couple of times to each and last week I received a call from a gal, I believe to be in Citibank’s business collection department. She was really nice and so I thought I would throw out the question about a settlement. Her ears perked up. At first she said they could only offer 85% on the dollar, she asked how much I could afford, I said $15,000 and she said they could only go as low as 50% on the dollar which she said was $24,840.00. I have had this BLOC for 15 years, the limit was always $50,000 and I have used and paid it down twice. I have not been able to pay down the acct since June 2010, so the acct has been accruing interest, which I was paying to them every month (approx $250) so since June 2010, Citibank has collected $9,557.00 from me in pure interest, with no money going towards the principal. (Seeing that amount in writing really makes me sick) But, I felt responsible for the acct and with rose colored glasses on, I thought things would turn around. With the downturn in the economy, my business has failed and I have no income. I also have a personal CC with Citibank and that balance is $43,079.88 and I am 68 days late. We recently sold our motor home and some other items and my plan is to offer each of them $15,000.00 …obviously less than the 50% on the dollar that they said they can do for the BLOC. I have not made any agreement, nor have I asked for a settlement yet on the personal CC. I have diversified my business and have some money trickling so I have no intention of filing for bankruptcy. My question to you (finally..haha) do you think I should take the 50% offer.?? I guess I am a bit sour because they already got over $9,000 in the last few years. Can I use that as a negotiating tool to bring the settlement amount lower?
I am kind of waiting to see what happens with the BLOC before I ask for anything on the CC. What are your thoughts…Thank you so very much, I am anxiously awaiting your reply 🙂
Hi Mary – There have not been any real trend changes with the major credit card banks settlement percentages from what I lay out in this post: https://consumerrecoverynetwork.com/review-top-7-credit-card-lenders-best-offering-debt-relief/. The 50% settlement with Citibank may indeed be as good as it gets. And if you want to avoid the unknown elements of what happens to your account after they drop it into the collection pipeline, taking the deal on the table will make sense. But you do have to weigh what your ability will be to settle the other Citi card 3 months from now.
I do not think you have any leverage by drawing a Citi recovery specialists attention to the 9k in interest paid. The Citibank rep is going to be working with limitations set by bank policy for handling this, and there just is not much room for creativity unless you can show extreme hardship, and often not even then. If you are leaving money on the table, it would not be much, and would be offset by default interest that will cause the balance to go up if you settle down the road anyway.
My experience would suggest you may not get anywhere on the credit card negotiations right now, and may want to resolve line of credit, then bide your time until the credit card nears charge off.
Thank you Michael for your reply. I agree but just wanted to run it by you 🙂 So I will call Citibank re: the BLOC and discuss it more in detail but I need to get the offer in writing from them, correct? The last time we spoke they told me if we move forward on the settlement, I would need to provide our 2012 tax return and last 3 months of bank statements on business and personal. (I did change banks but kept my Citi accounts open too). Should I get the offer in hand from them before I provide them with all that information? (I’m really worried they will say that they don’t do the offer letters) Lastly, is it okay to pay the settlement with a cashiers check?
Thanks again for all your guidance!
mary – If your records support your hardship I see no reason to not provide the information. It is more common for creditors like Citibank to request documentation like this on business accounts, and when the balance due is over 20k-ish.
Yes you do want something in writing before funding the settlement. Citibank, like other issuers, can require a payment be set up in their system prior to releasing the letter. Read through this article (and the many comments) about getting agreements in writing: https://consumerrecoverynetwork.com/debt-settlement-letters-agreements/.
It is typically fine to pay settlements with a cashier check issued by your bank, and withdrawn from your account. But there are instances where a bank can require ACH type of payment to secure the deal. I see less of that when dealing with a lump sum dollar amount of this size.
Hi Michael,
Happy New Year..! I have been in the settlement process with Citibank on my BLOC. Balance is $48,814.00 and after much negotiations, a hardship letter and submitted personal and business info. a settlement of $24,000.00 is in the works. I also have a personal CC with Citi, balance is $43,079.88. On Dec 17th ( at 91 days late) they offered me a settlement over the phone of $23,693.00, which I respectfully declined. I received a letter last week stating they had sent it to a collector, United Collection Bureau. I called them today, they said it is in pre-charge off status and that Citibank still owns the loan and that they are only authorized to settle at $28,739.53. I explained that is more than the offer Citi had previously gave me. She then suggested for me to write a hardship letter to Citi, (but emailed to her at UCB) but the lowest they (UCB) could submit a settlement request to Citibank would be $20,000.00. I would be paying both settlement amounts from my husbands mutual stock. My question is, in the hardship letter, can I ask Citibank to settle with me at $15,000.00 ?? (lower than the $20,000.00 UCB is stating). and am I playing with fire to wait a bit longer to see if I can get the settlement lower ?
