Hi all, I'm looking for some advice: I recently got a letter from Citibank that unless I make a payment of $20 within several days, the account will be charged-off. I would ideally like to try to settle the account and have them sign a letter stating that they will report the account as in "Paid as Agreed" but I know that may take time. My question is - If I call them and begin talks/negotiations, do they have any power in delaying the account being charged-off, or is the $20 payment the ONLY thing that will prevent it from being charged-off? I ask because I realize that if I make the $20 payment, it shows that I am really worried about the charge-off (which, I am) and will greatly weaken my bargaining position. Thanks.
You would like to settle the account how? By paying the full amount or settling for less than the full amount? Credit is a terrible thing to waste. I would send them the $20. Better than having a chargeoff notation on your report. Maybe you can elaborate more about the details (i.e. how much you owe, is the account open or closed, etc.). I'm assuming that you don't owe much if they are requesting only $20 to keep the account from charging off. Or was that a typo?
Thanks for the reply, MP$40. The amount owed is $1300. I have not made any payments for about 6-7 months, and I'm not certain but I think that the account is still open. They are asking for (only) $20 to "avoid this Charge-off of [my] account and the possibility [they] will turn the account over to a collection agency." I would like to settle for less than the full amount, but if they are willing to report to the CRAs the the account has been "Paid as Agreed" unless I make full payment, then it would be a remote possibility depending on negotiations with the other credit cards. The problem is that my current debt on my six credit cards alone is about $20,000 (of which one credit card has already been charged-off -- please see http://consumers.creditnet.com/straighttalk/board/forumdisplay.php?s=&forumid=3 if anyone can offer any advice there as well.) Though I would more than love to settle the full $20,000 and restore my credit to "paid as agreed", that is plainly not an option (and I would not be here in the first place). My current and future prospects are not very good, and barely making minimum payments for the next 20 years to pay off this balance plus interest, is disheartening. Even if I did settle this account for the full $1300 and have it reported as "paid as agreed", if the rest of my accounts go into charge-off, then it will have been in vain. I think at this point most of the credit card companies are willing to settle for less than the full balance (but probably not with "paid as agreed"), but I'm not sure if the damage has already been done. I do not want to declare bankruptcy, both because it will cause financial havoc for at least 10 years and also for strong personal reasons. Whatever situation I am in, I know that the responsibility lies with me. I would like to settle fairly with the CC companies, but at the same time I would like to do as much as I can to start the process of rebuilding my credit.
Sounds like a tough situation, indeed. Whatever you do, remember that if the charged-off amount is above $800, the company will send you an IRS 1099 form that you must report as income. So, you will be taxed for whatever amount they write off above the $800. I'd pay the $20, myself, and do the best I could on a month to month basis. Even if the other cards get charged off, one less card in that list is better than having it there. Have you thought of consumer credit counseling? best wishes,
Thanks breeze and marci, for the replies and advice. (I have two accounts w/ Citibank, and the other account is probably due for Charge-off very soon as well.) Has anyone had any experience settling with Citibank (or First USA, Capital One, Discover, MBNA for that matter) and getting them to report the account as "Paid as Agreed"? Did you have to pay the full balance in order for them to report the account as "Paid as Agreed"? Or is getting them to reflect "Paid as Agreed" not even a realistic possibility?
Try asking Citibank to change it to a closed-end loan (installment agreement) with a fixed interest rate, and indicate your willingness to pay. Explain whatever the circumstances are. They aren't out to get you, they should be willing to work with you, if you can pay anything within reason. But this will stop the high interest and late and overlimit fees that can bury you forever. breeze
I think you'll have a difficult time negotiating a settlement in exchange for a paid in full notation. I understand that you are in credit trouble right now but just remember....you've got to keep something. $1300 to Citibank is peanuts! I would just send them $20/mo (if you can) just to keep the account active and in somewhat of a good standing. You'll need this account later when you start to rebuild from your credit travisty. Don't feel bad. I was in a similar situation and the balance on my Citibank card was $800. The minimum was $20. I use to just pay the minimum and then use the available to buy gas or whatever. Then later on down the road I had to let a couple of accounts go for a while but then decided to balance transfer some to FUSA to save my credit rating. I paid them and Citibank the minimum for a while until I got on my feet. I wasn't going to let Citibank go no matter what! They were my first credit card (along w/ Macy's). I'm glad I did what I did because now that account is the main pillar on my credit reports due to the long (since 92) perfect history. I rebuilded around them. Is there anyway you can some sort of consolidation loan or something? Credit counciling perhaps???
