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Collections saga with Citibank


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Hello I'm sorta of new...first time posting but I've been lurking for over a month now. I've learned a lot! Wish I would have learned most of it a lot sooner though as I've made some mistakes in my situation. I tend to be a bit long winded but I will try and make this as short as possible.

A little over a year ago I took out a credit card with citibank to help out with some college expenses. I was grossly irresponsible with it and before I knew it I had maxed it out at $2500 and things started to spiral out of control.

My last payment to them was made in July. I was unemployed for a few months this fall and was barely making enough through temp jobs to pay for food, gas, and rent. As soon as I got a full time job I contacted Citibank to try and make right but was told my account had already been turned over to collections. Sure enough I got a call a few days later from GC services, this was in October. My balance had now swelled to $3300.

The GC people, as you know, were nothing short of nasty. And unfortunately their tactics worked on me. After several phone conversations (I know!) they agreed to a payment arrangement of a still ridiculous amount that I couldn't really afford. In my desperation I gave them my bank info and authorized automatic withdrawls(I know!!!). Later that evening I had a conversation with my aunt, who is an accountant, she advised me to close the account immediently so lucky for me they never had the chance to clean me out. I called them and told them I had closed the account, and expressed interest in setting up a more doable agreement. I was then yelled for a while and than hung up on. About 2 or 3 weeks later I get another call from them, this time a different agent. I was suspicious from the get go as this person was waaaaay too nice. At one point she heard my cat in the background meowing and was like "aww i loooove cats? What his name? How old is he? He sounds like a big baaaaabbbiieeee!". I told her that I wanted to pay the debt but I don't have $3300. She was waaay too understanding and told me she knew I wasn't a bad person and was really going to try her best to help me out. The next day she called me said she had GREAT news. She could offer me a settlement, but before she could I had to wire in a goodwill payment of $250 since I reneged on a former deal. This seemed logical to me at the time...after all I did agree to do something (which I never should have agreed to) and didn't do that. So she gave me the instructions on how to get a western union money transfer and I said I would do it on my next payday (about a week from then). She really wanted me to do it right then and there but I told her I couldn't give her $250 I didn't have. She finally agreed to wait till next Friday.

Fast forward to two days later, I get the settlement offer in the mail. So much for having to wire in money before I could even be offered it seeing as it was mailed before I even talked to her. The settlement was for them to forgive about 20%...which brought my debt down to $2500 or so which still needed to be paid in full. Then I went and looked into wiring the money and found out western union money transfers cost $40. I called the agent up the next day and informed her that she had lied to me, the settlement was to much for me to pay in one lump sum, and that I would not be wiring any money nor will I send in any money at all until we come up with payment terms that worked for me. I was very angry but remained professional and never once refused to pay (she tried to get me to say it many times). Well the sweetness was all out the window at that point. She yelled at me a little and once again I was hung up on.

It was at that time, in my frustration I found this site. I recognize the many mistakes I have made dealing with this. I promptly wrote up a DV letter, also requesting they not contact me by phone anymore. I never did receive a reply from them and its been over a month. Well, just a few days ago I get a letter from Shermeta, Adams & Von Allmen P.C. Attoneys at Law. At first I thought I was being sued but it appears from reading the letter that CitiBank has now just assigned them to collect the debt and they want me to contact their recovery department to set up payments. I plan on sending them another DV letter.

Now after all that (I told you I'm long winded!), I do have a few questions.

I was told by the collection peoples that I was still being charged interest on my balance, even though they appear on my credit report as closed. However in my 3 separate letters from GC and this new one from the attorneys office, the amount has never increased. Do CC companies always continue to charge interest on past due accounts? Or am I just gonna get hit with another bill at some point for another couple hundred bucks?

The fact that this new CA is an attorneys office makes me a little nervous (which I'm sure is their motive!). Is there a different way I should deal with them? I've made my DV letter a little more polite than my DV to GC. xangelx

At my income, I can only spare about $200 a month to pay this down which would take about 16 months. After I received their validation and everything comes through, I want to set up this plan. Should I send them a goodwill payment with my letter outlining my plan? Or should I just wait for them to agree to the terms first? Or should I still try and see if the OC will accept this plan? :confused:

Thanks for all your help!

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You'd think those 'tards would have just have given you acceptable terms to begin with.

If you can pay $200 per month, then write the lawyers and tell them (don't ask if it's OK) that you will make payments of $150 per month each month and include the first payment and send them a money order each month for that amount or more as you can afford. If you make payments directly to the attorneys and make the MO's out to them, they should be happy that you are a source of income. Keeps meticulous records in case they don't pay Citi their share.

You'll notice that they will take the money, no matter what the amount. In the meantime, there is no need to speak to any of them on the phone for any reason.

In about a year, write both the lawyers and Citi to ask for an itemized statement showing how much you have paid, and the remaining balance and how that balance has been calculated, then sue them when they lie about all of that or don;t respond at all.

By then, you would have learned a lot more and the strategy becomes to let them sue you, and defend yourself and counter sue both Citi and the attorneys because they will most liekly not apply your payments correctly or try to use shady accounting practices that show that the interest and fees are $200 per month and thay you will be in debt to them forever!

