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.
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.