Citibank Settlement

I am trying to reach a settlement with Citibank for credit card debt. How can I convince Citibank to settle for less than 60%?

I have been successful in negotiating settlements with American Express and Chase, but have not been able to get Citibank to settle for less than 60% of the balance. American Express settled for 20% on two accounts. I have been making a lot of noise and finally got in touch with a SVP of Recovery for Citibank after complaining that their collection agency and law firm that they gave my file to would not work with me or return my phone calls. The SVP was nice about everything, but would not budge from 60%. He even agreed to allow me 12 months to make payments, etc. Do you have any other feedback or information on Citibank? Is this a good deal? My total balance was $27,000 so 60% is $16K which will be difficult to come up with.

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Bill's Answer
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Bills.com Team
Pro

By Bills.com Team
April 2, 2010

Highlights


  • A 20% debt settlement amount is an excellent figure.
  • All collection agents must follow federal rules.
  • Citibank has a reputation for sharp negotiation policies.

Your two 20% debt settlements with American Express and Chase are exceptional because the customary range for credit card debt settlement is 40% to 60% of the total debt. Your success with Chase and American Express has raised your expectations to a level you may not be able to match when resolving your Citibank account.

Let us review your facts. It appears you are not negotiating directly with Citibank anymore, but are instead negotiating with a collection agency. Therefore, Citibank no longer owns your collection account. Read the Bills.com resource negotiating techniques to help you work with either the original creditor or a collection agency, which purchased your collection account for pennies on the dollar.

A brief word about law firms working in debt collection. A law firm can represent the original creditor or a collection agency. Recently, however, I have seen an increasing number of law firms entering the business of purchasing collection accounts. A law firm acting as a collection agent has no special or different status under the law than any other collection agent — all collection agents must follow the rules under the Federal Debt Collection Practices Act (FDCPA), and local state laws regarding debt collections. Law firms must also follow the rules of professional responsibility in the states where they operate.

Debt Tips and Tools

Bills.com has many tips for handling a debt dispute, including sample letters that you can edit and use to demand that creditors cease harassing you. When it comes to debt negotiating some basic terms and tips will help you understand what to expect.

Recommendations

It is always advisable to take careful notes of your conversations when negotiation debt. Record the name of the representative you spoke with, and the date and time of the conversation. Also, ensure any settlement agreements negotiated are reduced to writing before making a payment.

Citibank has a reputation for being a sharp negotiator regarding credit card debt. If you are negotiating with Citibank directly and the negotiations are not satisfying, you may wish to wait until Citibank sells your collection account to collection agent that is more flexible.

Another option is hiring a debt resolution company. Negotiating debt is difficult and scary for many people, but it can be done. If you do not succeed on your own, hire a professional to do it for you. You can get help for your debt. See the Bills.com debt resolution savings center to get no-cost quotes from pre-screened debt resolution firms. Learn about additional ways to get out of debt with the Bills.com no-cost debt help services guide.

Additional resources

I have answered other reader questions regarding Citi credit card accounts. See Renegotiate Citi Credit Card Settlement Agreement to understand your options if you have a settlement agreement with Citi you can no longer afford; Citibank Hardship Program for tips on how to enter Citibank’s credit card hardship program; Negotiate Citibank Debt to learn what to expect when negotiating debt with Citibank; and Settlement on a Citibank Credit Card to learn how Citibank’s internal debt settlement goals vary from time to time.

I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com

4 Comments

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  • 35x35
    Apr, 2012
    Jay
    Citibank sold my debt to a law firm who in turn sued me and placed a lien on my home. My last payment was made in August of 2007 & a summons was received on July 30th. is that inside the SOL? What are my options?
    0 Votes

    • 35x35
      Apr, 2012
      Bill
      Two thoughts:
      1. Read the Bills.com resource Statute of Limitations to learn how to use a statute of limitations affirmative defense properly.
      2. Consult with a lawyer who has consumer law or civil litigation experience to learn if you can appeal the judgment, or have another legal tool to wield in your situation.

      For the benefit of other readers, when a creditor files a lawsuit against you, consult with a lawyer immediately to learn how to mount an effective defense. In all states I am aware of, the defendant must raise the statute of limitations defense in a timely manner — a court will not do it for the defendant. Ignoring a lawsuit does not make it go away even if you think the case was filed after the statute of limitations expires. However, if you learn of a lawsuit after the fact, then consult with a lawyer about vacating the court's decision.

      0 Votes

  • 35x35
    Dec, 2010
    Shay
    when a debt collector has my account is Citibank their actual client? If not, why do they want me to make check payable to Citibank? Thanks.
    0 Votes

    • 35x35
      Dec, 2010
      Bill
      Collection agents work in two ways. An original creditor can hire a collection agent that will attempt to cajole the debtor into paying the debt. In this case, the collection agent is basically an outside temporary worker who must follow the original creditor's policies and direction.

      Or, an original creditor has the option to sell, gift, or trade a collection account to a collection agent. If the collection agent owns the account, it can collect how much ever it wants from the debtor, and need not follow the original creditor's policies.

      If the collection agent directed you to make your check payable to the original creditor, then the collection agent is working on behalf of the original creditor, and does not own the collection account.
      0 Votes