As MP stated - it's gonna be difficult. You likely will not be able to get "paid as agreed" unless you ... pay as agreed. You can get accounts marked "Settled". The general guidelines (from what I've seen) -- original creditor - 50% and up; collection agency (on commission) same; collection agency (distressed debt buyer) - 20%. The problem is, settled looks as bad as BKY and most mortgage companies will require you to clean-up settlements prior to closing. Settled accounts last 7 years, BKY 10. BKY may become significantly harder to do in the coming months, BUT...if you situation is as dire as it sounds (making $20/month payments "forever"), then it may be an option. It's a difficult decision, and one that will affect you for 10 years. Consumer counceling may be an option, but I don't know a whole lot about that (anyone with experience care to comment?). Citibank is reasonable to work with, but if you have a whole lot of creditors, you could be spending a whole lot of time talking and sending budgets to them, whereas CCCS helps to consolidate the number of contacts and pieces of mail. I don't know much else I can say other than to weigh your options very carefully. Explore what you can do to pay your debts as agreed. See if they will knock-off accrued late fees and lower the APR% to something humane if you do make payments. good luck- mj
Thanks again, breeze and MP$40. mj - thanks, and a couple questions: --"You likely will not be able to get "paid as agreed" unless you ... pay as agreed. " Do you mean that if somone paid off the account in full, after 6 months of non-payment, it would be likely to negotiate a "paid as agreed" credit rating? --"You can get accounts marked "Settled". The general guidelines (from what I've seen) -- original creditor - 50% and up; collection agency (on commission) same; collection agency (distressed debt buyer) - 20%. The problem is, settled looks as bad as BKY and most mortgage companies will require you to clean-up settlements prior to closing. Settled accounts last 7 years, BKY 10." If "Settled" does look as bad as bankruptcy, it seems in general that there is not as much of a positive reason for settling (vs. bankruptcy), except that it disappears off the credit report 3 years earlier than a bankruptcy.
*If* it's still an option for you, transfer your balance from Citibank to another card. The reason is, Citibank keeps black lists of those who didn't pay in full. (This I believe includes even settlements). Once you are over this, and your credit is restored, you would probably want to be their customer once again. Therefore, if possible, you'd better pay them off and owe that debt to some minor lender you can afford to never bank with again. Saar
Breeze: I have not read all the posts in this thread yet as I fully intend to do, but out of the ones I have raad so far, yours makes the most sense. The major problem here is not so much the amount of the indebtedness, but rather stopping or putting a cap on the interest and panalties that will bury him forever if he don't do something about it. But leaving the situation as it is would be totally unacceptable in my opinion. If they won't work with him in the way you suggest but want to keep their end open, then he might just as well take the full hit and shut the junk fees off that way. So far, this looks like a tough position to be in. I'm gong to read on and may comment further down the road.
I'd stay away from credit counseling. Too many horror stories there and most future creditors will look at that in about the same light as they would bankruptcy. Not a good way to go
Hi Bill, I wrote you an e-mail about an hour ago from mj******@hotmail.com regarding this situation. I am assuming that you haven't gotten to it, I will be online for a little while longer and will check tomorrow also. Looking forward to hearing from you.
Thanks for the reply, Saar. Unfortunately, my cards have been maxed out for about 7 months now, and no other credit card is going to want to take me. By the way, I paid the $20 to Citibank which gave me another 30 days before going into Charge-off again.
If you can't reasonably expect to pay back any of these accounts, then might as well file a BK7, and wipe them all out, and maybe re-affirm one of the lower balances, and keep a card or two. You listed Cap 1 as a creditor, remember they are one of the few fair re-builders of cc's. Any time in the future you need to get any type of credit, auto, mortgage etc. the charge offs will hurt you more than a BK7, credit counseling same thing, unless you can pay it all back faithfully, but sounds like you're in deep, and if what another poster said is true about 1099's, then you will reallly be paying. Talk to a lawyer who specializes in BK, and reaffirm, properly atleast one major cc account, for the future. Good luck.
Yes, I've got it and I've replied to you. This still needs a bit of discussion. Especially that citibank card. There is a way out on that. What did you say the total owed on that card was.?
Problems, Try to settle with me and work out something with them. Don't let your name in their blacklist. You can't get credit card from Citibankif your name is on their list. That what I heard from the board. Try to keep it from charge-off status. Ron.