Fighting them in court is the only way to make sure you only pay what you legitimately owe.

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DV letters are for:

1. An attempt to wiggle out of debt. (CA and OC's are on to this tactic)

2. Confirm that the CA has the right to collect ... and if you call the OC and they tell you to contact that CA, guess what, then they have the right to collect.

I promptly wrote up a DV letter, also requesting they not contact me by phone anymore. I never did receive a reply from them and its been over a month. Well, just a few days ago I get a letter from Shermeta, Adams & Von Allmen P.C. Attoneys at Law.

exactly why DV'ing every CA isn't always the silver bullet so many people think it is.

Now your account has been sent to a law office, and you thought GC was bad!?

it is going to get worse.

Do CC companies always continue to charge interest on past due

yes they can and will and yes it is legal

Is there a different way I should deal with them? I've made my DV letter a little more polite than my DV to GC.

why are you DVing? when you call Citi's recovery dept do they confirm that the law office is handling? if yes, there no need to DV.
Should I send them a goodwill payment with my letter outlining my plan?
just send them your proposal and see what they say.

It looks like you are about to get sued. When that happens they get the full amount owed and the legal fee's. which aren't cheap.

other notes:

The GC people, as you know, were nothing short of nasty.
being nice didn't work- what do you expect? and even when they were nice- you closed the account on them.- again. being nice didn't work!

I am always amazed when people are surprised that a CA get nasty with debtors,

OC's have been nice for months and the debtor ignored their letters and calls

and now you expect a CA to be nice-- yea right! It's not personal, it's business.

I am not siding with CA's, I run a business and can understand both sides of the story.


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Always send a DV anyway. Stand your ground, you're nobody's little bitch, they just want you to think you are because you owe some money. It doesn't mean you are trying to weasel your way out of your responsibilities.

The card agreement most likely allows them to keep charging interest as long as you owe a balance.

No need to fear a law office. They have no special powers over Americans, they just act like they do.

Don't ask them if your payment plan is ok, tell them that's the way it's gonna be.

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The main reason I'm DVing is to find out exactly how much I owe and how that amount has been, and will continue to be, calculated. I don't think its to much ask to to find out how much I owe before I start blindly sending money. But according to Big Time, I won't get that anyway so I might as well just start sending them the money.

Plus I haven't contacted Citibank since it was sent to the law office...that contact was when it was first sent to GC. Any why not DV to find out if they aren't just some random company that pulled my credit report and are actually collecting for Citibank? Citibank never said "so and so is collecting on this". I recognize I owe Citibank the money...my main question is validating the CA so I know why I should be giving them the money and not Citibank and ensuring it will actually get to them.

I don't care if they are nice...they don't have to be nice but they could be professional. But all they did was lie, threaten, and intimidate, and bully me. There was nothing professional about them.

I'm not trying to get out of giving Citibank all they are owed - I never was. I want to pay it, but I gotta earn the money first. They ca take me to court, they can garnishment my wages, but either way the money is gonna have to come in installments.

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You have the right idea. They DO have to tell you how much they claim you owe, but you can go ahead and start sending payments anyway.

That is why I would send the lawyers a DV and Citi a letter asking if they lawyers are legit. If Citi never responds (they didn't for me), it makes it more necessary for the lawyers to obtain something directly from Citi and forward it to you.

They will also chill if they see you are sending them a reasonable ampount of money each month toward the debt.

Your ultimate goal will be to ensure that the money you send them will be mostly towards the principal, which will lower the amount of interest each month, which is why you eventually will have to drag them into the light (court.)

If you don't stand up for yourself, you'll end up paying way too much.

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The collection industry wants us to believe that they have their computers accurately calculate balances and fees and interest and credit payments the way the credit card companies do.

Sometimes that's the way it is, but it's usually just some jackass at a computer that types in a new, higher balance of some odd amount to make it look legit. Most people actually fall for that. You won't.

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If they sue and win a judgment it will at least knock down the probable 30% they are charging you now down to a statute rate of 6% or so depending on State law.If they do sue they might wait a few years for their exorbitant interest to accumulate.

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If you did it that way, they would try to say validation isn't necessary since you sent them money.

I'd first send a DV that requests validation and lets them know you have also written to Citi to make sure they are the ones truly assigned to collect the alleged debt and that the amount they are claiming is legitimate and that you have every intention of repaying what you legitimately owe. Also remind them that they must obtain validation from Citi, and not just say "yup."

Make sure you use the phrases "alleged debt" and "legitimately owe."

After their response, I would then send the first letter CMRRR with the first payment letting them know this is the way it's gonna be.

There is the possibility that they just sue in response to a DV, but don't panic. You will defend yourself and be fine.

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you don't need to DV to find out how much you owe!!

(call Citi they will tell you the amount due as of today- as it will grow next month)


DVing is what got you sent to a law office in the first place..

...do the math.


You claim you want to settle this...than fax your proposal.

the choice is yours

you've already paid consequences for your first DV..

are you prepared for even more consequences?

