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Advice and Tips for Settlement on a Citibank Credit Card - The Bills.com Blog
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Advice and Tips for Settlement on a Citibank Credit Card
Question: I have had a card with a balance between $13,000 and $14,000 for over 4 years. It has been sent to collections I believe 3 years ago. I have settled all other credit card accounts, however, this one company (CitiCard) has offered a settlement and then upped the amount at the beginning of the new year putting it out of reach. At this point, I've paid afew payments of $300.00 to keep fees from racking up but a recent set back caused me to ignore their calls in the past two months. They say they can't accept those sorts of payments forever. They are persistent, act like a lawyer is calling me and engage in other tactics that I've become wise to. I'd like to settle with them but for the original settlement offer (50% vs. the 70% offer they upped it to this year.) Should I go ahead and call them or wait until closer to the end of the year? I really need a few months to get enough together for a settlement as I have little extra cash. However, every time I talk to them, I often wish I hadn't or end up more worried about it. After having settled $41,000 in debt with other accounts within the last year, this one is hanging out there with no end in sight. I'd really like to just get this one off the books and start building my life back. I no longer use cards, however, I can't move ahead with this one hanging out there for $14,000. I ended up racking up this debt when my fiance lost his job the day our son was born (fired for going to hospital within 90 probationary period for new hire, less than consistent work history ever since, etc.) I am not debt savvy and often get intimidated into things that really unless I agree to them the company can't make me do, etc. I need some advice.
Answer: Settling with creditors can be an excellent way to resolve outstanding debt; unfortunately, it can also be a complicated and sometimes difficult process involving multiple rounds of negotiations, strict due dates, and of course, the need to raise the money to actually pay the settlement. Thankfully, you already have a good bit of experience in negotiating with unsecured creditors. Congratulations on your reaching settlements with your other creditors;
settling $41,000 in debt is quite an accomplishment. After negotiating on so much other debt, settling with CitiBank on this final account should not be too much of a challenge, though I will admit that CitiBank can be somewhat difficult when it comes to accepting settlement offers. Regardless of this reputation, I have seen CitiBank settle with consumers on reasonable terms on many occasions, so you should not allow the bank’s current demands to force you into a less favorable agreement.
It is not uncommon for creditors to change their internal settlement parameters from time to time. Therefore, it does not surprise me that CitiBank’s 50% settlement offer changed at the beginning of the year to the higher 70% offer. But these periodic changes can also go in the other direction, so even though they will only accept 70%, their guidelines could change again next month, allowing for the 50% offer to be accepted. You should continue to communicate with CitiBank to express your desire to settle this account, but to also insist that you cannot settle for more than the 50% previously offered. As far as the funding of the settlement, you should certainly try to raise the necessary funds as soon as possible to be prepared if CitiBank does decide to accept your offer. Many creditors request payment within a relatively short time frame once a settlement is agreed upon; however, I would still continue to communicate with CitiBank as long as you think that you can raise the funds needed to pay the settlement, if accepted, within a couple of months. In some cases, creditors will allow 30 to 60 days or more to finalize the payment of a settlement amount, as long as a significant portion of the settlement can be paid soon after the agreement is finalized. However, you probably should not call CitiBank and make
offers that you cannot realistically afford to pay; if they accept an offer and you are unable to pay the settlement, it could damage you ability to negotiate with them in the future.
The key to successfully negotiating with your creditors is not let strong-arm collection tactics intimidate you and pressure you into accepting an agreement which you cannot afford or which you do not feel is in your best interest. Many people choose to hire a third party debt negotiation firm to work with their creditors on their behalf because it is much easier for a third party representative to remain emotionally detached from the situation. You should focus on your goal of settling the account and keep in mind that much of what collectors will tell you is designed to frighten and upset you, which can make it easier for the collectors to force you to make a decision that may not be in your best interest. This account is large, and you could very credibly state that a Chapter 7 bankruptcy is not out of the question for your situation if CitiBank will not agree to settle this account for an amount that you can afford. You may wish to tell them that you had to scrape up the money to meet the 50% offer and you have exhausted all of your financial resources. Once you reach an agreement with the creditor, make sure that it sends you a copy of the terms in writing before you make payment.
If you would like to learn more about negotiating with your creditors, I invite you to visit the Bills.com website . I wish you the best of luck in reaching a favorable settlement with this creditor, and hope that the information I have provided helps you Find. Learn. Save.
Best,
Bill
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