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CreditVortex

Reached settlement with major retail issued VISA

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VISA credit card issued by a major retailer, final balance owed $6,000 (including late fees and int). Called today talked to an account specialist. They agreed to a settlement of 50%, I have to make 6 monthly payments of $500.00 starting next month. There will be no further fees or interest. The line item on my credit report will show paid/settled for less and have a $.00 balance. I will also receive a 1099C for this year, showing cancelled debt (?) and coded 'G'.  I will file a 982 along with my taxes for insolvency.

 

They are sending me all the paperwork and agreement forms showing the details. I refused to give out my banking information, so I have to go into the local retail store. This will not help my credit report much but should be better than what appears now. I'm also only assuming but it will probably restart the listing date on the credit report.  When looking up my account they needed a SS# which I gave since they obviously have it on the profile of the account and use to access my CR to report for monthly validation.

 

This was my largest default account.

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Sounds good. Did they ever sue you over that debt? Or just up and offered you 50% off?

No, never sued.  I had sent the DV & C&D to the CA law firm handling the first call back in Jun '12.  I indicated on the CD that I was retired, health issues, pretty well insolvent and income from protected sources with few assets.  

 

Since '12 I have cleared up a lot of debt & the 3 years gave me breathing room.  I felt I had a moral issue, I cold called them.  The rep I dealt with was very helpful after I explained my situation & asked what I was offering.  I said I could start repaying the final total with a reasonable interest rate over a 2-3 year span. 

 

They didn't have a program for that but did have a 6 month interest free plan they could offer.   The rep said let me look for the lowest amount we can offer, the bottom line would allow 50% of final total (plus the int and fees that had accumlated until the account was charged off).  It worked out to just over 57% of my original credit limit.  I relooked at my budget and with a few minor changes (lower with holding on SS), canceling cable, adjusting auto ins coverage I could squeeze by for 6 months. 

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This year on Apr 4 I received a collection letter from a CA Law Firm (1) whom claimed they were assigned the debt for collection but nothing about being owned by them. I DV'd on 4/28. Never heard back, debt was for $3,7XX.

 

Also during Apr I decided to work on settling my accounts. I set up a 'settle for less' with the highest balance ($2,9XX – 50% of total) (2) see original post. I currently owe $1,9XX final payoff date 10/1/15.

 

I called the other 4 on Apr 6th.

 

  • Account (1) from the law firm CA, I called Citibank I was unable to offer a settlement at that time, Citibank customer service told me I had to wait for them to get the paperwork back, before the could work on a settlement.

  • One of my accounts (3) was previously sold to a JDB/CA and I decided to wait on them.

  • The 4th a retail account serviced by a finance co. (4) couldn't find anything pertaining to my account and with what information I gave them they said they would work on it and get back with me. Still waiting.

  • The 5th a Citibank/MC (5) also said they couldn't find anything and would take the information and work on it.

 

Yesterday I received an 800 nr call on the phone I had used to query the 4 accounts in Apr. I talked to them and they identified themselves as a collection agency, they were calling about the Citibank/MC (5) they now claimed they owned. I gave them no information beyond identifying myself and verifying the address they had on file. The rep claimed they had sent me a collection letter on 03/26/15 and again a follow up in May. I told him I had received nothing. He wanted to make a settlement over the phone, 'Nope not doing'. He asked me if I could make a good faith $50 payment now and then they would sent me the collection notice, again 'Nope'.

 

  • I told him if they have an offer (40%) then they need to send me an initial collection letter along with their settlement offer, I will request a DV (CMRRR).

  • When they verify it I will send them an unsigned legal agreement (along with a copy of their offer) that they need to sign and send back to me.

  • I will then sign a copy of their signed agreement & include a cashier's check for the full settlement agreed upon. Send it CMRRR.

  • Otherwise I will send them a C&D (CMRRR) putting the ball in their court.

