caithe

Am I missing anything - trying to settle

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Okay here goes..
I've done plenty of research, as much as I can without going crazy. I read the Debt Settlement, Step by Step topic and was really hoping Step 20 was going to be posted before the end.. Not finding the answers I need and the copious acronyms are a little intimidating.

I have a $5000 best buy credit card debt which I have not paid anything on since 2/2013, so a little over a year. I called best buy, they have since switched from capital one to citi bank and they gave me the number for citi card 800-978-8800 (I googled that which brought me to this forum, actually). I have not called them yet, but I wish to settle $500-$1000, the lowest they will take. I've heard that calling at the end of the month will help, as they need to fullfil a quota and they're more flexible.

The way I see it, step by step for my case goes like this:
-Call them
-Give them info to find me
-Offer $500 settlement
-Haggle and find a compromise

I just want to make sure I'm not missing anything.

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...

I read the Debt Settlement, Step by Step topic and was really hoping Step 20 was going to be posted before the end.. Not finding the answers I need and the copious acronyms are a little intimidating.

...

I have not called them yet, but I wish to settle $500-$1000, the lowest they will take. I've heard that calling at the end of the month will help, as they need to fullfil a quota and they're more flexible.

The way I see it, step by step for my case goes like this:

-Call them

-Give them info to find me

-Offer $500 settlement

-Haggle and find a compromise

...

I have not read the Debt Settlement section referenced.

 

I did not understand original creditors (OCs) to entertain accepting a settlement in the range of 10-20% of the alleged amount due. Especially with a default as recent as about one year.

 

I would not make an original offer to settle over the phone. I have no idea if the person I am speaking with would be authorized to approve of such a settlement even if they claim they are authorized.

 

I would want to bring significant leverage to the negotiations if I was requesting an OC accept a settlement in the 10% range. Significant leverage with an OC, alleging a defaulted debt, is not all that common as far as I know.

 

If I did not have significant leverage I would be a reluctant to provide my contact information as I would not expect an OC to accept an offer in the 10-20% range. Others my have experience negotiating a settlement with an OC. My experience is that they either sue or they do not sue (occasionally they might sell the alleged debt to a junk debt buyer (JDB). I don't have any experience writing them a settlement check.

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Okay here goes..

I've done plenty of research, as much as I can without going crazy. I read the Debt Settlement, Step by Step topic and was really hoping Step 20 was going to be posted before the end.. Not finding the answers I need and the copious acronyms are a little intimidating.

I have a $5000 best buy credit card debt which I have not paid anything on since 2/2013, so a little over a year. I called best buy, they have since switched from capital one to citi bank and they gave me the number for citi card 800-978-8800 (I googled that which brought me to this forum, actually). I have not called them yet, but I wish to settle $500-$1000, the lowest they will take. I've heard that calling at the end of the month will help, as they need to fullfil a quota and they're more flexible.

The way I see it, step by step for my case goes like this:

-Call them

-Give them info to find me

-Offer $500 settlement

-Haggle and find a compromise

I just want to make sure I'm not missing anything.

 

You are not missing anything but I would not hold your breath that they settle for 10-20% of what you owe when they can simply sue you and get a judgment.  Settling for that little amount works when the debt is old and beyond the SOL for filing a lawsuit.  It also works when it has been sold to JDBs one or more times because they paid pennies on the dollar for the debt not the amount alleged owed.

 

Settling is all about leverage and who has it.  You are dealing with the original creditor who has the leverage on their side because they can wait until 2018 to sue you and report the debt until 2020.  Lately Citi has not been selling their debts and has been suing.  That is A LOT of leverage.  

 

Generally if an original creditor is going to settle it is for 70-80% of the debt.  ANYTHING you settle should be in writing because oral promises they make in a conversation are unlikely to be enforceable.  

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The original debt was $3000, and I just checked, it's actually $4500 is what I owe after fees and interest, etc.

 

So basically what I'm getting is don't try to make a deal with the OC, citibank. Should I wait to see if they sue or sell to a JDB? I lost my job and we're relying on my fiance's income, which isn't much and fluctuates frequently. We have a couple other debts and we're barely able to stay affloat with rent, other bills, etc. My mother offered to settle this amount for me as long as it didn't go over $1000. So I really want to settle, monthly payments are risky as we have no idea if we could afford them 2 months from now.

