- A 20% debt settlement amount is an excellent figure.
- All collection agents must follow federal rules.
- Citibank has a reputation for sharp negotiation policies.
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.
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.
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.
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.
Struggling with debt?
Debt is used to buy a home, pay for bills, buy a car, or pay for a college education. According to the NY Federal Reserve total household debt as of Q4 2022 was $16.91 trillion. Auto loan debt was $1.55 trillion and credit card was $0.99 trillion.
A significant percentage of people in the US are struggling with monthly payments and about 26% of households in the United States have debt in collections. According to data gathered by Urban.org from a sample of credit reports, the median debt in collections is $1,739. Credit card debt is prevalent and 3% have delinquent or derogatory card debt. The median debt in collections is $422.
Collection and delinquency rates vary by state. For example, in Indiana, 17% have student loan debt. Of those holding student loan debt, 9% are in default. Auto/retail loan delinquency rate is 4%.
To maintain an excellent credit score it is vital to make timely payments. However, there are many circumstances that lead to late payments or debt in collections. The good news is that there are a lot of ways to deal with debt including debt consolidation and debt relief solutions.
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.
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.