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.
Michael,
I have been searching for information on debt settlement issues and questions. You have been so informative and helpful to those writing to you. I hope you can help me as well.
My financial hardship started end of November 2014 when my life partner stopped financially contributing. I am retired and live on fixed income of social security and pension.
I was unable to keep up with my credit card payments and began negotiating in good faith on settling credit card debt with four credit card companies: Citi, Chase, Discover and Bank of America. I was able to reach lump sump credit card settlements with Chase, Discover and Bank of America but not Citi.
I have (had) two past due credit card accounts with Citi. One is in the amount of $7,300.00 and the other $1,058.00. I have been negotiating in good faith on trying to reach a lump sum settlement on both accounts since end of November 2014 .
Back in May 2015, I offered Citi on the $7,300.00 account $1,500.00 that I was able to loan from a family member but they were only willing to settle for $2,931.00 which I was unable to accept. Similarly, I offered $300.00 on the $1,058.00 account with counter offer from Citi for $635.00 that I was unable accept.
Now both of my Citi accounts have been sold to two different Collection Agencies. I was never notified by Citi about this despite my regular monthly calls to them attempting to settle the accounts.
1. $7,300.00 Citi account
On July 24, 2015 when I called Citi about this account, I was told it is no longer with Citi and that it was sold to Atlantic Credit and Finance and is no longer owned by Citi. Subsequently, I received a letter from Atlantic Credit and Finance stating that “ACF has purchased or otherwise assigned (the “Account”) and it has been placed with Atlantic Credit and Finance, Inc. (“Atlantic”) for collection. I just wrote to Atlantic requesting a validation of debt.
My questions are: what are the steps after response from Atlantic and how do I go about settling the debt with them?
2. $1,058.00 Citi account
Today I called Citi about this account, I was told it is 160 days delinquent. The Recovery department informed me that this account was sold to Affinity Global to collect on behalf of Citi. I never received anything in writing and the representative I spoke said that from legal perspective Citi does not have to write or inform me about it. What are my next steps to resolve and settle this account.
Thank you in advance for your help.
You are going to have to try to come up with additional money to negotiate and settle the accounts. You are still looking at roughly 4k to settle the larger Citibank account balance that was sold to Atlantic Credit and Finance. There are lower settlement deals that can be negotiated with Atlantic, but I do not have enough info about your situation to suggest you target that as realistic.
I am not sure why you sent a debt validation request. You already verified through Citibank that they sold your account to Atlantic Credit & Finance. The barrier for Atlantic Credit to validate your debt is so low they can trip over it. Your request can sometimes backfire and lead to legal collection placement. Let me know what happens with this next, and then I can offer feedback about negotiating with them. You are welcome to call in for a consult too.
A realistic target for settling smaller balance accounts is often going to be 50%. You may be able to target less than that with Affinity Global. You will need to call Affinity to negotiate. Debt collectors do not often offer their best settlement deals when they first get the accounts, though there are exceptions to that.
There is nothing currently requiring Citibank to notice you of any debt sale.
Thank you, Michael.
What is the phone number to call in so I can give you more information?
You can reach me at 800-939-8357, choose option 2. If you get voicemail be sure to leave a message so I know to return the call.
Michael,
I stumbled across your web site after falling behind on my credit card payments and seeking some guidance as to how I should handle the situation if I can not pay my card bills on time.
First of all, I want to thank you for the great resource you are providing to people going thru’ a tough time and put into bad situations for good or bad reasons. Quite generous of you — so thank you for the services/free resources.
I had never missed credit card payments in my life until April of this year. I have had excellent credit history and had access to 0% offers from Citi, BofA and other cards for a long time. I have borrowed and repaid those in the past and I have been a good citizen of theirs until now. I live a relatively simple lifestyle and the only reason I had borrowed from these cards was to make investments.
Unfortunately, my levered investments have gone against me (I have lost my personal money and the borrowed money) and currently I have been out of work for over 4 months now.
I am more or less insolvent and I do not have any assets — the decision for me is to decide between: to settling with the card companies using funds from family members versus filing for bankruptcy. Currently/Still I do not have a job and there is nothing positive on the horizon (on the professional job front).
I have over $100K in total credit card debt ( lost in investment losses)– mostly with BofA and Citi.
