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
Short answer
A pre-litigation reference from Citibank can mean nothing of consequence, or it can mean your account has been flagged for placement with an attorney who may be authorized to sue. Creditors use the phrase as an effective tool to get a payment out of you, but some accounts really are selected for immediate legal action.
Key points on this page
- At charge off, Citi does one of three things: assign the debt to a collection agency, sell it to a debt buyer such as Unifund, Portfolio Recovery, LVNV or Midland, or send it straight to an attorney collector in your state with authorization to sue.
- You will know whether the pre-litigation wording was a collection ploy as soon as you see who the account was placed with.
- Accounts get fast tracked for legal collection for reasons such as recent cash advances, balance transfers or large transactions just before default, sending a canned letter pulled off a website, paying other cards but not Citi, and even the affluence of your zip code.
- If Citi withdraws a long term repayment plan, a nonprofit credit counseling agency can often get a similar plan approved, usually with a lower interest rate and across all of your cards at once.
- Do not enroll in a repayment plan you are skeptical you can pay every month for the full term.
- If there is no realistic source of funds to settle, look at your options with bankruptcy. It is often better to be in court on your terms, with your own attorney, than on Citi’s terms with a collection lawsuit.
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 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.