 

I'm kinda thinking, and please correct me if I'm wrong, but the original $3000, which we paid about $300 originally, doesn't seem like a big company is going to lose a lot of sleep over. How likely is it that they'd sue?

 

Also, I don't want this weighing down my credit, that's another reason I want to settle.

 

What do you mean by "significant leverage"?

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Clydesmom, thank you for the info, albeit depressing, it is important to have.

 

Do either of you have recommendations? The options I see are: working out a payment plan which I'm not sure I can uphold, waiting and hoping they don't sue (why haven't they by now?). Both leave me in a shitty spot. :/

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@caithe

 

There's no way to know if the OC will sue you or sell the debt.   Whether or not the debt is with a big company really makes no difference.   I think it's more about their standard procedure.  Do they sue or do they sell?

 

I had a Best Buy debt, but they did not sue.  They sold it.  BUT, the SOL in my state is 3 years.  I have to wonder if that makes a difference.  I just don't know.

 

You said that "we" have a couple of other debts.  Are they your debts?  If so, considering your situation, would bankruptcy be a possibility?

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The original debt was $3000, and I just checked, it's actually $4500 is what I owe after fees and interest, etc.

 

I lost my job and we're relying on my fiance's income, which isn't much and fluctuates frequently. We have a couple other debts and we're barely able to stay affloat with rent, other bills, etc. 

 

If things are this dire the last thing you need is the stress of trying to negotiate with a creditor who is then going to hound you day and night for as much money as they can get.  Right now your efforts would be better spent at getting a new job and stabilizing your home situation.  If Mom can help financially the LAST place I would spend it would be on settling with a creditor.  You need to stay afloat as you said.

 

I'm kinda thinking, and please correct me if I'm wrong, but the original $3000, which we paid about $300 originally, doesn't seem like a big company is going to lose a lot of sleep over. How likely is it that they'd sue?

 

This is a large corporation.  They aren't losing sleep over any of the bad accounts.  This is business for them not personal as it is for you.  There is no way to predict if they sue or not but given that you only defaulted a year ago the odds are more in favor of them doing so than not right now.

 

Also, I don't want this weighing down my credit, that's another reason I want to settle.

 

If you defaulted last year and it has been charged off the damage is done.  It will take you a minimum of two years past settling this to stabilize your credit again.  Creditors want to see at least two years of on time payments before they consider late payments and defaults a thing of the past.  Sometimes longer.

 

As @BV80 said if your debts are that over whelming BK may be your best option to get out from under this and reduce your stress.

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I have the best buy card, my fiance is the cosigner.

I have another credit card through wells fargo. $800

He has student loans, $3000.

 

I would be declaring bankrupcy for $3800 original debt.

 

@BV80 I have no idea if they sue or sell. Clydesmom said they are suing more than selling. No bueno for me.

Best Buy recently sold their credit accounts to citi from cap1. So cap1 best buy might be different than citi best buy. :p

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I have been looking for a job. I don't have transportation and people here aren't too keen on helping others. My fiance has a car, but he has work and can't always help me. I have repeatedly applied everywhere in walking distance and on my fiance's route to work. I can't work where my fiance does, I've worked there before and am no longer eligible for rehire.

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I have the best buy card, my fiance is the cosigner.

I have another credit card through wells fargo. $800

He has student loans, $3000.

 

I would be declaring bankrupcy for $3800 original debt.

 

@BV80 I have no idea if they sue or sell. Clydesmom said they are suing more than selling. No bueno for me.

Best Buy recently sold their credit accounts to citi from cap1. So cap1 best buy might be different than citi best buy. :razz:

 

BK for that small amount is not worth it.

 

I can tell you that Capital One lately has not been selling debts and has been suing as an original creditor. They DO NOT do pay for delete, good will, and a hard line stance against settling for less than owed.  

 

Given all your circumstances I would lay low and see if they simply let it go or sell it.

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..what happens if they sue?

 

I don't own anything of real value and I have no income.

