Do I accept their offer?

[FoolMeOnce]

I have 10 credit card accounts totaling about $60K, no payments made for the past 10 months - my business was closed (and still is) due to Covid in CA. It seems most accounts have been charged off and/or sold because I'm starting to get letters from 3rd party collectors; So far, Discover is the only one who has sued me for $5600.  Today, I received a letter from MRS for two accounts(Chase Bank) totaling $12,500; they included an offer for a lump sum payment of $2031 to settle both accounts due by 4/28/2021.  That seems pretty good to me - its 16%.  But I know if that is their first offer, they will probably go lower.  Should I accept this offer or hold out for another month or two?  Does anyone have any experience in dealing with them?  

Thanks in advance!

[BackFromTheDebt]

2 hours ago, Sully1231 said:

I have 10 credit card accounts totaling about $60K, no payments made for the past 10 months - my business was closed (and still is) due to Covid in CA. It seems most accounts have been charged off and/or sold because I'm starting to get letters from 3rd party collectors; So far, Discover is the only one who has sued me for $5600.  Today, I received a letter from MRS for two accounts(Chase Bank) totaling $12,500; they included an offer for a lump sum payment of $2031 to settle both accounts due by 4/28/2021.  That seems pretty good to me - its 16%.  But I know if that is their first offer, they will probably go lower.  Should I accept this offer or hold out for another month or two?  Does anyone have any experience in dealing with them?  

Thanks in advance!

Nobody except you can tell if this is a good deal or not. 
 

Here is the situation.  It appears MRS is a JDB, correct?  They probably bought the debt for 5-10% and want to make a quick small profit by settling for 16%.  Not bad for you, and 16% is a very, very low settlement offer.  
 

OTOH, Chase has an arbitration provision. In general, JDBs don’t follow into arbitration.  They might, but that is rare.  There is also the possibility that you will get a horrible judge who will deny your MTC if filed.  
 

It is possible they will never sue.  Don’t count on that. 
 

Here are your two main ways to fight this. 
1.  Pay the $2031. Make sure you have an iron clad agreement that this will completely settle the debt and they cannot sue you nor sell the balance of the debt.  The debt must be either removed from credit reports or else marked as settled for less than the complete amount.  Then you are done. Finished.  That’s all. 
 

2.  Wait for them to sue you.  This may be one or two suits.  You will have to pay the CA fees to answer the suits and file MTCs.  You might be able to combine the cases in arbitration.  Your arbitration  fees may be $0, $250, or $500. 
This route is cheaper but takes a lot more of your time.  
 

Here is the question you and only you can answer:  Is it worth the $2031 to get this case out of your way once and for all, so you can have time to fight the other cases? 
Or are you so short on money you would rather fight it out and save at least half the money?

 

When you have answered that question in your mind you will know your strategy. 

[Clydesmom]

Pump the brakes on arbitration for a second.  You said:

11 hours ago, Sully1231 said:

I have 10 credit card accounts totaling about $60K, no payments made for the past 10 months - my business was closed (and still is) due to Covid in CA

Are these business credit cards with a personal guarantee to only personal cards?  The reason is if they are business debts then the consumer rules for arbitration will not apply and the costs get split between both of you and it can get really expensive very quickly.  Arbitration is NOT the best option typically for business debt.  The other major issue is the FDCPA does not apply to business debts.  

11 hours ago, Sully1231 said:

But I know if that is their first offer, they will probably go lower.  Should I accept this offer or hold out for another month or two?

Chances they go lower instead of suing are slim to none.  16% on a five figure debt is as good as it gets.  I would grab that and run.  Get a signed settlement agreement with all terms in writing before paying.   Especially if this is a business debt.  

You need to identify which card(s) are business only or mixed and keep them separate in your strategy.  The way to defend business debts is very very different from consumer alone.

[BackFromTheDebt]

Good catch by @Clydesmom.   

I somehow assumed these were consumer credit cards, and the business failure was unrelated.  

If these were in any way associated with your business, just grab the settlement and run with it.  

If these are absolutely consumer cards, you have a choice.  I usually would recommend taking the $2031 settlement if you can possibly afford it.  If you can't afford that money, you have the much more time consuming plan of trying to fight in arbitration, but realize that court fees and JAMS fees could total about $1000 or so.  For MOST people, the extra $1000 is worth getting rid of the headaches once and for all, and spending your time fighting other cases.  

[FoolMeOnce]

Thank you very much for your replies and advice.  

These are all personal credit cards; however, some purchases made were for business inventory.  Would that cause them to be considered 'business cards'?

And I agree, this is a pretty low offer, so I will probably take it so I can focus on the other cases.  

[BackFromTheDebt]

26 minutes ago, Sully1231 said:

Thank you very much for your replies and advice.  

These are all personal credit cards; however, some purchases made were for business inventory.  Would that cause them to be considered 'business cards'?

And I agree, this is a pretty low offer, so I will probably take it so I can focus on the other cases.  

It is not clear if these would be considered business cards.  Probably not, but why risk it?

[FoolMeOnce]

I agree. I'll continue to post as I progress on this journey.  I'm learning a lot here.  Thanks again!

[FoolMeOnce]

I just settled with MRS Associates (CHASE); Total Owed $12,697 on two cc accounts; Their offer letter to me was $2031 for both; I called and basically told them my situation: "not working due to Covid, need to settle 6-8 other creditors, don't have a lot of money, I am calling a few today to see who will work me with me, I only have $1500 to work with right now and I'm hoping we can work something out."  

I didn't mention the letters, so the rep tried to offer $3000 for just one of the accounts. I just said, there is no way I can do that, I only have $1500. Then she came down to $2000; I held at $1500; she transferred me to her 'supervisor' who I again told my story to.  She came back and offered $1650 to settle both in full - that's 13%!!!  She emailed the settlement letters, did a payment over the phone and that was it. 

I did verify with Chase that MRS took over the accounts just to make sure they were legit before I called them.  I was nice and pleasant with the reps, no need to be mad or overly aggressive - they are just doing their job; and imagine if you were in their shoes. 

I also waited until the end of the month to call them; this was the only the second offer letter they sent me; the first was for $3000 for both accounts, so it does help to wait a bit.  

This was my first attempt at negotiating to settle and I just want to give hope and confidence to others so you know it is definitely possible to get a good deal, especially in these difficult times. 

[BackFromTheDebt]

Thanks for the update. 
 

This is a victory for you.  Feel free to do a victory dance.