Hi. I've posted here before on my credit card problems. I have 3 cards, and each of the 3 had about $20K on them (I know, I know, but at least these were not frivolous purchases): Here's where I stand, and I'm being pressured by MBNA to make a move by 5/30/06: 1) My Citibank account went to a collection agent, I requested verification in April, and just received another letter from a local attorney saying that I now owe $30,000, and that I have 30 days to dispute. They are attempting to collect on a debt and may sue. The interesting thing is that this account went to GC Services originally, and when I requested verification, what I got was this letter from an attorney saying the same thing GC said. Can Citibank take the account away from GC even if they never answered my challenge to the debt? 2) I contaced MBNA regarding my second card to tell them to keep their shirt on, and that I just couldn't pay it off now. They checked my credit history, and saw that I had a mortgage that was being paid on time. They asked if I had any other cards that had been charged off yet. I said yes, and that I had no real income on paper, no car, etc. They immediately offered to settle for 30%, or $6200 over the next several months. This sounds like a good deal to me, and I think I can get the money together by August. Of course they need an answer immediately, and so I wanted to get some opinions on this here. 3) My third card is with Chase, and I spoke to them last week. They said I have another 100 days before collections, and seemed OK that I couldn't pay right now. They just said to keep them posted. So that's where I stand right now. Am I likely to get card 1 (Citibank) to settle the way MBNA did? I own 25% of a house with my brothers, which may or may not be sold for many years. Is a lien on a house considered a poor investment by the company, and would they be happy to negotiate even if they had a judgement and lien? Anyway, lots of uncertainty here. Any advice would be valued. Thanks, bushka
You are in bad shape... Actually, what likely happened here is that GC sent the account back to Citi when they got your validation demand, which they can do in almost every state, and stop collection on it. It was Citi that sent the account on to the collection attorney. All you got in either case was the sec. 809 validation notice (initial communication). Perfectly legal. If the CA attorney did not demand payment immediately, or present the demand amount information so as to "overshadow" the notice (made you think you had to pay within the 30 days and confused you about your rights in doing so), you probably have nothing on them, violations wise. Yes, they said they may sue. That's the operative word: May. If they did not set a definite deadline, they are covered. They obviously don't think they can get a lot out of you, if they are willing to settle for a 30% settlement on what I assume, from what you have told us, is an "in stat" account. Even with the mortgage showing on your CRs. However, what are the terms of the agreement? I sincerely doubt they will allow you to wait until August to come up with the funds. Even if they do, you should try to get the rest of the debt cancelled. If you don't, not only would you face a 1099C, which can be bad enough; since you are insolvent, that would be easy enough to take care of without having to pay Uncle Sam the tax. If you don't have the debt cancelled outright, there is still the real possibility of having the unpaid balance sold to a JDB. With the "fun" that entails. Do your best to keep it "in house" at Chase. You might consider contacting them and trying to rehabilitate the account, soon. Look back at what I said about the MBNA settlement. Until it's in writing, don't trust them. You own only a 25% share of a house? No wonder they are not working too hard to pursue you....there are real complications if they try to foreclose. However....they would go for a judgment and lien if they really want their money. And, yes, judgments do get paid off via. agreements arrived at through negotiations post-judgment, even at a lower settlement amount. Better than nothing. Or, having to wait a long time. I have a question: In your financial situation, have you ever considered filing for BK at some point? You may need to.
Thanks for the reply. MBNA put in writing that I could pay $300 for two months, and then another $5600 in August, and this would retire the entire debt. This is the 30% settlement they offered. When I asked, they did say they would 1099 me the difference as taxable income. It seemed like a great offer and I believe I can get the money. I spoke to Chase and they said I could settle for 55%, but if I wait another month they might offer 30%. I was surprised how upfront they were. I told them I wanted to pay but flat out couldn't, but was hoping to settle out of court so both parties would get something they could live with. I have to see how long the Chase thing can go because I don't think I could get enough money for a settlement there. The last one is the one with the attorneys, and I'm not sure what they will settle for. If I could get 30% and avoid a judgment I'd take it. Also, MBNA told me that it would be illegal for them to lie on a credit report and say that I closed the account, and leave it at that. They said they HAD to put something like "settled for less than full balance." I inquired as I understood that they could put whatever they wanted in a credit report. Anyone know for sure? thanks again, bushka
