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itzTHATguy

Debt Collector wants a payment before submitting a settlement offer?

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UPDATED: 2/11/15 in Post #14

 

I am 5 months delinquent on an AMEX card with a balance of $15K.  The account has been cancelled.  While I still owe AMEX the balance, they have Gatestone (the DC) contacting me for the money.  

 

Today, I let the DC know I have a settlement offer ready ($7K, one lump sum) with a 'hardship letter' (as requested) as to why I can't pay the full amount.  But when I mentioned it, the DC told me she couldn't submit the offer without me first making a payment of $260.  She said this was because "my account is still accruing interest."  (Duh...)  And that this was an AMEX stipulation, not Gatestone.  

 

Of course, when I told her that didn't sound right to me, she got angry and accused me of wasting her time.   :waah:

 

-Is it common to require a payment before I submit a settlement offer?  Does that sound right to you guys?

-Should I try to send my settlement offer directly to AMEX?  I'm concerned about AMEX not even receiving my offer or having a chance to counter offer.

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Since your card is only about 5 months past due it's very possible that it has not yet charged off.  I never worked for AMEX so I have no idea about their internal rules regarding charged off/pre-charge off accounts but I can speak that other creditors do have different rules regarding settlements on pre-charge accounts versus post-charge.

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Interesting. I think @Rogue198 is on to something regarding the 5 months. Perhaps there is a stipulation with the DC determining when collection efforts revert to AMEX control. Typically these requests are meant to re-age the debt, but that's not the case here.

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I would say she is wasting your time. Don't call, write them CMRRR and tell them what you have to offer and will NOT pay any up front money until you see a written agreement that it also be REMOVED from your TL. Not just upgraded to paid as agreed.

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It's a contigency third party collector on behalf of a OC, they have no say what-so-ever on CR.  Not to mention that the OP is dealing with an account that more than likely isn't even charged off yet.  This isn't your standard JDB with 2-4 year old debt.  This is an account that some creditors would still allow to be "cured" by paying the entire past due & continued to be used.  There is no way that AMEX will agree to delete a TL

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I'm not going to say that she's not being completely honest, one of the portfolios I worked was a pre-charge stream & we were graded not just on gross $$$ we collected but also on accounts that we were able to "save" i.e. not advance another month deliquent or "cure" i.e. bring current/settle.  If (and given the holiday calender it's possible) that the settlement offer won't be completed until January, then the up-front is an attempt to save the account for December.  It's also possible that saving the account is required by AMEX or could just be the collector padding her bonus check.  Another variable to consider is since accounts typically charge off after 6 months deliquency, there may be additional rules/requirements that AMEX has for borderline accounts such as this one.

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Since your card is only about 5 months past due it's very possible that it has not yet charged off.  I never worked for AMEX so I have no idea about their internal rules regarding charged off/pre-charge off accounts but I can speak that other creditors do have different rules regarding settlements on pre-charge accounts versus post-charge.

Yes.  The DC has mentioned that I still could 'cure' or 'save' the account (not his words) by paying the past due amount.

 

I'm not going to say that she's not being completely honest, one of the portfolios I worked was a pre-charge stream & we were graded not just on gross $$$ we collected but also on accounts that we were able to "save" i.e. not advance another month deliquent or "cure" i.e. bring current/settle.  If (and given the holiday calender it's possible) that the settlement offer won't be completed until January, then the up-front is an attempt to save the account for December.  It's also possible that saving the account is required by AMEX or could just be the collector padding her bonus check.  Another variable to consider is since accounts typically charge off after 6 months deliquency, there may be additional rules/requirements that AMEX has for borderline accounts such as this one.

Yeah, I'm starting to think this is just a stipulation by AMEX for 'borderline' accounts or some kind of DC incentive, like you mentioned.

 

I would say she is wasting your time. Don't call, write them CMRRR and tell them what you have to offer and will NOT pay any up front money until you see a written agreement that it also be REMOVED from your TL. Not just upgraded to paid as agreed.

Yeah, I don't think it's in my best interest to reduce the cash I have available for a settlement, simply for the opportunity to offer a settlement. 

 

Letters via CMRRR sounds like the way to go. 

 

I'm also wondering if it's worth it to try and offer a settlement to AMEX directly.  I am worried about spending hours with customer service, only for them to refer me back to Gatestone.  : :censored::   Maybe a CMRRR, but where to?

 

Thanks for all the replies, guys.  This really helped.

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As I have said on here many times, I am against trying to settle with a JDB/CA. As you rarely get what you want as they will lie to you while taking your money. But, on the other hand, I am not a fan of paying the OC either, but, it never hurts to try. I would write the OC AMX and make an offer to them, telling them that you will NOT deal with any third party, only them and tell them your offer. Have them put it in writing on their letterhead and mail it to you.

 

Somewhere on this forum I have a settlement letter that would make a good guide, search for it or I will dig it out once again. Make sure that YOU send everything CMRRR and start a file and keep things for years.

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I do not mind settling but in this case, I would tell the DC that they wasted my time and anytime they want your money, they can do things your way.