Mary – good work on the Citibank business line. On the personal credit card with United Collections, yes, you would be playing with fire to hold out for 15k when the 20k would already be the exception floor. To be fair, Citibank has settled for lower amounts in the past, but that was a pretty small window of time, and during the height of the recent recession and spike in credit card defaults. I just do not see anything data driven, or even in the tea leaves, to suggest softer settlement numbers from them.
Best to you and yours in the New Year!
HI Michael,
I have to give you my update! I settled with Citibank on my BLOC, before charge off at $24,000.00, that is all paid and done. As I stated above, my Citibank MC was sent to United Collections Bureau for collections in a pre-charge off status (91 days late ) with a balance of $43,639.53. *** see previous post above***
UCB suggested I write a hardship letter atten: Citibank, asking for a $20,000.00 settlement. I wrote the hardship letter, but I asked for a $17,000.00 settlement. It took about two weeks, but I heard back from UCB yesterday and the gal that I have been dealing with said it was NOT approved at the 17K but it was approved for 20K. She was talking VERY fast and was kind of rushing me to send in my acceptance letter. That made me skeptical so I decided to call Citibank myself. I called the “recovery department” that was handling my acct prior to it going to UCB and they told me that my acct WAS approved for the 17K settlement !! So, I got all the information: the name of the manager who approved it, date, time, extensions, address, etc, etc..all the amo that I needed to go back to UCB with. I told the guy at Citibank that UCB told me 20K and asked if the extra 3K is UCB’s mark-up, he said no, all of that is done internally with the 17K settlement. So I emailed UCB a letter, gave them all the info that I found out from Citibank and asked them why would they lie and deny me my settlement after proving such a hardship..? ( I knew why…!! ) So, I received a call today from UCB, a different gal than who I had been talking to prior. She said, that I was approved at 17K, but denied anybody receiving/reading my emailed letter..! (even tho I got a read receipt ) So, I am now sending in my acceptance letter for the 17K settlement.
I wanted to thank you for all the information on this ENTIRE site and all of your guidance. I read topics over and over again on this site..!
I learned about how to deal with the collection companies and how they only get paid if they get YOU to pay them when they push you and/or scare you..!
For all of you people out there trying to settle, trust your gut feeling, be brave and listen to Michael’s advise….and if you are not the brave type, hire him to help you…and most important…Do not hire a debt consolidation company, I almost did prior to finding this website..!
Good Luck and thanks again Michael..! 🙂
oh and another thing. Prior to all this happening yesterday, I told UCB that when I paid my settlement, I would like to do it with a cashier’s check, not with a auto w/d from my bank acct. She said that is not possible, it would have to be with an auto w/d from my acct. Today, it was a different story, I told her I would not be giving them my bank information and that I would be paying the settlement with a cashier’s check and she said “no problem”.. 🙂
Congratulations with both Citibank and United Collections Bureau Mary! And thank you for sharing how this all shook out with UCB. That type of practice is something that should be brought out into the open when it occurs. Citibank cannot be happy to learn of it, given today’s hyper aware regulatory and supervisory environment around collection practices.
Just a quick point of clarity for future readers – you cannot hire me – at least not at this time. I focus on publishing debt and credit guides centered on you helping yourself on this and other sites. There are a couple of specialists available here who still offer one on one coaching, and I highly recommend them. There are some reputable settlement companies around who charge no advance fees for people who just cannot, or will not, do the type of things Mary knows virtually all of us can do for ourselves (with some basic foundational understanding).
Those were the only two debts you were working through?
I called citimastercard as it appear on my credit report and they send me to call a debt collector he offer me since it has been over 6 years 2200 one time payment for the 6600 original debt. i paid them but i been approve for a mortgage and put deposit down but the underwriter will not sign off cause it still showing on my report as judgment not satisfied in the court and my credit report i have try to contact citicard and they tell me that recovery will call 3 to 5 business days and no one calls please help.. i may loose my deposit .
