What to Do When a Credit Card Bank Refuses to Settle Debt
I have a Barclay's credit card I defaulted on that is 6 years old. The balance started at $1200 and is currently $922. I have missed payments off and on for years and only in the past year have I started making the minimums consistently. The minimums are about $20. I started making payments when I could again, because they said they don’t settle accounts. Even when I couldn't make payments, they said settling is not an option. So now, it says at my minimum payment rate, it will take 7 years to pay this off. Can I somehow get them to settle??
I also have major IRS issues, (paychecks were garnished last year) and I’m in the process of negotiating with them, the state and city. I live in NY, but my IRS/City/Fed tax issues stem from Philadelphia. I am self-employed. Thanks in advance.
What to do when a credit card company (Barclays) refuses to settle?
—Lori Mazur
What you describe about a bank refusing to settle a credit card debt, or where a customer service rep says they do not settle, is not uncommon. I will break down what is likely happening in your situation with Barclay, and how this generally applies to anyone who gets the same type of response from a credit card issuer.
Barclay Bank Refuses to Settle Credit Card Debt
Settling credit card debt successfully is a matter of timing. In month one to three of missed payments you will get collection and reminder calls about your bill being past due. You may even be proactive and call your credit card bank yourself to let them know you are working on ways to get caught up. Whether you receive a call, or make the call in the earliest days and weeks of being late, you are typically going to be talking to a bank employee whose training to deal with an account holder is limited to first tier payment turn around options. What does this mean in practical terms?
- Customer service reps at your credit card bank are generally only able to work with you in limited ways to get your payments back on track. They are not part of the banks internal recovery department. With some credit card banks you cannot even connect with a recovery specialist until you are more than 90 days past due.
- Calling into some banks like Barclay when you have only missed a payment, or even 2, may not yield any meaningful discussion about your options to settle your credit card debt for less, not because Barclay does not settle credit card debts, they do, but because your account is not behind enough to:
- Allow the bank rep to discuss settlement.
- Calls are routed to the banks first stage delinquency staff for the first 30, 60, or 90 days that are trained to say they do not settle.
The first tier of bank reps may offer limited payment plan options that could help you get back on track that are discussed in this article series: https://consumerrecoverynetwork.com/hardship-payment-plans
Settling Credit Card Debt Means Falling Behind for 90 Days or More
Credit card lenders like Chase, Bank of America, Citibank, Wells Fargo, Barclay and the rest, all have the OCC as their primary regulator. The OCC provides guidance to banks on what to do when offering payment concessions to credit card holders. There is a ton to talk about with regard to this oversight, and how I see parts of it as short of sight, but that will be for another post. For now, just know that the limitation placed on banks for dealing with unpaid credit card debt by their federal regulators does have a major impact on how banks work with a person struggling to pay credit card minimums. Generally speaking, your window to resolve and settle credit card debt with your original lender is six months by design. For more on this 6 month time line read: https://consumerrecoverynetwork.com/credit-cards-debt-settlement-why-banks-do-it/
When you are dealing with a bank like Barclay, and others, who tell you there is no option to settle the debt in the first couple of months, and you know that the bank will settle when you are closer to 6 months behind, you have to wait it out. There are variables to this from one creditor to the next, but this 4th to 6th month of credit card delinquency is where the vast majority of credit card settlements are done when arranged and agreed to by the bank internally. Some banks are just better at telegraphing and working with their card members than others.
Is there a possibility my credit card lender will refuse to settle with me?
Yes, there are instances where a bank will flat out not settle a credit card bill with you in the first 6 months of nonpayment. Banks do set internal policies where they refuse to settle accounts that are too new, or when an account is suddenly maxed out followed immediately by payments stopping etc. For more on these and other reasons banks will not settle, or offer to settle at the best savings, see: https://consumerrecoverynetwork.com/credit-card-debt-to-include-in-settlement-plan
There are also internal creditor trends that change over time. Banks do tweak collection and recovery protocols. Some examples of banks internal policies that impact whether they settle credit cards in the first 6 months of delinquency:
- Credit card payment defaults spike due to an economic downturn as we have seen from the great recession we likely never left. This has led to banks with banks with previously tough protocols for settlement (AMEX, Discover), to soften them for a time.
- New management and leadership is transferred to the credit card recovery department and they want to shake things up and show they have the secret sauce to get better recovery percentages. Citibank is a good example of a bank that has regularly shaken up its recovery team leadership.
- Past policies were seen as too lax.
- New legislation or regulations.
