katrina1231

OC turned down my offer..what next

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I stopped paying a few credit cards a few months back - I just couldn't afford them after my son's unexpected medical bills started.

Anyway, I let them go for a few months hoping that the companies would settle with me and I could just pay them off. I just started sending out letters with settlement offers this past month, after receiving letters from them offering various repayment options. I just got a letter back from HSBC saying that they will settle for nothing less than the full balance. They had originally offered a settlement of 70% to which I counter-offered 30%, hoping we'd meet in the middle. Just wondering what my next move should be...any help would be appreciated!

Thanks

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70% is about the most you can hope for from an original creditor. After they sell it to a JDB they'll probably offer you a 70% settlement out of the gate. Typically, in order to settle for less than 50% you're talking about having to wait over a year.

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Wait until they get sold as junk or they sue. You don't really have other options, unless you can cut them a check and pay it off.

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Once they sell the debts (or when they sue you, a lot of original issuers are doing this now), you might be able to settle- but I wouldn't wait until it gets to that point. Making payments to the original issuer is much better than ending up in court with them or a third party junk collector. The debt isn't going to magically disappear, especially now with everyone defaulting. Everyone's getting sued. Don't let it get to the point of litigation, it's not worth the headache and the threat of bank levies and wage garnishments. You borrowed the money, and they have the proof since these debts are fresh. I'd make payment arrangements ASAP before they charge off and sell or sue. Just tell them what you can afford and they'll work with you.

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We settled with BOA for between 18-19% and they are letting us pay it over 4 months.

First National of Omaha has offered us 45%..we're trying to get them down,

Chase has offered us 50% and citibank has offered 45% so it is possible...citibank is not budging but I think Chase will come down...I'll let you know as we go...I will be negotiating with the first two)hopefully this coming week.

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You do not need to wait until the accounts are sold. You can definitely do better than 70%, but timing is everything. It sounds as if your schedule is off, and you're simply not approaching negotiations correctly. Patience is key when settling your debt. Too often, people are intimidated and rush into settlement; believe me - that's not the way to go.

Best of luck to you!

Marie Megge

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What do you want to know seeking, what tricks? When an account is still with the original issuer, i.e. it hasn't been sold to a collection agency, you can settle or pay it off in installments. It's the best thing to do, since the payments will be reflected on your credit, and the debt remains 'secure' in a way, in that it's not floating around out there in the hands of a CA or JDB, it's right where it began and you're doing right by the original issuer.

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Timing is everything...they will usually tell you when your account will be charged off...can be 180-200+ days...depends...but figure almost 180 days out...about a week ahead of this time call them and offer 25%...and work up to 30-40% depending on the creditor.

I have finalized all but one of my cards and the rates are as follows...BOA 18% on all 3 cards with 4 monthly payments, FNB of Omaha 27% 4 monthly payments,Chase 27% on all 3 cards with 4 monthly payments, advanta 20% with two monthly payments, and Citibank...30% with 4 monthly payments. Citi filed a lawsuit on the one card I had asked for written communication only...I am answering that summons this week...when they set up the meeting I am going to offer 25% and hope to get 30% although I will go up to 35 if I have to just to get the last one resolved.

The timing is everything. Be professional and let them know you would like to settle. One thing I did was tell Advanta that I only had $2800 left to pay off my cards...and I had two left...so whoever accepted my offer first would get the cash. They told me they would get back with me. They called me the next day and accepted the $ 2800.

have a plan as to what you would be willing to pay, and offer less than that. As the time draws nearer they will definitely be willing to negotiate. I have dealt with the Original creditor in all of these and everyone has been very pleasant.

I wish the best of luck to all of you as well.

Oh...and I was told that if you wait until the last couple of days of the month they are even more willing to negotiate. Don't know if that's true but it sure seemed to work with Advanta and Citibank.

Edited by Oarman1954

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Thanks Newb...I am pretty happy about it all...but I have not heard back from Citi on the last deal...but I am willing to wait it out...they sold the account to Client Services and they are the ones that offered 30%...but they needed it by the 30th and I was out of town. He was supposed to send me the settlement paper and I have not received it. I will wait and see what happens.

I had another thought for those of you just starting down this path...I was very nervous at first also...and was looking for someone to tell me exactly how to do it. There is no one right way as everyone's financial situation is different.

They will definitely deal though...you just have to keep your cool.