1) After 4 missed payments Citi has moved my account to GC Services and they have offered to settle the card at over 35% — during the first call from them . I assume GC is a debt collection company working for Citi? Is there anything I should be aware of in terms of your experiences with them. I have offered to settle for around 25%. I assume it will stay with GC for a couple of months?
2) I am 3 payments behind and given that I have been keeping the them posted about my situation BofA has offered and is willing to settle for around 28% currently. However, that is still large sum for me and I am hoping I can settle for around 20%. The cards are with FIA card services/collection dept. currently. When do they send to outside collection agencies usually? I have already indicated my situation and made them an offer that I can settle at around 22% range by borrowing from family rather than filing for Bankruptcy…). What is the trade-off for BofA: in settling with me at these 22% versus selling it to other parties (If they know I am insolvent with no assets — I assume they will be reasonable and consider my sincere offer)? Do I risk any backfiring? Although, both the card company reps have been extremely sensitive to my bad situation and very reasonable in their conversations.
3) Given my bad life situation (and the fact that I am more or less insolvent with no/limited assets and large debt with a very clean history with the credit companies for 15+ years; — I am hoping that I can settle for less than 25% in both the cards. I assume that is reasonable based on my situation and some of the settlement trends I am seeing currently?
4) I could not locate sample copies of debt settlement letters anywhere (that you talk about in this discussion link/video — about getting the debt settlement letters. Do you mind guiding me to any sample letters that you have on the web site.
https://consumerrecoverynetwork.com/debt-settlement-letters-agreements/
(I could not find any sample letters with this article link)
5) I assume there are no liabilities afterwards once I settle this with their collection company or directly? Can they come back to me after few years and say, you settled your debt partially but now you have a job and income — so you should pay us the remaining amt? I guess, I just want to make sure I am safe and protected in future 100% — by settling with them this route versus a bankruptcy?
6) I assume it is okay to pay directly, after I have the letter, from a bank account (via direct bank transfer) versus mailing them a check?
Thanks so much in advance. Any brief responses you can provide (if you have any additional thoughts on above questions) would be appreciated. Or anything else that can help the discussions/my case in settling in favorable manner versus going the bankruptcy route.
GC Services regularly collects unpaid Citibank credit cards. 25% settlements through GC Services when the Citi account is only recently delinquent is not that common, but you do have some things going for you that could sway toward getting a deal closer to that. Yes, GC Services should have your account for at least a couple of months time.
BofA settlements at 28% are not that common any more, and especially with FIA card services. You do indeed have risks when holding out for lower offers getting approved. The debts being sold off to someone who will sue, or FIA suing. Given trends today, I would want to avoid those risks if possible. Here is an active page about settling with BofA and FIA.
Settling for less than 25% is rarely a realistic expectation these days. You do have some things going for you that enable the possibility, but those types of deals are not a gimme. You have done well conveying your situation to get to where you have the lower offers from BofA only a few months in, and Citibank kicking your accounts to GC Services early is a good sign. Keep up the good work and who knows what you can get done. There are exceptions to some of the hard floors for collections.
I have a page up with links to settlement letter examples. You can see I quit loading images of settlement letters years ago. Those examples are still instructive, and the page where I post an outline of what to look for in the agreements you negotiate is something you have already found.
There would be no later liability for the debts once you negotiate and pay the settlements. Be sure to keep the written agreement and access to proof of payment. Errors and mistakes can occur, but will be easily remedied with the documentation. I should point out that there can be a tax implication from settling debtsif you cannot qualify for insolvency exclusions. Discharging these debts in a chapter 7 bankruptcy would not result in a tax and would be the least costly path by far.
I do prefer paying settlements via direct transfer from an open account rather than mailing in checks, but either method will work.
Why is it that you are more in favor of settling versus chapter 7? What finance goals do you have in the next 3 years?
Thanks for the response Michael.
Couple of weeks after I posted the comments above, I have worked with GC (Citi) and FIA card services CS reps (at the end of the month/August) to settle the debt and I have the settlement letters from them.
Those letters cover the items you have talked about in your articles. Thanks for the sample letter/link in your response. Those helped as well.
1) FIA customer service was very understanding all the way (given I had never missed a payment in 15+ years and only borrowed the money at 0% for investment purposes (no recent activity or misuse and no spending binge on my cards ever)).
They settled at 25% — that is the lowest their reps had authority to settle and I was happy to accept and move forward.