John – When did this settlement take place? Do you have something from the debt collector, or from Citi, that outlines the deal? Can you get proof of payment from your bank?
i have received pre litigation notice by sub urban legal service my amount is Rs 202630 i have no funds to re pay whole amount at same time how much period can i get for payment can i get emi option at this stage what shall i do
vinod – Where are you located?
I made an arregement with citibank to pay my credit card at 675 a month at a 9% interest rate i cant no longer do that the monthly statement says my minimum payment is 350
question if i start paying that amount will they hike the interest rate to say 15% because i broke my agreement
carlos – How long were you paying the agreed 675 a month? Were you behind on payments to Citi Bank card before you made that prior payment arrangement? If so, by how many months?
I have been paying for two years and no I was not late when I started paying them at this rate
Carlos – If the payment you make does not meat the minimum, or is not part of something they agree to, you can expect Citibank to trigger higher interest rates after 60 days, or after two missed billing cycles. If the amount you pay is less than the minimum required you could also see your account dropped into Citibank’s typical collection pipeline (calls from collectors etc).
You can reach out to Citibank and ask them about any payment options they have available on your credit card balance. Having been on the prior payment for 2 years may mean that you can still qualify for hardship payments that are lower than what you were paying prior, or could qualify for a repayment plan working with a credit counseling agency. Call Citi first about lower payment options, and if declined, call and speak with a credit counselor at 888-317-8770.
Post an update with what you learn. If no payment plan can fit within your means you may be able to plan negotiating a settlement with Citibank from here.
I was not behind what happen was that they decided to changed the interest rate from 15% to 26% about 2 years ago they game an option keep the card at 26% or turn in card and pay my balance at 9% until paid off I have about another 26 payments at this time but I had a pay cut there why I cant repay at this amount
Citi charged off my commercial account while I was attempting to work out a payment plan that I can handle after the line was close and accelerated because of the credit crunch. Citi transferred the account out to a firm that represents Citi.
I’m making payment to the firm now, but unfortunately for me every time I make a payment. Citi posts the payment to the account and reports it on my personal credit as a new charge off, every month. This is continually hurting my personal and business credit. I cannot afford to make a settlement offer at this time. Is there anything that can be done to stop this account from reporting as a new charge off monthly.
TJ – Citi can only charge off your account once. How have you determined that a fresh charge off is occurring monthly? Which credit report are you viewing? Is it appearing the same way with all 3 major bureaus?
Who did Citi bank place the account with for collection?
This same thing is happening to me. I’ve just found that each month Citi posts my account as Charged off. The payment that I’ve made to the attorney is showing up and each month it does it’s behind $40. I know have a balance (according to my credit report) of $40. That amount is now $0 based on my calculations. Here is an example of what this looks like on my report:
Date Opened:
06/2008
Date of Status:
10/2010
Reported Since:
07/2008
Last Reported Date:
03/2014
Type:
Credit Card
Terms:
N/A
Monthly Payment:
$0
Responsibility:
Individual
Credit Limit:
N/A
High Balance:
$3,224
Recent Balance:
$40
Recent Payment:
$90
Account History:
Charge Off as of Mar 2014, Feb 2014, Jan 2014, Dec 2013, Nov 2013, Oct 2013, Sep 2013, Aug 2013, Jul 2013, Jun 2013, May 2013, Apr 2013, Mar 2013, Feb 2013, Jan 2013, Dec 2012, Nov 2012, Oct 2012, Sep 2012, Aug 2012, Jul 2012, Jun 2012, May 2012, Apr 2012, Mar 2012, Feb 2012, Jan 2012, Dec 2011, Nov 2011, Oct 2011, Sep 2011, Aug 2011, Jul 2011, Jun 2011, May 2011, Apr 2011, Mar 2011, Feb 2011, Oct 2010 to Jan 2011
Balance History – The following data will appear in the following format:
account balance / date payment received / scheduled payment amount / actual amount paid
Feb 2014: $130 / January 22, 2014 / no data / $90
Jan 2014: $220 / December 24, 2013 / no data / $90
Dec 2013: $310 / November 20, 2013 / no data / $90
Nov 2013: $400 / October 23, 2013 / no data / $90
Oct 2013: $490 / September 23, 2013 / no data / no data
Sep 2013: $580 / August 20, 2013 / no data / no data
Aug 2013: $670 / July 23, 2013 / no data / no data
Jul 2013: $760 / June 21, 2013 / no data / no data
Jun 2013: $850 / May 21, 2013 / no data / no data
May 2013: $940 / April 23, 2013 / no data / no data