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Yeah, I don't think it's in my best interest to reduce the cash I have available for a settlement, simply for the opportunity to offer a settlement. 

 

Letters via CMRRR sounds like the way to go. 

 

I'm also wondering if it's worth it to try and offer a settlement to AMEX directly.  I am worried about spending hours with customer service, only for them to refer me back to Gatestone.  : :censored::   Maybe a CMRRR, but where to?

 

Thanks for all the replies, guys.  This really helped.

 

Your call of course, however, don't be surprised if the settlement amount goes up if it stretches into next month without the up front.  Personally, and I felt this way before working collections, letters take to much time so unless it's for legal correspondence (such as court documents) phones work better.  Thus I recommend calling the DC and working out terms that are then placed in writing and sent to you via emailed attachment or fax.

 

As for calling the OC, well, again, depends on the creditor.  Some would talk with customers and then refer them to us, others would negotiate & accept payments others wouldn't even talk to consumers as their phone system, if recognized the number or account information entered into the automated answerer would auto route them to our agency.

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Your call of course, however, don't be surprised if the settlement amount goes up if it stretches into next month without the up front.  Personally, and I felt this way before working collections, letters take to much time so unless it's for legal correspondence (such as court documents) phones work better.  Thus I recommend calling the DC and working out terms that are then placed in writing and sent to you via emailed attachment or fax.

 

As for calling the OC, well, again, depends on the creditor.  Some would talk with customers and then refer them to us, others would negotiate & accept payments others wouldn't even talk to consumers as their phone system, if recognized the number or account information entered into the automated answerer would auto route them to our agency.

Thanks.  I'm gonna send the CMRRR's just in case.  But I'm going to try to call the OC and then *shudders* the DC, too.  Ugh... I hate this.

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Thanks.  I'm gonna send the CMRRR's just in case.  But I'm going to try to call the OC and then *shudders* the DC, too.  Ugh... I hate this.

 

Keep us updated

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I've dealt with Gatestone in the past. Expect the following:

 

* They change the date on their letters (example, they'll mail something on the 26th but date it the 19th)

* Correspondence will be from a WiImington, DE address, but it is actually mailed locally, and there will not be a return address on the envelope

* They try to mask this by using Stamps . com postage, which doesn't get postmarked (look at the zip code on the stamp--that's the origin zipcode and it's always local)

* They ignore C&D CMRRRs

* They will lie to you on the phone (I give benefit of the doubt, but I actually caught them red handed)

 

Nothing too out of the ordinary, but just something to keep an eye out for in case you find it useful. 

  • Like 1

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Ugh.  Sorry I haven't updated this in a while.

 

I think Gatestone actually offered me a settlement on the phone, yesterday.  As before, they said they are only allowed to reduce the total amount owed by $4900 (this time they didn't try to coax a random initial payment out of me).  So, I would be settling around $15K in debt for around $10K.

 

The guy on the phone said this would settle the account in full, but, of course, I will wait to get all the terms in writing before I make any payment.  I call him back on Monday.

 

$10K is still higher than what I'm capable of paying.  What are my chances of getting Gatestone/AMEX to settle for less with a counter offer?

 

Any thoughts on this would be greatly appreciated. 

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I finally have a debt settlement in hand.  Not setting any records, but I'll be glad to get this behind me.  Tell me what you guys think:

 

Dear [itzTHATguy],

 

Per our telephone converstation, you've agreed to pay the Full Settlement Amount as a settlement of the Balance Owed.  Payment(s) will be reflected in the Balance Owed and Full Settlement Amount that are listed below.

 

This settlement offer is contingent upon timely payment.  We will honor this offer if:

  1. We receive the Full Settlement Amount by: [A date in the future]
  2. Settlement payments(s) are made as follows:

               a.   [One lump-sum payment of XXX.XX] due on [A date in the future]

 

Balance Owed                                             Full Settlement Amount

$YYY.YY                                                      $XXX.XX

 

Failure to remit timely payment for the Full Settlement Amount may result in further collection efforts to recover the Balance Owed.

 

American Express may file a form 1099C with the Internal Revenue Service for any cancelled debt $ZZZ.ZZ or more.

 

Other than communication regarding your payment plan, no further attempts will be made to collect the remaining balance while you are making payments in accordance with the terms listed above.  Upon timely payment of the Full Settlement Amount, no further attempts will be made to collect the remaining balance.

 

If you have any questjions, please contact us at [their phone number] Monday through Friday between the hours of [bla bla bla].

 

Sincerely,

 

[some guy I've never heard of.]

[Grand Mufti of Collection]

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Not to me, but I also don't automatically assume contingency, on-behalf-of-OC-CAs are lying when their lips are moving either as some others do

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And done...  Since the settlement letter wasn't explicit about AMEX abiding by the terms, I went ahead and recorded my last phone call with Gatestone.  I had the Gatestone guy acknowledge stuff like 'AMEX will not sell the remaining balance to a JDB' and all that jazz.  I let them know I was recording at the beginning of the call and they said they had no problem with it (not that it was up to them).  ::travolta::

 

Thanks for all the help, guys.  This site really helped. 

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