Regardless of the reason a bank may choose not to settle your credit card with you directly, you know from the link above about why banks settle, once they place the account in the collection pipeline, settlements are most often obtainable regardless of account behaviors with only the most limited exceptions.
How to Settle Your Credit Card Debt
Look to settle your debt with Barclay, or virtually any other credit card issuer, between 90 and 180 days. This is the optimal time frame for a host of reasons. If you cannot get a deal done before 180 days, you can settle with a debt collector or collection agency, the debt buyer who picks up the debt on the cheap, or even a collection lawyer, later on.
Barclay does settle credit card debts regularly and has for as long as I have been around this industry. I have some questions for you that would help me provide more feedback specific to your situation. But before I get to those I want to thank you for moving this discussion to a new and dedicated post about banks refusing to settle credit card debts. Having a dedicated page for this topic will help other site visitors not get lost in the settling credit card judgments page and the nearly 600 comments over there.
Questions:
How long ago was your most recent payment made to Barclay on this account?
Did your credit card account ever go more than 90 days past due without some sort of payment being made?
Were you ever in contact with someone collecting on this debt other than Barclay? If so, who was that and was there ever a payment made related to any of this type of collection effort?
Please post your answers in a comment reply below and let’s go from there.
Anyone with concerns or questions about the above content is welcome to post in the comments below for 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: I got injured at work so I can’t make my Barclay’s Credit Card payment nor pay my bills after getting injured on the job. I have paid on time my Credit Card bill since 2013 and want to know if the bank I got my Credit Card will freeze my account? I have a Pension that is directly deposited on the first of the month so is this true? I may get Workman’s Compensation tho’ this takes time. I have $30 to my name so knowing this should I move my banking account as i need this small pension to live and pay my essential bills. I have worked almost two years posted as a Mobile Beach Patrol Guard, always on time working 12 hour shifts and from 15 – 17 hour days/nights now I want to inform Barclay’s but the call is sent off shore so it’s a waste of time. It was a Set-Up to terminate my employment so I’m trying to file with the EEOC since I’m being discriminated and harassed by this new boss a “local” born in Hawaii but no one drop of Hawaiian blood.
I am a Whistleblower so my NEW boss wanted me to work at a worksite under construction when I post at the beach so I didn’t get paid for the training and declined this “job” finding out later it’s a Transfer s I would lose my good job which has already been filled by another employee. I didn’t take this “job” offers no shelter, no restrooms and no water all essentials an employer must offer so HIOSH will be investigating for Retaliation next week and have NEVER been late paying Barclay’s in 11 years. I don’t want my bank account FROZEN.. I also called the Whistleblower’s Line in my company since I was threatened by the H. R. Manager (not local just Caucasian) to terminate my employment after getting injured on the job and says in her last text that if I don’t go to the Meeting she’ll consider my resignation so Hawaii is a 3rd country. Yet she was in another Meeting so she’s claims I canceled the Meeting when I didn’t as I was in the ER she was at another Meeting after she phoned me at 9:00 p.m. to confirm the Meeting by then feeling sick I was already in bed. So far the “At Will” employer has Won! My boss has offered me a NEW Transfer so when I asked her some details about the job mainly what are the hours now the job has been filled when I called the worksite no Security Guards are posted at this sight.
Again, I got Barclays through my bank so my main fear is they’ll FREEZE my Account is that correct? I may have lost my job where they hired a NEW “Karen” who wants to fire me for no just cause in an At Will State so I’m fighting this and trying to find someone at Barclay’s to help me. I am a widow so I am on my own. I live in Hawaii so please write back Thanks, Star
I have not seen Barclays try to take money out of a checking account when one of their credit cards is not paid on time. I typically only see that risk if they sue, get a judgment first, and then get the court to agree to a bank levy.
I do see what you are concerned about from time to time, but typically with a credit union, or an occasional business account with a cross collateral clause.
You could change banks as a precaution. You would typically want to anyway, if you were to later be settling the Barclays credit card for less, or file chapter 7 bankruptcy to get a fresh start.
I have a Barclay debt that I am trying to settle. It has went to a collection agency that I can’t seem to find. All I have is this 866-415-2399 does anyone know this debt collection agency? Thank you
Also does anyone know who FINANCIAL RECOVE DAILY DEP ? Which agency is this ?
I would call Barclays and ask who they sent your account to. They will tell you, and typically provide the contact number to the agency or debt buyer.
Glad I stumbled on this article; I had used their website at 60 days past due with Barclays to see if I could get on some kind of hardship plan and was immediately denied. I am now 90 days past due and have already gotten an email about “exploring settlement options” from them, so hopefully they’ll be more willing to work with me?? Does Barclays ever offer converting the card to a loan and lowering the apr that you’re aware of?