Apr 2013: $1,030 / March 21, 2013 / no data / no data
Mar 2013: $1,120 / February 21, 2013 / no data / no data
Feb 2013: $1,210 / January 23, 2013 / no data / no data
Jan 2013: $1,300 / December 21, 2012 / no data / no data
Dec 2012: $1,390 / November 21, 2012 / no data / no data
Nov 2012: $1,480 / October 26, 2012 / no data / no data
Oct 2012: $1,570 / September 24, 2012 / no data / no data
Sep 2012: $1,660 / August 23, 2012 / no data / no data
Aug 2012: $1,750 / July 23, 2012 / no data / no data
Jul 2012: $1,840 / June 20, 2012 / no data / no data
Jun 2012: $1,930 / May 22, 2012 / no data / no data
May 2012: $2,020 / April 20, 2012 / no data / no data
Apr 2012: $2,110 / March 16, 2012 / no data / no dat
So as you can see, each month it’s been reported as a CO. It’s like a double whammy because I also have the judgment sitting on my report for the $2,700. I’ve paid a total of $2,750 and I still owe the attorney $891….. 🙁 I don’t know what to do. They won’t settle for less than 64%.
I am not certain of what is happening to your credit reports based on what you posted.
It is true that you are getting hit credit wise with the charge off, and the judgment double whammy, but that is normal… unfortunately. And it does “look” like these payments are updating a derogatory account every month, but I would wait to offer more feedback until you can share what your credit scores are, and what other collection accounts you have, and whether there are recent updates (payments, settlement etc) with them too. Charge off accounts should only impact your score once, so it is possible you are seeing something that is not really impairing your credit per say.
Thank you Michael for answering. My score isn’t terrible (695) and I have one other charge off (paid).
One last question: If I settle for the $530 they offered, would I be able to have both accounts (judgment included) updated to reflect that the account has been paid in full?
what is important is that you kept your promise to pay with the atty. now if the atty wants you to pay around $900 first pull your credit report, because it should show the payments you have been making. There are many unethical atty’s out there that will put your money into their bank accounts to earn interest and in the meantime it is hurting you.
If you can prove to thExperian, TransUnion, and Equifax that you have made those payments, then I would let them know that you have been paying that atty and ask one of the credit reporting agencies what you legally can do. You can go to http://www.freecreditreport.com you won’t have to pay for the reports. While you are checking the report out make sure there are no other negatives or charges from companies you have never worked out. don’t stress everything will be good. you can also contact legal aid
I’m going through the same issue, It looks like they charge of my credit debt to an attorney. I’m a college student and my mom took out a credit card from citi bank when i was 17. She came up with the plan that she would pay the monthly bill so i can build up some credits for a year or two into I’m in college and have a job. We soon started having problem my mother wasn’t be able to pay in time the monthly bill. So it piled up and deactivated my account now. They at first gave my mom a plan so she would be able to pay the debt that we owe but at that time frame we didn’t have money. So now I haven’t heard from them and all I know from the last time I called them is that my credit debt was send to a attorney. I been trying to read them to learn how i can pay them off if i still have a chance or is it too late?
Yvette – When was the last payment made to Citi Bank? What is the current balance owed? Who is the attorney trying to collect, and are they licensed in your state?
Situations like these are too late, the bank do not withdraw the accounts. A person in a situation like this will have to deal with the 3rd party collector. What they can do is to hire their own legal counsel.
Catherine – I do not understand your comment. In my experience, it is nearly never too late to work out a settlement or payment plan on old debts. And no matter whether Citibank or a debt collector has the account. Even collection lawsuits are settled routinely.
Legal counsel is not required to settle or negotiate a debt. It can certainly be an advantage in certain situations, but also an unnecessary cost in others.
Hello,
I received a letter from citibank that stated my account is delinquent. Due to the status of your account, we may be able to settle your account for up to 40% of the current balance by 11-02-15
So my question is if i paid the 40% would ny balance still remain or will it be settled
Accepting the settlement offer on your Citibank account typically means you will not owe the other 60 percent.
I encourage you to read the last several critical reports I list about settling debtbefore you accept the deal.