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College Student Needs Advice About Her Huge Debt - Help


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Hi Everyone,

This is my first time here and I just want to thank anyone in advance for your advice and input.

A little background info:

I am a 22 year old college student.

When I was 19, I used my cc's to fund an eBay business that didn't work out. I was able to pay the monthly payments until about summer of 2004. About a year ago, both my accounts went to collections (winter 04).

Earlier this year one of my internet endeavors proved successful and I incorporated.

Now, I want to take care of my debt but I want to settle for the least amount possible. Looking at my credit, you can't tell that I have a job. Im hoping this along with my age will help my situation.

1. I owe about 20k (Chase) that was sent to NES.

A couple months ago I received a letter stating they want to settle for a lesser amount.

2. I owe about 30k (Citibank) that was sent to ER Solutions in WA.

Last week I got a letter stating they can settle for 80% of the debt.

My main thing is that I really want to avoid litigation.

Where do I stand and what steps should I take to resolve my situation? Should I send them a letter saying Im an out of job college student with no assets?

Also, how good are debt settlement companies like debtsettlementusa.com and creditsolutions.com?

I'd honestly rather pay someone to take care of this for me than risk messing up any of the steps doing it myself.

Any advice will help this young un. :?

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The bad news:

Both Chase and especially CitiSkank will sue. Likely in the kangaroo court known as Arbitration where a finding for the creditor is a gimme. Then go to regular court to enforce the arbitration.

Settling for a lesser amount could lead to further collections for the remainder, so any offer to settle must include language which will prohibit reselling the remainder of the debt to a JDB who will attempt to collect that.

Don't waste your time - or your money - with debt settlement companies. They charge you to do things which you can do for yourself by reading on here.

Also, any amount that is on the account that is not paid as a result of settlement could end up tripping the trigger at the IRS in the form of a 1099 form for "Forgiven Debt". You will have to report that forgiven debt as income but I am not sure if that must be done in the same tax year or if you can spread out the liability. Which means you'll a> owe taxes b> kiss any refunds goodbye

If you really are not working, and no assets and this much debt then you might fall within the new guidelines for BK.

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Guest sifxpert

Youngun, I sent you a pm with some useful info to resolve your problem. Do not make contact with Citi until you read the pm. I have posted many comments and started threads here on how to handle Citi. I suggest you do a little reading on my Citi posts to know what type of monster you are up against.

Hope to hear from you.


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GrimRepo: Thank you for your input. So basically I just sit around and wait for them to sue me? And what would happen if they do?

I am in the position to pay them back but the original amount of the debt was right around HALF of what I owe now.

Also, if they were going to sue why has it taken this long? It's been almost a year...

Sif: Thanks for your PM, I will be getting back to you today.

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sif may have some specific phone numbers for you to use, but if not...call the OC (don't bother with the CAs). Ask to talk with a manager, and keep calling and working your way up the food chain until you get someone with authority.

Give them a sob story (even cry if you need to)...saying things like "gee, I really like you guys...you helped me when I needed it...I'd like to fix the problem...what can I do to make this right...can't we settle for what I borrowed...".

If they do agree to anything, get it in writiing...

If you can't find someone to listen...send a similiar sob story letter to the executive offices...

At the very least, you need something in writing that you can show to the judge (if they do decide to sue) saying that you tried to make it right...

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I've heard that once they chargeoff the account, its bad debt on their books and they are done with it...so they just sell it to a CA and move on...

If I send the sob letters to chase and citi, are they going to buy back the chargeoff from the CA?


What would happen if I did nothing? It's been so long anyway...

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Guest sifxpert


Once an account charges off, the debt it is not necessarily sold. Citi holds accounts forever and sometimes never sells the debt. Citi is not known for this especially within the previous 3 years.

Chase does sell accounts but after they have done their best to collect.

I can assure you that the balances you have will not be sold for a very long time. Especially with Citi. Charge off only means the account has gone delinquent beyond 180 days. Then the OC must assign the account to a 3rd party collector. Not sell, but assign or hire to collect for them. A 3rd party collector can be a collection agency or an attorney. With Citi, they use a standard collection agency such as RMA or URS or Client Services for their first placement. Possibly the account will go to a second placement collector or directly to an attorney.

Once the account reaches an attorney you are then looking at 80% settlement at best with no chance of waived interest or penalties.

Do not expect this Citi account to go away. Chase there is a very slim chance but not Citi.

I seriously do not mean to rain on your parade here but I am being straight with you.