I would not expect that to be an option with Barclays.
My situation is different,I have a card that was charged off shortly after a divorce where ALL my credit cards(work included) were maxed when a rookie Judge listened exclusively to a “ambulance chasing” divorce attorney,ordered me to pay his $20k to look at 5 years of bank records,tax returns and credit card statements. I had to or lose partial custody of my son. Twenty days later I was down $22500 and my scores went from 720 to not being able to get a piece of gum on credit,157 point plunge. Now Barclays card, a charge off from 1-2018, had card since 4-2018 keeps giving me the we’ll get back to you with a settlement offer in 7-10 days. This is the third time I trying it in past 45 days,no luck so far.
That is a bit odd. Does Barclays still show on your credit reports with a balance owed as of today, or does the balance owed show a zero?
I had 2 credit card accounts with Barclay’s. One for everyday use and the other for Apple Computer purchases. We purchased 2 Apple watches and paid them off in full. We then called Barclay and cancelled the Apple card.In fact, we over payed them and they had to refund $28 which we got as a check about 2 weeks after closing the account. A month later we got an invoice for the Apple card account and a letter saying that they closed my OTHER Barclay card…the one we said we wanted to keep! In the meantime they added a late payment fee to the Apple card, and each time I got a new invoice with additional fees, I called to tell them about their mistakes and they assured me that they would make it right and get back to me. It’s been 4 months now and they continue to add late fees to the account that I asked to be cancelled back in December 2020. In the meantime, my credit rating has dropped from 805 to 725 because of their reporting a failure to pay their late fees on the account that they refuse to close. I am VERY reluctant to call them again for obvious reasons. I just got another invoice for $180….all fees for non-payment. This is after sending in a complaint to their “Card Services” department via certified mail with all documentation of relevant statements showing the mistakes they made which caused this mess. All I got in return was a form letter saying I should call their customer service number. My wife wants me to pay the fees, but that’s just extortion and it’s money we don’t owe!
I would file a complaint against Barclays with the CFPB. More on that here: https://consumerrecoverynetwork.com/filing-complaints-with-the-cfpb/
You may also want to talk with an experienced consumer law attorney in your state that handles FCRA and FDCPA issues.
Have 2 Barclay’s cards-been charged off about a year. Back in 11/20 offer was 70% off, could not do it then, wish I had. Now for nearly a year the debt has been with (bone?) collectors, Capital Management Services LLP Buffalo NY. I have attempted to settle for the 30% that Barclay finally offered (for nearly 10 months to present).since terrible timing my various cancer prevented me from responding to initial Barclay’s offer. (Das?) Capita Mgt.Has stuck to 45% off saying that Barclay’s won’t allow less. Makes little sense to me. Now Cap Mgt says that the debt will go out of their office. In about one week and will go back to Barclay Bank. The entire debt on the 2 cards is $14,677-Cap Mgt. will settle for no less than 45% off=$6,605, my offers of 30% and finally 37.5% ($5500).fell on def ears. (I never quoted percentages as per your advice only hard #’s) Since I have waited this long, should I wait a week or to then contact Barclay to see if the will accept 30% still ($4400) or splitting the diff. ($5500)? or should cave & pay the total of $6604.82 to Cap Mgt. now? I can really use the extra savings but don’t want to risk even harder ass “Bone” Collectors! Thanks, Ron
When Capital Management Services sends it back to Barclays you have a shot of getting Barclays to approve the settlement offer they made prior.
The risk is that you do not connect with Barclays in time before they send the account out again for collection, or sell your account to a debt buyer, and miss the opportunity to get the better deal.
Debt buyers getting your Barclays accounts typically means settling at a higher amount, and also the risk of being sued.
If your account gets sold, or sent to another collector, you can post an update and we can go from there.
I never missed a payment with Barclays and I always paid $350 on a debt of $13,860. I had this card for 8 years and paid it off. But, some emergencies happened within the past 2 years, where I charged the card to $12,680 with an interest of 19%… as of recent this month the card has been paid down to $10,131. Unfortunately, I recently lost my job & can’t make the payments on this card. I tried to contact Barclays who stated they are unable to settle at this time. I have a loan and 2 other credit cards that are manageable, but Barclays is the issue. I can no longer pay this card anymore.
Banks are typically not open to settling debt when you are current with payments.
You have to be late several months to get the best settlement outcomes.
Assume you were able to settle with Barclays when you are 5 to 6 months late for between 30 and 45 percent. Would you be ready then? Would you need more time than that?