 

Can they garnish my fiance's wages or take his car? His car is maybe worth $800 MAYBE if we're lucky. That's just about all we have.

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...

Significant leverage with an OC, alleging a defaulted debt, is not all that common as far as I know.

...
...

What do you mean by "significant leverage"?

Perhaps I have a favorable judgment against the same OC in a previous lawsuit.

 

Perhaps I have documented violations of my state's consumer statute regarding collection of debt by an OC (if such exists in my state) that are within the statute of limitations, I am willing to pursue in court, and the statutory amount relative to those documented violations is the same or exceeds the amount of alleged debt.

 

Perhaps my BK attorney contacts the OC to offer a settlement and informs the OC that I have placed $xxxx in the attorneys trust account with instructions to settle the account or if not possible file ch. 7 BK on my behalf.

 

Significant leverage can come in many different forms. I suspect if one has it they probably know they have it.

 

It is probably pretty unusual to have significant leverage against an OC alleging a defaulted debt.

 

I would not want to negotiate without having some leverage. It is likely to be painful.

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..what happens if they sue?

 

I don't own anything of real value and I have no income.

 

Can they garnish my fiance's wages or take his car? His car is maybe worth $800 MAYBE if we're lucky. That's just about all we have.

Then I would defend the lawsuit.

 

They likely don't care as they sue poor people routinely.

 

Garnishment and exemption questions would probably be good to discuss with a BK attorney. I assume they would give a free consultation. Just because I consult with an attorney does not require me to hire them.

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"You are not working, don't own anything, fiancé not making much, between the 2 of you a car that you would be lucky if it's worth $800, and your credit is already shot",  THIS is significant leverage as to why they should not want to sue you, or why they should not pursue a case which you are actively defending if they do sue.

 

If you don't have anything to protect then you probably don't need to file BK.

 

I would ignore it, and if they file a lawsuit fight it, and if nothing else; that is when I would worry about settling.  In time your situation above will improve, along with the economy and many other people's similar situation.

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"You are not working, don't own anything, fiancé not making much, between the 2 of you a car that you would be lucky if it's worth $800, and your credit is already shot",  THIS is significant leverage as to why they should not want to sue you, or why they should not pursue a case which you are actively defending if they do sue.

 

If you don't have anything to protect then you probably don't need to file BK.

 

I would ignore it, and if they file a lawsuit fight it, and if nothing else; that is when I would worry about settling.  In time your situation above will improve, along with the economy and many other people's similar situation.

While similarly situated it was not significant leverage for me to prevent a couple of OCs from filing lawsuits against me. They fought aggressively and continuously until they lost at around two years.

 

Being broke and willing to fight in court until I won did not seem to provide any significant leverage in creating a favorable settlement from the numbers opposing was very sparingly throwing around. YMMV

 

I doubt I would be looking at BK if similarly situated but that would not stop me from consulting with a BK attorney to get educated on exemptions, garnishments, and my options.

 

I would probably not be too focused on negotiation as there is no real leverage that has been disclosed.

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I m a strong believer that unless the debt is over $100k I would never file BANKRUPTCY!!!!!!!

 

period

 

End of story

That is what YOU would do. Other people have their own thresholds. I agree that the OP's current situation might not be the best one to use the once and done option that BK 7 has become--the debt is too little, and I, personally, would prefer to save it for a more dire situation.

 

I filed BK7 in 1990, when one could file more than once, and, even if that hadn't been true, I would still have done the same. At the time, I had about $15K in debt, $15K yearly income, four little kids who got hounded by the wench from Sears while I was still at work, and their dad decided to take a child support vacation.

 

Just knowing that my 11 year old daughter no longer could be berated by that horrible person was worth it to me.

 

Of course, I have not, in the past 24 years, bought a  pair of socks from Sears, either.

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That is one of the many powers of consumers; the ability to take your business elsewhere. 

Yes. I have had people mock me for my stance on that, not only with Sears, but with companies whose policies toward their employees or social issues (remember Nestle, and the "free" baby formula in 3rd world countries) I find appalling. But our dollars are the only votes that most of us have with corporations, aren't they?

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