I have a loan with Beneficial (HSBC) that has a balance of about $3700. It's been about 150 days since they've seen a payment from me. I'm in a better financial situation now than I was 150 days ago and ideally I'd like to settle this. I had a conversation with one of their collection people shortly before Christmas and we verbally agreed to settle for about $1500. I set up two future bank drafts with the agent and thought all was well. The next day I got a voicemail from them saying that there was a problem and I needed to call back. I called back and was immediately sent to the agent's supervisor. He told me that the agent had made a mistake when she calculated the settlement amount and that they wouldn't be able to settle for any less than $2200. I told them that I would only settle for the $1500 I had previously agreed on. It went back and forth for several days, and I eventually I even offered to meet half way at $1850, but the supervisor claimed to have escelated it to his supervisor and they wouldn't come down below $2200. I told him that I wasn't able to do that right now. Fast forward a month or so and I got another letter from them that stated I had until Jan 16th or they would take legal action. Unfortunately I was out of town when the letter arrived and it wound up getting buried and I just now discovered it. I called back to see what the status currently is and I was told that my case is now with their lawyer. They even gave me a contact number for the lawyer that is handling my case. She's in another city in my state that's about 4 hours from me. I also asked about settling it, and I was told that I can't settle for less than 75% of the total amount due, or about $2775. However, he did say that I can send them a settlement offer with an amount of less than the 75%, but I also need to include a reason for settling. I'm not entirely sure how to phrase such a letter, or how much to offer. Are there any examples here? Also, should I be concerned that my case has been assigned to an attorney (and that she's had it for about 13 days now). At this point I want to settle for as little as possible and get this behind me, but even more than that I want to avoid a judgement. It seems pretty clear that Beneficial intends to get a judgement, so my other question is how long do you think I'll have before that judgement happens? Should I contact the attorney and see if I can get a status update or try to make a settlement offer to her? Thanks much, Brett
To follow up on this, I spoke with HSBC again today. Apparently yesterday I was talking with someone in a different group, so today I spoke with the woman assigned to my account. She claimed that my balance was $100 higher than the person yesterday claimed, and she also said that she can't settle for less than 85% of the balance. She said that typically it takes 3-6 months for them to get a judgement and that even if I do start making payments on this account they will still pursue a judgement. She said that the only way to stop them from pursuing a judgement would be to pay off or settle the account before they get that far. Now my questions are: Is it logical that it would take 3-4 months for them to get the judgement. Is it worth banking on that and trying to save additional money to make another settlement offer in two or three months? She said I could pay the past due amount and start making payments on the account, but that they would still pursue the judgement unless it was paid off before they got that far (it wouldn't be if I was just making payments). Does it make sense to start making payments anyway to try to reduce the balance? I'm not sure that it really buys me anything. Any other advice? Thanks, Brett
Hi Brett, I'm a real newbie with all this credit stuff but I can share with you my experience. Once a few years ago I had a similar experience as you when I negotiated a reduced payment with a representative of a law firm only to get a phone call 2 days latter saying they changed thier mind and upped the amount of settlement another $1,000. So you have my heart felt empathy on that one. As far as the judgment, in my case it took between 2 and 3 months. First they have to do the paper work and file for a motion for judgment. Then you have the opportunity to file a response to that motion. After that you will probably given a date for oral argument and the judge will either decide then or within a few days. Then, if judgment is granted, they submit thier form of judgment and at that point you will probably have to pay the full amount, plus interest, plus all legal fees. This is my experience, certainly not my expertise on the subject. That being said, I would hate to see you hold out for renegotiation in a couple months only to find out you then have to pay more than ever. A lawyer I spoke to said it is "not a level playing field" when it comes to debt collection... I would say if there is any way you can borrow the money or put it on another credit card, do so and be done with it. My experience is the amount more often goes up than down. Good luck. And post again to let us know how things go. Sue
In most states, a settlement offer needs to be in writing to be enforceable (each state is different so it may not be a requirement in your state). Even its not required that a settlement be in writing, you would still have to prove they offered to settle for a lesser amount in they sued you. It is best to have all settlement agreements reduced to writing before you make any payments.
You need to file a written response to the complaint/petition filed by the creditor to avoid a default judgment. I order to avoid a Motion for Summary Judgment, you would need to allege an affirmitive defense (accord and satisfaction, uncredited payments, statute of limitations). It is also best to contest every debt collection lawsuit as a lotof these companies add illegal charges to the account.