Hi Michael,
I have an account with Barclays that shows up on my credit report as charged off. Balance is $6,308. On my credit report it shows as Account is charged off $5,471 written off. $6,308 past due. the last payment I made was May 19, 2017. I have called Barclays to try and settle the account but the rep says they don’t settle and I can’t get passed that. it appears as Barclays still has the account and hasn’t sold it to a collection agency.
Do you know of a specific phone number I could call to reach the collection department? or am I too late to try to settle, and just wait it out per say. I live in Florida and it’s 4 years SOL to sue, and I’m coming up on 3 years
Thanks for your assistance
This can happen on some files.
If you want help, we do that. The fee is 15% of whatever you save in the settlement.
You can click the Get Debt Help tab and start your user profile.
I have 3 cards with Barclays, two of them I have been paying on – as agreed in divorce settlement 2015. The other card was assigned to my ex-h. He stopped paying the third last May and filed BK in Nov. I spoke with them several months ago regarding the division, and that I didn’t have the money to pay for his debt (current balance $4142). I understand that they don’t care about divorce settlements, but I don’t have the money in my budget to pay them. I have continued to pay the other two cards – one I use and is not getting anywhere, as I have living expenses on it, and it’s accruing about $124/mo interest. The other card is at $2130. How should I approach requesting settlement? Should I just ask about the unpaid card?
Can you pull together 35% of the balance owed on the ex’s Barclays card? How soon will you have the cash available?
Barclay card said I signed a convenient check last year which I didn’t. They told me they were going to mail me a copy of the convenient check to see if I really signed the check by my signature and handwriting, that was August 28 and they have not done that.
What should I do next?
Call and request they send it again. Take good notes of all dates, numbers called, and times you speak with Barclay, whether in the past or going forward. You might need that information in the future.
Hello,
I owe US Bank for two credit cards and the total for both is over 11,000. I have been in recovery over a year now and they have not sent me to collections yet. Why not and what should i do because I have a company working with consolidating all my other credit cards but US won’t send me to collections. Help please!
It likely has to do with the company you have helping you consolidate. Who is it you are working with to resolve your other debts?
hi
my credit card dues are pending from last 6 years iam getting calls from debt collector but they are not providing any statement and i am not in a position to settle what they are demanding
please can u guide me how to approach and settle the dues at lowest possible settlement,is it possible to approach bank directly
Have all credit card bills gone the 6 years without a payment being made? What state are you in?
I have a question. I have a large balance with a credit card company USAA of $22,000. When everything went down with the new credit card laws my minimum payment jumped almost $250 a month. I couldnt/cant afford the mimimum payment of around $350 a month. I called and spoke with them, they connected me to an internal department, advised me to cancel my account and placed me on a payment plan of $125 a month for a year. The year is over and I called because my minimum payment went up. I still cant afford the minimum payment. They told me there was nothing additonal they could do for me…… Nothing, I either pay the minimum or get hit with the penalties. I just find it really hard to believe a bank wont work something out with a customer that is trying to pay them. I have never been late on a payment and I am the one who has called them asking to set up a payment plan because I couldnt pay the minimum. The rep I spoke to just kept saying you have to have the balance paid off in 5years. I told her I would pay for ever if need be, but I could only afford the $125 a month. I dont want to have to file for bankruptcy but it seems like I am being backed into that corner. Any suggestions? Thank you.
You are being backed into a corner by bank regulation as much as USAA credit card policy.
When banks offer payment concessions they are limited by OCC guidance. Those 5 year 60 months credit card payoff parameters are part of regulator guidance, not something USAA came up with. And the bit about only having the one 12 month span of payment relief to offer you, that cannot be extended, is also not necessarily an internal policy of banks, but more limitations on them.
Paying the roughly 350 a month to USAA to fit within that 60 month plan sounds like it is off the table. Saving up to settle with them for a much lower lump sum amount, after you have not paid them for quite some time, is another option. But saving up the 125 a month is too little, and would take you too long to come up with a realistic settlement offer. That leaves doing nothing for now, or filing bankruptcy, as realistic alternatives.
might be 4 years no. no payment how do you settle with them when it is a charge off on report, and you want it off of report… and the collection people won’t settle with you…. except for full amount which is not what is owed.. need a job, this is stopping me..
You generally cannot settle and demand the collection entry be removed from your credit reports. If you went about negotiating with your debt collector that way, it is not surprising they would refuse to settle the account.
Who is the original creditor, and the debt collector now?
What is the balance owed?
Are you applying for a job in financial services, or that requires a background check?
Were you told specifically that this collection appearing on your credit report is the reason you could not be hired?