FIA sent me a very detailed settlement letter (with BofA letter head) with all the terms and conditions laid out very clearly.
The letter states that after I complete the settlement agreement (pay as planned in timely manner) — they will report to credit agencies and it should show up on my credit reports after 60 days or so — as a ‘settled account paid for less than full balance.” I ASSUME this is the final thing I should look for as the end result for me? And that is the best reporting outcome for me for this route.
2) GC came down a little bit — and I did not want to drag it to next month and hence I agreed to settle the Citi at 35% (this was the lower amt. debt — bulk of my debt was BofA; Citi was less than 25K).
GC has send me the debt settlement offer letter (with 2 monthly payments that I had requested for). indicating the terms and the fact that Citibank will consider this account settled if I agree to this, which I agreed with them after I saw the letter.
They have also told me that Citi and GC services will send me a formal letter that the account has been settled/paid after they receive the payments in timely manner and then report it accordingly as well to the credit agencies.
Per them — this is their standard settlement letter template when they settle the debt for Citi. I ASSUME this is good enough (as a proof) and it is okay to proceed.
Thanks again.
My score currently has dropped to around 510. Once the accounts are reported as settled, how soon can I expect things to bounce up — and to what range? I have read comments/articles from you that it could take up to 2 years for it to go back in the 700 range?
If/when I do get a job — I was hoping to replace my 15 year old car with a better used/new one. Would I have access to car financing from auto companies let’s say in 6-12 months or that is likely ruled out even if I have a job/if I do?
Thanks again for the your time and efforts. You seem to have a lot of empathy for others.
Best regards.
Your credit reports showing accounts as settled and no balance owed any longer is typical. There is nothing else to hold out, or aim for in that regard.
How soon your credit bounces back is not something I can answer without getting more specifics from you. It can depend on a host of things. Are the Citibank and BofA accounts you just resolved the only ones to have ever reported as a derogatory on your credit reports?
Based on current auto financing markets I do not see you having trouble getting a car loan after a few months of the settlements being updated on your credit. The rate is not going to be great, but auto loans can be a good credit rebuilding tool.
Congratulations on your settlements with GC Services and FIA!
Thanks. No I do not have any other delinquent accounts — had none in the past (I still have have an active chase card and one other card).
Although, I have not checked my credit reports since my job loss and the situation above — but I have only carried about 5 cards in last 20 years. And everything has always been clean until this year.
Good to know that I will have access to auto loans in a few months, if needed.
One more question — I still have access to chase credit card with over $20 K credit limit un-used (I use it to pay for occasional small purchases like meals and groceries etc. — will that credit be reduced if they see in future my other cards settled for less than full).
Thanks again.
I have seen Chase (similar to other credit card issuers) reduce credit limits on accounts that meet certain risk profiles. I have also seen instances where they do not. The fact that the credit limit with them has not been lowered this long after you stopped paying your Citibank and BofA cards suggests it may not happen. The periodic review of your credit reports is likely to have been completed at least once by now.
Hi Michael,
I have an overdue credit card balance for a couple of years with citi. I am trying to negotiate the repayment with them. Anyway I would like to get some advice from you on how to better negotiate with them. My initial principal was $11,600 which has snowballed to $23,200 due to interest and other charges. So I have been proposing for a 5 years repayment term from $7,700 up to $9,670 however they rejected and counter offer of $23,200 payable over 5 years or $15,500 lump sum settlement. What do you advice to further negotiate on the repayment amount?
Is it Citibank you are negotiating with or a third party debt collector?
Can your raise money to offer a lump sum settlement if it was a good bit lower than the 15.5? Settling for a lump sum is ideal with old unpaid debts.
I understand when payments are the only option, but it you are able to raise money to fund a more reasonable settlement with Citibank it could save you potentially more than $10,000.00.
Hi Michael,
Thank you for the reply. I am negotiating with Citibank directly. I have problem raising the fund in a short term for a lump sum settlement. How much lower do you think I could settle with Citi for lump sum payment? What other alternative do you suggest?
I generally target settling with Citibank at 5o percent on the high side, 40% as a middle target, and far less if the conditions are right.
There are reasons banks dig their heals in on settlement amounts. Those reasons can vary from how long you had the account open, account activity, how collectable you are viewed today, or whether you have a branded account.
