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Can Citibank cancel my mortgage if I default on my credit card payments?
We have two credit card accounts with Citicard in default. One is for $14,500 and the other is for $18,500. We recently were served papers showing a court date of 3/1/09. Since it is now in the hands of a law firm, is it more difficult to arrive at a settlement under 50% since there are now attorney fees accruing? Also our personal home mortgage is with Citibank. Could this have any bearing on being able to settle?
I have seen no evidence to suggest that attorneys drive harder or softer agreements than collection agents. Open negotiations with the law firm and see what you learn. You will be in a much stronger position if you can scrape together a lump-sum settlement. Open negotiations at five cents on a dollar of the original balance, and work up from there. If you have to negotiate a payment plan you are in a much weaker position, because isn't it a payment plan that you defaulted on to get you into this position?
Regarding your mortgage, review your loan documents carefully to see if Citi reserves a right to pursue private collections actions on your debt.
I hope this information helps you Find. Learn. Save.
Best,
Bill
Did you know?
If you are struggling with debt, you are not alone. According to the NY Federal Reserve total household debt as of Quarter Q4 2023 was $17.503 trillion. Student loan debt was $1.601 trillion and credit card debt was $1.129 trillion.
According to data gathered by Urban.org from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 10% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.
Each state has its rate of delinquency and share of debts in collections. For example, in South Carolina credit card delinquency rate was 4%, and the median credit card debt was $402.
Avoiding collections isn’t always possible. A sudden loss of employment, death in the family, or sickness can lead to financial hardship. Fortunately, there are many ways to deal with debt including an aggressive payment plan, debt consolidation loan, or a negotiated settlement.