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I disagree with Hi. It's about control. If you fax a proposal, it's like asking if it's ok. With debt collectors, attorneys or not, no matter how much you say you will pay, it is never enough.

Send a DV anyway. It's your right as an American and if they screw anything up, you will have leverage against them.

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and when they sue who has control then?..


but it is true, you do have control....

you have control to stop this before it gets worse,

you have control not to get sued


you have control to send them a reasonable proposal ( which by the way reduces significantly your chances of being sued.

but I'm done with this post...

any further discussion is like talking to a wall.

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He does because what they are really after is a default judgement, which they won't get and filing suit when he is making reasonable payments is foolish. Judges don't like frivioulus lawsuits.

They are looking at the bottom line. They will have to spend money and resources should he defend himself, or they can just take the easy money he is sending them while spending nothing to collect it.

If they screw up the DV, he also has a counterclaim.

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Look. Citibank usually eventually files suit anyway no matter what you do. That's why it's best to build a strong defense now and have the confidence to fight them.

Even if you did try to negotiate over the phone, you'd want to get an agreement in writing first, and they want money now.

You could also just go ahead and start sending the payments about a week after you send the DV, explaining that you spoke to Citi on the phone who confirmed everything, but you would still have the DV on record. That would also give you leverage for a defense because their acceptance of your payment is a tacit agreement to your terms.

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Ok, I gues I have a little bit more thinking and research to do before I decide exactly what I should do. I really want to get this situation resolved, but at the same time I want to be sure I'm not being taken advantage of and ultimately put in an even worse situation.

When i send payments to the attorneys office...should I make them out the the attorneys or to Citibank?

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A few pointers for a fellow resident of the Magical Mitten State:

- We have a state law that mimics much of the FDCPA, but also covers the collection activities of OC's.

- When we DV, we're also entitled to receive a complete history of every payment ever made. Good info here.

- Companies engaged in collections must be licensed by the state, unless the company is based out-of-state and conducts collection activities using only interstate communication. This isn't frequently that helpful, but it can nail CA's that are based in MI, but not licensed (known to happen) or CA's based in other states if they physically come knocking at your door (probably not likely). Check licenses here.

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I'm very hard nosed in my approach I admit. But the only way I can see to avoid being sued would be to let them have thier way with you, but the you'd end up paying too much.

Most people here know that Citibank sues if you don't reach an agreement with the CA's they use and their CA's aren't the least bit honorable or reasonable.

In your situation, the parity of a courtroom is a very useful tool for you.

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I would make payment arrangements with citi for $100/mo. If they try to sue after you start paying then you can explain to the judge that it's all you can afford. I doubt they will sue as long as you are paying them though.

When you start paying the $100 you might get a phone call from the "law firm". If you do, file a complaint against CITI at the BBB. Complain that you are paying all you can and that the collection agency keeps calling you. This will usually get the CA off your back.

ONLY deal with Citi. In every instance i've tried to deal with a CA I noticed that they tend to tack on a few hundred dollars extra onto the bill.

DON'T waste time doing a DV. The account is obviously still owned by Citi and it isn't just going to "go away." The DV process works well for older collections, but with an amount this high and an account this new you'd be attracting a lawsuit.

Why only offer $100/mo? If you bind yourself to a $100/mo agreement, then you give yourself some breathing room. You can either send them in the extra hundred as a "goodwill" payment or you can put it into a savings account.

I STRONGLY recommend opening a high interest savings account and putting some money into there. It's FANTASTIC for emergencies like this. I have a nice little nest egg in savings right now drawing 4.5% compound interest.

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The thing with Citi is that even if you pay them directly, the CA doesn't go away and the way Citi does things is basically that if the CA can't collect, it goes to collection lawyers with instrutions to sue unless they get total cooperation from the consumer.

(Even then, they will probably eventually sue anyway for the security of a judgement since most consumers can't keep the payments up for more than a year or so. A bad guy lawyer told me this of them after we had reached a settlement.)

Whether they have that cooperation from the consumer is up to the collection lawyers to relay that info to some suit at Citi, and if you are sending the lawyers easy money so they don't have to wait for their share to be paid to them by Citi, they will be more willing to take the easy road and chill for awhile.

If she (turns out the OP is a she) starts making payments to the collection lawyers on her terms, then it's the closest thing to win-win for everyone.

That being said, I still think litigation is somewhat inevitable unless she is willing to pay too much.

I fought Citi in court a few years ago and paid them what I owed, but not nearly what the CA, or the first collection attorneys wanted at first. There is also no trace of them on my credit history at all. It took a year, but I consider it a victory.

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I would DV the lawyers and say you dispute the amount and ask for a computation of the amount owed, including the prinicipal, interest since last July, the interest rate, and any fees or charges associated. Don't say you owe it, just say I dioute this account adn deny liability for this amount. Tell the lawyer not to call you but put everything in writing. Send it certified ( no green card) or prioirty mail w/ delivery confirmation. This is so if they contiue to harass you you might leverage that as a counterclaim or separate claim. You need this becuase if you do get sued. one of your defenses will be you are unjustly enriching Citibank. Copy Citi and your AG if yo'd like.

Read the Michigan law, it may become your friend.

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