I would be better able to suggest alternatives if I knew a great deal more about your situation and goals. You are welcome to call in for a consult at 800-939-8357, choose option 2.
I had three past due credit card accounts with Citibank. All three were debts incurred over the same period and all three were debts via credit card checks. These three accounts all “charged off” two months ago. Two (2) were sent (assigned not sold) to an outside collections firm (UCB). These accounts with balances of roughly $8k and $10k eventually settled for 25% after submitting a hardship letter for each account. This is an especially low amount due to an extreme hardship situation and a massive total credit card debt over $200k.
My third Citibank account (approx. $25k balance) is still held by Citi’s Internal Recovery Unit. Usually it is tough to get past their India call center that handles the Internal Recovery Unit, but a few times I have been connected to the Internal Recovery Settlements Department. They are always polite and explain that the way this works is that I offer a low amount and they offer a high amount and we work to the middle. Unfortunately, this is not the case. I started with 19% and they offered 50%, I raised my offer to 21% and they went to 60%, I raised my offer to 22.5% and they went to 70%. There is a 2-4 week waiting period between each settlement offer (per their requirements- but this time frame seems to vary). I just recently notified them that my other two Citibank accounts settled for 25% and offered this same amount on this 3rd Citibank account along with proof of the other settlements. They countered with a 75% settlement offer.
Quite a frustrating process. Citibank has not attempted to call me about this account since it was charged off. It has only been me calling them to try to settle. Its seems that this has been a mistake.
To your knowledge, am I correct in my assessment that the Citi Internal Recovery Settlements Department doesn’t really have any authority to work up settlements?
And, do you know of any way to get the account assigned or pulled to an outside collections firm?
Or are you aware of any department at Citibank that I can contact to try to get to a settlement since the Internal Recovery Settlement Department doesn’t seem to have the authority to make a settlement agreement?
Thanks
Something is going on with your last Citibank account Tom. I would encourage you to call me at 800-939-8357, choose option 2, and I can dig a little deeper into the situation.
I have a home covered by Homestead Law in Florida (worth about $200,000). I owe Citibank and Chase unsecured credit cards about $45,000. My savings have been drastically cut due to medical bills and I can no longer make my credit card payments.
My question is: if I don’t file bankruptcy, can they win a judgment and place a lien on my home here in Florida?. I am retired and concerned about a lien because I wish to leave my house to my child.
Thank you for your help.
It is possible to have a lien placed on homes in Florida. I do not know if the exemption survives probate, but you can ask an estate attorney in Florida to get the answer you need.
I do not know what, if anything, would prevent you from passing the house on to your heir right now.
You also have the ability to settle those credit cards at favorable discounts with both Citibank and Chase.
Why is it that you want to avoid chapter 7? If you want to talk about the issues off line you can call me at 800-939-8357, choose option 2.
Sorry for the long post, but I have so many questions that are numbered below that I need help with-
1) Should I settle a $50K Citi card balance that has now been sold to a debt collector back inj December? It’s odd that Citi has never reported this account to the credit bureaus -which is actually a good thing since it has now been charged off. The debt buyer is also not reporting this as a collection and they don’t appear to overly interested in this because they freely share that it is not being reported. 2) Could it be that they can’t report it since it was not originally reported by the original creditor?
They were harassing me daily for the first 30 days, now I may get a call once every two weeks. I took the liberty of calling to offer to settle at $10K and they agreed after a few calls. I have asked for a letter of offer to review but I am not certain what terms to ask within the letter since it is not currently being reported. Basically, it will state Paid, Satisfied in Full. 3) If I pay the settlement, can they tunaround and start reporting this as a collection on my credit? 4) Can Citi all of a sudden report a charge off? 5) Should I hold out a bit longer to see if the amount to settle is less than $10K? My main purpose for asking to settle is that I don’t want to risk a judgement or lawsuit considering the high balance.
That is a really good settlement on a Citibank card, even with a debt buyer. Look for the details in their written agreement to accept less than the balance owed that I cover in detail here: https://consumerrecoverynetwork.com/debt-settlement-letters-agreements/.
It is indeed possible for the account to show up on your credit reports after you settle. Maybe the fact Citibank never showed on your credit reports for the card is related to a system glitch? If that got fixed, your account could suddenly appear as a zero balance owed charge off.
The debt buyer could later report too. Who is it that owns the account?
