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The Art Of Negotiation:Recovering from a card collapse


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Hey, I was just looking for some advice for a friend that just went throught a credit card collapse. My friend has seven card(Amex(2), Chase, MBNA, Bank of America, Capitalone). Three months ago he told that he was in over his head and ask for my advise. The most important thing I told him was to maintain the minimum payment. However, he told me he couldnt pay the minimum for the next 3 months. However, in November Joe (aka) is expecting a huge settlement check that can pay off the bulk of his debt. I suggested that he submit a letter to the creditors disputing the Minimum payment as a math error(FCBA) and get a postal return card. I felt that down the road he could use this method to repair the 90days past due. Well now 3cards were closed by the creditior(MBNA, BankAmerica,Chase). Now that he has money to pay the creditors, any suggestion on various repair and settlement techniques? Here are just a couple of ideas im thinking about for Joe:(1)sending a check and letter with acceptance of the check means account is Paid as Agreed(2) Ask the creditors to reopen the account and not report the late payments. I know most of you are saying why would you want to have him reopen the account. Well he had very high limits and its only been 90days. Thus,he could maintain 4 years of good payment record.(3) None of the creditors sent him a letter to Joe to inform him that he was reported late(ground for dispute). Well I was just looking for some varying opinions on a settlement and repair technique. By the way just for your FYI he told that American Express was the best out of the bunch when dealing with this matter!

Thanks

Playmaker

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Sorry no one has responded. Let me see if I can help.

First, just because a creditor marks the account closed doesn't mean they won't take your money. I'd suggest your friend just go ahead and pay them the total balance on their latest bill, and be done with it. If he needs credit later, open a card with someone else. The "lates" will hurt the credit score, but not enough to get him denied credit.

And, once the accounts are being reported as "Paid" and "$0 balance", then put in a "never late" dispute with the credit bureaus.

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Thanks for responding. I thought during a consumer billing inquiry investigation an acccount was not supposed to be closed(FTC). I hope the CRA accepts his copy of letters sent and postal return receipt. Alot of times the CRA will not take outside documentation. However, on the FTC website they advise consumers to get a return receipt. If they do except this then the accounts must be report as positive.

Thanks

Playmaker

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Yeah, its unllikely that the CRAs will accept his evidence. Its almost all done with computer to computer conversations, and unless you take them to court, its unlike that a human would intervene.

Again, if its only been 3 months, and he pays them in full, the matter should be settled. The TLs on the CRs should simply say "Paid", with a $0 balance, and you can try disputing the lates in a couple months.

Lates hurt FICO scores, but its not terrible. I'd just pay them off and not worry about it.

(I think your friend got hit with the "universal default" clause in his CC contracts. If one of them reports closed, the others can follow suit.)

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