Convince yourself that this is a business matter and that you are trying to get your best deal. Try to keep your emotions out of it. Leave the shame out of it and remember that no-one gave you a bail out and you are in the same boat as many many people are.

I had originally spoke with an attorney that does this kind of work. He said he would handle the negotiations for me at about $300-400 per card IF there was no lawsuit. I told him I thought I wanted to give it a try by myself first.He was very agreeable and said...okay...the time to call me is if they sue. Well...thanks to this site I don't even have to call him now that Citi filed suit. I think if I would not have asked that all communication be in writing Citi would not have sued either. Citi sold my other debt to Client Services because I missed the charge off date by 1 day and they had already written it off!! My bad!!

But that is the one that offered 30%...which is way better than the OC Citibank did.

When I told my attorney about the %'s I got he told me he didn't think he could have done as well as I did for myself.

So take a deep breath...you can do this!! Good luck!

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I had another thought for those of you just starting down this path...I was very nervous at first also...and was looking for someone to tell me exactly how to do it. There is no one right way as everyone's financial situation is different.

They will definitely deal though...you just have to keep your cool.

Convince yourself that this is a business matter and that you are trying to get your best deal. Try to keep your emotions out of it. Leave the shame out of it and remember that no-one gave you a bail out and you are in the same boat as many many people are............................

When I told my attorney about the %'s I got he told me he didn't think he could have done as well as I did for myself.

So take a deep breath...you can do this!! Good luck!

So when you do this what is happening to the Credit Reports? Do you get a pay for delete, or does it just show settled in full?

-=PO

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Well...your credit is going to take a hit...no question...but that is the way it goes...you have to understand that if you are going to try to negotiate a settlement there is no way your credit rating is not going to suffer. You are not paying your debt as agreed...that would be to pay it IN FULL and on time.

Having said that, I have not had any luck with the OC agreeing to either delete the negative info OR report it as paid in full. I don't expect them to. I will be satisfied with a settled on my credit report.

My goal was to reduce the total amount of our credit card debt from our failed business from 100K to about 20K and pay them off. After this is all settled I will work on building our credit scores back up to the high 700's they were before our financial disaster.

It is a trade off. I am willing to take the hit on my credit score to get out from under that mountain of debt.

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I did not call them except about once every other month. I put up with about 178 days worth of phone calls beginning at 8 am sharp and going till 9 PM. I was dealing with 5 different banks and they were relentless. I just let the calls go to our answering machine.

At around 60 days I explained our situation, explained our desire to settle and politely turned down their 80-90% (and some 100%) offers. At 150 days I called again. The offers were better but still not possible. At 170 days I started answering the phone. I spoke with someone different every time.That seems to be how it works. Once I made a settlement deal I usually spoke to the same person but not always.

I made sure to ask each creditor when the debt would be written off and again repeated my desire to settle the debt. I always started at 20% except for BOA. They actually called me and offered 25% so I offered 15%. I ended up settling with them at 18.5%. That was my best deal.

You just need to get yourself in the right frame of mind. Instead of fretting over the calls just accept that they are part of the whole process. You can do this. Patience and timing are everything.Good luck.

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2 things to check; does citibank have a signed or written agreement? Send a request for production and ask for it. If their lawyers are as stupid as the ones that came after me, they might say something to the effect of "cardholder agreements are not executed. Use of the account is acquiescence to the terms of the agreement." They are relying on South Dakota law, which they cannot export to other states. They can export SD interest rates, but not all the reast of SD's crazy statutes, one of which is this use and acquiescence garbage. Without the agreement, they are limited to 15% interest, thus sayeth the SD supreme court and the SD usury statute. That means a usury counterclaim, unfair trade practices, failure to disclose, TILA, you name it. Be careful with usury, they are a national bank and are regulated by the fed. They can remove the case to federal court. Better to claim the difference as actual damages under unfair trade practices. Also, check with these various OCs to see if they intend to 1099 you for the difference. You could wind up with a nice income tax liability for the deal you get. The money forgiven may be considered income. Check it out.

Edited by legaleagle

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Thanks for the information legaleagle. I am not really looking to beat them at this lawsuit. I am hoping to get them to settle for 25-30%.

But that information may come in very handy.

Before I started these negotiations I spoke with my accountant about the 982 form for the IRS. Sadly to say our business has suffered such losses we will probably be able to offset most if not all of the income reported on the 1099-C.

I am glad for that believe me!!

But thank you anyway for the heads up. I really appreciate all the help here on this board!

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