Having a paid collection and/or a charge off credit card with Citibank is better than risking being sued, which I agree has a higher likelihood (the balance being high is one reason, your being in New Jersey is another).
Hello,
I need advice. I was delinquent with Citibank credit card due to financial hardship in the amount of $14K. The account was forwarded to UCB in 2014. With juggling of other bills including rental I was able to pay off $6K. Doing this caused tons of stress on my health and fell behind in rental. I am now current but still need to continue making payments to UCB. I try to negotiate a suitable figure each month but doing this I had to agree to $475 in March more than I can afford but found the money. UCB agreed to extend from April to July for $280. I know I will not be able to come up with any more than that monthly after July. I am so scared. The creditor at UCB kept telling me the full amount should have been paid off as soon as they received the account from Citibank. What should I do? I do not want to fall behind in my other bills, especially rental. I live in NY. Please, please help me.
What would happen if you made no payments to United Collection Bureau and instead saved every possible dollar you could over the course of, say 6 to 12 months? How much money do you think you could pull together in a 6 month period to offer as a settlement on the debt?
After paying on time for many years, Sears decided to cancel my Store card and also my Sears Citibank Master. I live at my parent’s home on a small income of only $493 a month from a divorce pension and at some point my other sources of income decreased causing me to become delinquent and forwarded to the debt collection agencies. The Offers started coming but I was still unable to pay.
After my Sears Citibank Master went to the collection agency Midland Funding LLC , as plaintiff, it was then transferred to Law Firm who served me with a Formal Complaint Summons Judgement. I knew the damage was already done, my credit would be screwed, I still didn’t have any money to pay and so I didn’t appear in court.
Shortly and recently, my ex-husband has died and now I am getting an extra $1588 from Social Security. I have since been able to agree and have paid to the Collection Agencies to settled my other outstanding debts. Sears Store $1062 – settled at $550, Chase $1404 – settled at $280, Amazon $366 – settled at $219. Student Loan $6,200 with a $50 monthly payment agreement (in which I plan to pay off as soon as possible).
But the Citibank Sears Mastercard re Midland Funding LLC as plaintiff and purchaser represented by the law firm Forster & Garbus. A default judgement has been filed against me and the law firm’s letter dated Feb 2, 2015 is asking for a full payment balance due of $1,966.07 and then I recently received another letter dated on Feb 19, 2015 now asking for $2,201.07 – which is a difference of $235.00 in less than a month.
What should I do about this Judgement and do you think I will still be able to get a settlement from this Law Firm or are they going to keep billing me at these crazy increase amounts.
I see accounts like yours, where there is fixed income and little expectation that will change, settle for 50 percent and sometimes less, even when there is a judgment in place.
If Foster and Garbus will not play ball with settling your Sears account, you may want to call Midland Funding directly and talk to them about it. They will not normally get in the way of a contracted collection attorney, but could get your financial condition recognized as one they publicly state they give a great deal of consideration for either reduced payoffs, or tag as not collectable. See Midland’s consumer pledge for more details before you call.
I made a payment arrangement w/Citi Bank in 2010. The arrangement I made was that they would draft my account $150.00 and drop the interest to 0.00%. I called to ask for a statement and they became very nasty towards me and transferred me to I guess India and I could not understand anything the person was saying to me. I think my account should be close to paid in full but I can’t get anywhere with them. What should I do?
Can you confirm that your payments are being made directly to Citibank, or was the deal you reached with a debt collector working for Citibank? Also, for how long have you been making the payments?
Michael
Thank you so much for providing valuable advice regarding credit card debt. My question is in regard to my deceased husbands credit card debt. He died several months ago and had two cards with approximately equal balances…about 15k on each. I notified each of them of his death. One of the cards had absolutely no connection to me and has been turned to DMC. The other card told me when I called, that I was an authorized user. They subsequently sent a letter requesting my social and date of birth to add me as primary. At about the same time, I went to an attorney to have my will revised and showed him the letter. He advised me that both were due the proceeds of my husbands estate after his primary creditors were paid. I paid off his car, funeral expenses, medical bills etc and have 6k left. DMC agreed to the amount. The other card has added me as primary and continues to seek payment. I’ve no idea whether I’m liable for the entire debt, over the 30 years we were married we have opened and closed many accounts. I have no debt except a small mortgage. I do have credit in my name and continue to pay the balance in full each month. Any advice you can provide would be greatly appreciated.