 

Before anything other than the DV happens I will pull my CR through MYFICO to verify that the CA for (5) does in fact own the account (which I suspect at this point) or whether I have to deal with the OC. It will also give me a better road map with the others that may or may not be sold.

 

Am I on the right path for settlement?

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To clarify the information about account (2):  I do have a settlement agreement letter signed by an Account manager, on the OC letterhead.  The gest of the letter states what I agreed to and what their action will be if and when I complete the agreed payment schedule.  I go into one of their retail stores' customer service counter and pay in cash, ask for a reciept that I staple to the back of the letter and have the clerk initial & date it.  I monitor the account balance through CreditKarma.  It shows the balance going down by the amount of my payment. 

 

I feel comfortable with the agreement, it states that once the 6 payments are made they will cancel the remaining balance and issue me a 1099c for 50% of the principal owed at the time of default ($2,100).  They stated they will stop collection attempts at that time, and report to the CR's that the account will show 'Settled for less'.  As I read it, the door is still open for collection if I don't complete my side of the agreement.

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@CreditVortex

 

In April, you wrote:

 

They agreed to a settlement of 50%, I have to make 6 monthly payments of $500.00 starting next month.

 

 

To date, have you made the required payment(s)?

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Thank you BV80, I value your opinion.

 

I began with 7 accounts in default

1.    Wireless account debt cancelled their bad.  They wiped slate clean.  
2.    VISA - Final balance $5,9XX - settling for less $1,9XX remaining on settled amount - 1099C will be sent for $2,1XX (50% of final principal).
3.    VISA - Account cancelled - 1099C (2013) issued for $1,4XX - code 'G' - taxes paid.
4.    Retail Gas card - sold to JDB/CA listed as in collection.  Been 2 years nothing further.
5.    CitiBank/MC - in Limbo for 2 years now received call yesterday - said letter sent (nothing received) I asked for collection letter and they suggested possible 40% settlement.
6.    CitiBank/Retail card - received collection letter in Apr '15 - sent DV Apr 24 '15 - haven't received verification.  Want to settle for less.
7.    Retail Account -serviced by Finance Co. - received collection letter from CA. - DV'd - verified - CD sent nothing in over 2 years.

Retired, health issues, no assets, no insurance, no savings only income from protected sources.  I'm just trying to make myself feel better morally.  Credit Report/FICO score no issue.  I know where the balances are or are going.  I just posted to find out if my proposed settlement offer with a CA/JDB is an accepted path.  I'm got all records and all correspondence with all creditors and CAs.  I've dealt with OC's with some success but have never dealt with a CA/JDB.

My $500 payments started on May 1 thru Oct 1.  Yes I have made May and Jun's payments in cash at our local retail outlet.

 

My home state SOL is 6 years.  Last payment on all accounts 10/10/2012.

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@CreditVortex

 

 

I think I misunderstood.  I thought the call you received was about the account with Visa that you settled for 50% and on which you're currently making the $500 payments.

 

As you stated, check your CR to make sure that it shows that Citibank "sold" or "transferred" the account.  Then see if it shows an entry by the CA who contacted you.  If it has been sold, I'd want the CA to send me some proof that they own the account.  It wouldn't hurt to call Citibank to see if they have a record of who bought it.

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Thanks, will do.  I felt the call was more like a fishing trip.  He named all the parties involved.  The dates he noted were within the same time frame as when I had called all of the other OC owned accounts.  I gave him no more info than to verify my name and last 4.  He recited my correct address back, which I then verified.  I kept asking him to sent the 5 day collection letter, said he would along with an settlement offer.  I will DV and verify as you suggested before anything happens, & no settlement until I have a signed agreement from them. Otherwise I will sent a CD.

 

On my initial call back in Apr, when I was trying to locate the account, I'm sure I gave my name, address & last 4.  I'm also sure I gave the account information from my last statement.   The customer service rep had required that much.  The phone number would show up on their end, so they had all they needed.

 

We'll see what happens from here.

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