I think everyone here on this forum knows I have a very clear understanding of Citi's policies. If there were another way to deal with them I would have posted it.

Willing had some good advice on calling the OC but in all honesty, Citi hires a bunch of nazi's who will not lift a finger to help you and Chase is no better.

The best advice I can give you is to not have any contact with any of Citi's people and do not send a DV or CD letter of any sort to any handler of this account.

Again, I'm sorry to say this but Citi is not the type of creditor to sell this type of account.

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Lets review. You owe both Citi and Chase some money. You now have money to pay them. While you may not have a job...you do have income. It may not appear on your CRs, but if you are taken to court, it will appear on your bank account records.

Neither Citi nor Chase will go away...eventually for that much money, they will sue. Your best bet is to get to them first. You can do it yourself, by crying on their shoulder...or you can hire a reputable lawyer (perhaps the one that helped you incorporate) to do it for you. You said you wanted to settle for as little as possible...in general, if you can offer them what you borrowed plus a reasonable interest (excluding the penalties and late fees), I'll bet they'd take it. I'm guessing that's somewhere in the vicinity of 80% of your current balance.

Will you wind up with a clean CR? Probably not. But if you ignore them and hope they'll go away and / or wait to be sued, you'll certainly have your CRs trashed.

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I don't know for a fact that the best you can do is 80%. I do know that most...emphasize most...CC will settle for what you borrowed plus some interest without too much agrument. (Obviously, if you put up a protracted fight or wait until they're about to sue and your credit is really trashed, some will settle for less).

So...yes...ignore the CAs. They will not help you.

Call the OCs directly...ask for the resolution department...or the hardship department, and see what you can negotiate. If you're not comfortable doing this, find a LOCAL law firm that will negotiate for you.

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Guest sifxpert

Willing, you're making things far too complicated and it is clear to me that you are not experienced by any means in settling debts. You must not generalize creditor policies. You are right in saying these balances will get you sued but besides that you are offering advise in an arena you are not qualified to contribute to.

The sole purpose of my signing on to this forum was reading the lack of detail provided specific to the creditor. Each OC CC JDB should be handled differently. Some are the same but most are very different and a few need to be handled with extreme caution like MBNA and Citi.

Your advise on handling Citi thru local counsel will get this youngun sued. A local attorney not familiar with Citi policy will contact Citi or the CA representing Citi with a letter of representation first obviously. BAM! Lawsuit!

Have you not read my many many posts regarding Citi? Any 3rd party notification sent to Citi or a Collector for Citi will get you sued.

I think it is wonderful that there are so many members who want to spend their time here offering to help but I am sorry, as wonderful as this forum is, it could also be tremendously destructive if people continue to post advise they are not qualified for.

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Sif, I think Im going to handle this case myself.

Since you are very knowledgable about both citi and chase, what are the first steps I should take? I assume I should contact them with a sob story...do you have addresses and numbers where I can send them letters?

Can anyone else offer any advice on handling citi and chase?

Has anyone had any past experience settling with either of the above companies after their accounts have been sent to collections?

Thank you in advance :)

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Guest sifxpert

888-203-1294 x630 ER Solutions

800 491 0016 x 1771 NES

I would call them directly and negotiate over the phone. Citi offer 50% and Chase 40%. I know you can get this amount but it may be difficult for you. I have found that sending letters is a waste of time since your offer is always going to be countered so you will have to speak to a rep eventually.

When you make your offer and agree on an amount, have them fax you a settlement letter. Makes sure your letter states, "no further obligation" "settled in full".

The 40-50% I stated for each is the norm for what I get because remember, I do not settle one account at a time, I settle bulk accounts so, their blanket settlement may be higher to the consumer. NES is very difficult to deal with and most consumers I know who deal with NES are never offered a settlement below 65-70%.

ERS should be able to give you 50%.

Do not mention anything about a 3rd party debt settlement co. or CCCS when discussing the settlement or bankruptcy. This will only piss them off and give them leverage...they will tell you to go ahead and file or hire a co and then hang up on you.

Simply state you are unemployed and have nothing since you are a student.

Just becareful with what you say. If they feel you will not accept their offer, they may get pissed enough and mark the account as "refusal to pay" and recall the account back to file suit. You must be cautious because otherwise, you may shoot yourself in the foot.

Good Luck!

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Do you have the contact info of the OCs?

Not their general address but someone 'up there' or someone who possibly deals with the settlements ...or maybe their 'hardship' dept?

If I'm telling them Im a student with no assets, how can I settle w them for a lump sum? What is the best way to negotiate?

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