You were not obligated to taken on primary responsibility for the other credit card debt. Which banks are these that you are dealing with?
What does DMC stand for?
What state do you live in?
I live in Texas and the card that has been turned over to DCM Services was with Chase Bank. The other which has added me as primary and sole owner is a Citi card. T
I would run your entire scenario by an experienced consumer law debt collection specialist. The Citibank account is what troubles me. Being told you must fill out co-borrower, or primary account holder transfer paperwork, is what I would focus on.
The type of attorney I would send you contact info to get in touch with will usually offer a no cost initial consult. Post the name of a nearby larger city and I will email you one or more attorneys you can connect with.
I would do that before getting back in touch with DCM services. I would not pay the settlement offer from them until you have a game plan on the whole thing.
Thank you Michael for your guidance. San Antonio would be the nearest to me.
Thank you so much,
I will ask the lawyer to call to settle, not sure if he will though. If you can recommend a NC lawyer it would be great, I have no idea what one would charge for a job like this.
I checked the comps around my rental properties and it might bring in $30-$40K in equity, combined. The judgement is attached to my name and it comes up when you do the Title search.
Thanks again for your help, I will let you know what happens.
I sent you an email with contact info to the NC attorney.
Thank you Michael.
Yes, I earn a solid income now, credit is the same as 3 yers ago, haven’t defaulted on anything since then. I bought 3 rentals 10 years ago, Interest only so no equity. The ARM is up so now that Principal is required, I can’t afford to keep so I need to sell them all. Citi is probably attached to the properties with the judgement, I’d like to settle with them before I list the houses for sale. Maybe give them the $10K cash and have another $5K total for them go monthly, that I could do too.(I’d preffer a one time payment though) I have no money in a personal account, paycheck goes to a Business account set up by a lawyer (Maybe let him call to settle?) Home is in my wife’s name and i drive a leased car.
Thanks again! George
I would not suggest speaking to an additional 5 k of monthly payments in this situation. Any reference to monthly payments on judgment debts, or affordable payments that relate to monthly income, will cause a logical leap to “if you can afford monthly payments on a portion of the judgment, you can afford monthly payments toward all of the judgment”.
Have you verified property liens? Is there truly no equity?
It may be better to have the attorney you like negotiate on your behalf if the fees are affordable. I can also refer you to one I know in NC.
Hi Michael, I’m still waiting on your input please. Thanks!
Missed your reply somehow a couple weeks back. You will want to contact the attorney for Citibank. A realistic target for settling at this late stage of collection is usually 50% or higher, unless you can lay out some convincing hardships, or can communicate a take it or leave it position like a pro.
Convincing hardships are often accompanied by the inability to earn an income, whether short or long term. You can also highlight financial hardships, with out necessarily speaking about the specifics, if your credit reports look like they blew up (many other unpaid collection accounts showing).
Take it or leave it is an approach that can often apply to someone who is not collectable otherwise. You live in one of a few states that do not allow wage garnishment. If you are savvy and keep money out of bank accounts in your name, they cannot levy your bank account to collect. If you have no property to place a lien on, that is ruled out, and I see little willingness by debt collectors to seek possession of your personal stuff.
How you convey the “take it or leave it” strategy is not something where you are cocky about it. It is the opposite really. Something like “I finally talked about my financial difficulties with family/friend, and have pulled together 9k to resolve my bills. I have other debts than this one, but want to resolve the biggest bill I have. All I have in the world is this 9k. Will you take it as settlement”?
Something along those lines. If they say no, you wait a month or so, and then call and offer it again. Your not in a hurry, and the amount of money you have access to has not changed, but you wanted to try again to be sure. They may not take that low of an offer, or they may counter along the way. You may never be able to settle for 25%, but may be able to add to what you can offer along the way.
I still do see lower settlements with Citibank accounts, sometimes in the 30 percent range, but they are non litigation accounts. The age of the judgment, and the state you live in, plays in your favor. What does your credit report look like? Do you earn a solid income?
Hello. I’m having a problem with a Citibank credit card that I opened when I was 18. The card was 6900 in credit limit & I charged it up, wasn’t able to pay since I had many other credit cards with high limits. I decided about 4 years ago that I wanted to file bankruptcy but ended up not doing it. Now I’m 29, and today I get a letter in the mail from a lawyers office in Nevada that a judgement was placed on me to garnish my wages. I didn’t even know I was being sued or had a case against me! My bankruptcy lawyers never informed me of Citibank trying to sue me. I’m concerned now about my wages being garnished and I’m wondering if there’s anything I can do. Should I contact the lawyer? I contacted Citibank today to find out when my card was charged off and they tell me that it’s still a revolving account and that I can contact the recovery dept. I’m confused as to who I should contact to make payments or make payment arrangements with since this letter informs me that a judgement has already been reached in favor of Citibank. I’m also confused as to why I’m still being pursued and sued for this debt, because this debt is exactly 6 years old, in Nevada one cannot be sued for a debt with a written contract after the statute of limitations of 6 years has been reached.
Look up the court record for the Citibank lawsuit. What was the date the judgment was entered into the record, and what is the name of the plaintiff (if other than Citibank)?
Hi Michael, Happy new year!
Before I call and try to settle, here are the facts:
In 2009-2010 I owed Citi about $38K on three different cards, couldn’t pay and they sued and got a judgement against me about 2-3 years ago. In NC there’s no wage garnishment so they’re not collecting or calling me. I’d like to settle but not sure who to call, probably the local law firm that I talked to last. Nothing is in my name and I don’t need credit but I have put together some money and I’d like to take care of it for the future. Anything you can advise me to do or certain steps I need to follow? Thanks a lot!!
I can offer better feedback if you post the name of the plaintiff that sued, if different than Citibank (Citi sells unpaid credit card debt to debt buyers like Unifund Partners, and others). Who owns the debt can impact my feedback. Also let me know the name of the debt collection law firm that sued on the Citi card. Some can be more difficult to work things out with than others.
Citibank was the plaintiff and the law firm was Bernhardt & Strawser PA, here in Charlotte,NC.
Haven’t heard from them since they got the judgement 2-3 years ago. I was thinking of calling them and trying to settle but it has to be no more than 25% since I owe them about $40K now…
Thank you so much for your help.
Thank goodness I found this website. I need some advice. I am 75, my husband 76. I just found out we have roughly a $30,00 debt (total) with Citibank Master card and American Express – my husband never really has shared financial information with me. On the advice of a lawyer friend, my husband contacted Davis Law Firm in Staten Island, N.Y. – he was contacted by Island Group Partners LLC, also connected with Davis Law Firm, and they have said they will try to negotiate a write off of at least half – $15,000 – maybe more, of these debts – at 10% of the settlement. I am very worried – He (husband) told American Express we were working with a lawyer – and gave the name – and they haven’t called us since. Husband also told Citibank this a couple of times – but we keep getting calls ( we just let them go to answering machine now, per Island Group Partners) from Citibank to contact them about our account. As a worrywart – I have read a lot now – are we in good hands? Don’t know what to think. Please, please respond – thank you.
I do not know anything about Island Group Partners. But if they are licensed attorneys offering to negotiate your Citibank credit card, and the one with AMEX, for a fee equal to 10 percent of what they save you, I like them already!
That is an unusually low fee in the debt settlement industry.
The settlement percentages they gave you expectations for, half or more off of what you owe on these credit cards, are also fairly realistic. Another plus in their favor.
How long are you going to need in order to pull together the money you need to pay the settlements?
Well, my husband is hoping to settle for half of the $30,000 we owe, and then have a payment plan to pay off the $15,000. Citibank keeps calling and calling – we don’t answer. Oh my, what a mess.
How long would you need the payment plan to last if you were paying 15k?
My husband said we could probably pay off the remaining $15,000 in one year.
Also – Citibaqnk keeps calling several times per day – although they have been informed we are working with a debt settlement firm. We just let these calls go to voicemail, they disconnect – but I am so worried they will sue us – what to do?
Without the ability to fund a settlement in a lump sum, or your debt negotiation attorney being able to get them to agree to a settlement with the longer payment term you need, you are at risk of being sued. But realize that is part of the debt settlement approach sometimes. Lawsuits can be defended, and you can even win. But when settlement is the goal, even if you get sued, an experienced debt defense attorney can draw that out for many months, or perhaps even a year, which would allow you to settle along the way.
The multiple calls per day is a bit of a concern to me. It is a form of harassment in some cases. What did your attorney say about those calls?
I received your latest comment via e-mail – but just replied to that e-mail as my comments after the one above and your replies don’t seem to get posted on this forum. Hope you get it!
I deleted a duplicate comment about having 15k in a years time.
I got your email. I would follow your attorneys lead on this. If the calls persist after another week or two, post an update. I will have a suggestions from there.
Thank you so much, Michael. I finally feel I have someone in my corner! Judy.
We have a debt with Citi bank that was discharged in a bankruptcy settlement . We have called Citi bank for a letter of satisfaction 3 times in the last week and have recieved nothing but a run around. They keep saying it will be 3 to 5 business days . So far no one has returned our call. We have asked to talk to supervisors then they transfer our call to someone in India. We have the court docket numbers and the court documents but they won’t talk to us long enough to get it. We have to have this letter to purchase a house. We sent them a letter a year ago asking to get this letter and never heard from them. We have to have this before the end of the year. Please help us!
Is it that Citibank is on your credit reports in a manner that fails to show the account as part of your bankruptcy?
Can you share more about the issue?
Hello Michael,
I used to have 2 Citibank sears card that were charged off back in 2005. They are already drop from my credit report. However, Citi approved me for a credit card 4 months ago. But they just closed my account saying I had charge off’s from almost 10 years ago that’s why they cant allow me to have a card with them.
They sold both accounts to outside collections so they are telling me that I cant even pay them at this point. What is the best course of action to take? I really don’t want to lose the card that I had with them. Do you know how long will my charge off stay in Citi Banks systems?
Ill appreciate your guidance. Thank you
Alex
It is possible that you will be declined for Citibank credit cards forever. American Express has kept a black list like this, and anyone getting another card from them is unlikely.
Is there a reason you want the Sears card particularly (rewards, offers)?
Hi Micheal. Im wondering if you would be able to offer me some advice. Over 4 years ago i went through a messy divorce resulting in me being left with nothing other than a car. In that following year i managed to get my self into alot of debt. (Therapy, bills, Children and attempting to start a new life). I had credit cards with Discover $16000 Chase 15000 and spirit around 15000. After being harrased by my ex at work i eventually lost my job. Things got to much and i left the country. I have dual citizenship and now reside in Europe. For 3 years i have not been back to the states and never had any contact with my creditors. I am now working and finacially stable. I would like to visit my family in the states and deal with any debt i left behind. My question is can i be arrested on my return for my debt. Im not sure if a cour summons or anything can be served when im not in the country. Secondly how can i find out if my debt has been sold. I no i really left a mess behind but i was in a bad place. Im doing good now and would like to take care of my debts.
You will not be arrested for your unpaid debts entering or leaving the US (even if you were sued without your knowledge, and judgments entered in the court).
Lets get started finding o0ut what happened with those old accounts. Pull a copy of your credit reports. You can buy a copy from any of the majors, and also are entitled to a free copy from each every 12 month period at http://www.annualcreditreport.com.
How does your credit report show the balance currently owed on the Spirit, Chase, and Discover accounts? If there is a zero balance owed, they are likely sold to debt collectors. If there is a balance reported owed as of today, you may still have to work with a collection agency to resolve the past debts.
Post what you learn and lets go from there. Given how old these debts are, I would encourage settling with them in order to resolve the debts, but while saving as much money as you can.
Hi Michael, Sorry for the late reply. I have been trying to get a copy of my credit report but because i dont have an adress based in the USA i dont seem to be able to get a copy? Is there anything else i could do to recieve a copy of my report?
Thanks so much!
Sienna.
If you have tried doing that online through that free web site I posted above, and hit that address snag, you can also try your request through the mail. Another free resource I like is available when you use the credit report card tool at http://www.credit.com.
You may want to try purchasing a 3 in 1 report directly from one of the bureaus too.
Hello I just received a summons from discover card stating I owe $4500. I don’t deny what I owe but I don’t have the money to pay in full due to circumstances within the year. I’m now currently single supporting two small children with only one income. Discover card back in may 2014 has called me over 30 times a day and that’s no joke. I’ve had discover for nearly 15 years and had a balance of close to 11k.
I do not want to go to court. Is it still possible to work with discover to come up with a settlement?or has my ship sunk. I have 20 days to answer the summons. Any help would be greatly appreciated.
If Discover would accept a settlement, how much money could you raise in a lump sum single payment right now?
What state are you in?