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Look at my offer for my settlement, is this pretty good? Hugh?

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    Look at my offer for my settlement, is this pretty good? Hugh?

    Ok, I have three credit card accounts that I am going to try to settle on. First is with Citi. Total owed is like 14,300 I think. I have'nt paid them in 9 months. It has been charged off. It is with an attorney's office in Florida. So I called them yesterday and they got my info and transferred me to a collection agency, I think. Got a lady, who I guess was hispanic and she "settled" with me for 7,300, a lump sum payment I can make here soon. It was really easy. Kinda scary it was so easy. I told her I would'nt be sending a dime until I got something in writing. I think they are going to fax me something next week. So thats like close to 50% settlement. Is that pretty good? What all should I demand on the papers that will make it official? Can citibank try to come at me for the rest of the money or not? Please give me all info you can to help me make this quick and easy as possible and what to do so I don't get ripped off. Thank you so much. God bless.

    #2
    are you filing bk????

    if so, and you haven't paid in 9 months and you are doing a chapter 7 no asset..i.e. well that debt mostly likely would be completely discharged.

    if you could elaborate a bit on if this is just a collections issue or a pre- bk situation it may be easier to make a few suggestions
    8/4/2008 MAKE SURE AND VISIT Tobee's Blogs! http://www.bkforum.com/blog.php?32727-tobee43 and all are welcome to bk forum's Florida State Questions and Answers on BK http://www.bkforum.com/group.php?groupid=9

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      #3
      Not filinig BK. Looked into it, and were at a 100% payback. No thanks. Just going to settle.

      Comment


        #4
        Originally posted by Shelly3630 View Post
        Not filinig BK. Looked into it, and were at a 100% payback. No thanks. Just going to settle.
        gottcha...i would get the offer in writing for certain then and take the 50% pay off. but they want you to pay it at once as a lump sum? i mean really, if you had that type of money why wouldn't one be paying their bills. although, i do get not paying helps you save up. so, it's much better to pay 1/2 than the total amount. i would take it. but, again, once i got the commitment in writing and with clear simple language that this will absolutely paid the debt in full.

        best of luck to you!
        8/4/2008 MAKE SURE AND VISIT Tobee's Blogs! http://www.bkforum.com/blog.php?32727-tobee43 and all are welcome to bk forum's Florida State Questions and Answers on BK http://www.bkforum.com/group.php?groupid=9

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          #5
          Be very careful of the blowback from a 50% settlement on $14K of debt. You will end up with a $7K 1099-C (forgiveness of debt) for which you will owe $1.75K in taxes (or more). The tax on that could be even higher (over $2.3K) if you are in a different tax bracket. Please don't even think about considering using 401(k) funds to do any settlement. It is just not worth it in the big picture.

          The settlement was easy because you agreed to so much. If the settlement were 20% or less, then it would be a real settlement. The trade line is still going to report as charged off and "settled for less than balance" and stay on your report for 7 years from the time you pay the settlement. Unless you do this correctly, the creditor may also sell the other part -- rather than "forgive" it. That means, the sell the other $7K to a debt collector who then hounds you.

          A vicious circle. (I know that I added alot more here than you believe you asked for, but I'm letting you see just what you are signing up for.)
          Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
          Status: (Auto) Discharged and Closed! 5/10
          Visit My BKForum Blog: justbroke's Blog

          Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

          Comment


            #6
            I agree with justbroke. 50% of the inflated balance is no bargain at all. Remember that before the account charges off, it is assessed months of late fees, overlimit fees, and very high interest (29.99% default APR). My Citibank Mastercard, which I quit paying on in March of 2009 with a balance of $11k--mostly interest--has ballooned to $27k now. So a settlement offer of 50% would be even more than the amount owed at the time of default, and would still leave Citibank with a handsome profit--even before the tax writeoff of "forgiving" $13.5k of bogus charges which I would be expected to pay tax on!

            To be truly worthwhile, a settlement should be equal to, or less than the original principal amount (i.e. the amount you charged on the card). So for a credit card that has charged off, you should be looking to settle for 15% to 25%. Otherwise, it's simply not worthwhile to settle, even if you can afford to. After all, in bankruptcy you can "settle" all your unsecured debts for zero percent!

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              #7
              me too, i agree with jb on the 1099C. that would be a big kick to deal with!

              i know the credit card companies issue them like they are candy.
              8/4/2008 MAKE SURE AND VISIT Tobee's Blogs! http://www.bkforum.com/blog.php?32727-tobee43 and all are welcome to bk forum's Florida State Questions and Answers on BK http://www.bkforum.com/group.php?groupid=9

              Comment


                #8
                Well from what I have read 40% to 50% is a decent settlement. I have two more cards that I have to settle on as well, and I might try to aim for no more than 40%. I know I have to get all this stuff in writing as well. That is the part that does worry me, I don't want to have the credit card companies trying to come after me for the rest. I am hoping that I may can get the other ones settled more towards the end of the year, really early January so this settlement will be the only one for this tax year. I wish I could have filed for BK. No go on chpt 7, too much equity in home, and 13 was a 100% payback. If I can settle the total amount of cc debt which I have, around 28,000 for 14,000 that would be better than chpt 13.

                Comment


                  #9
                  i hear you, however, it will not be a happy day when you 1099 C'ed on all those write offs and have to claim the difference on your taxes!! i would really give this some though as jb has pointed out.
                  8/4/2008 MAKE SURE AND VISIT Tobee's Blogs! http://www.bkforum.com/blog.php?32727-tobee43 and all are welcome to bk forum's Florida State Questions and Answers on BK http://www.bkforum.com/group.php?groupid=9

                  Comment


                    #10
                    Sorry to burst your bubble, but 50% is nothing to rave about.

                    We've been offered far better deals from the companies that actually hold judgments against me or my wife.

                    Under 25% might be worth considering, but count the taxes in as well.

                    Good luck to us all.
                    No person in their right mind files a Ch. 13 with lien strip pro se. I have.Therefore, please consider me insane and clinically certifiable when reading my posts, and DO NOT take them as legal advice of any kind.Thank you.

                    Comment


                      #11
                      As I have mentioned previously, I've had a few offers of 20 and 25%. However, I have very few assets. I know your case is different and I wonder how quickly they will come down for you.

                      So -- one for the pros- --- is the offer dependent on an asset search? If you guys look over Shelly's posts, you will see why she will not file bk.

                      Shelly, I'd like to think you can do better. Good luck!

                      Keep On Smilin'

                      Comment


                        #12
                        BTW, one of the law firms which my charged off Discover was assigned to back in 2010 offered me a settlement of 33%, and that was their first offer, which means that if I was serious and actually had the money to settle, I probably could have got them down to 25%. Likewise, I was offered a 40% settlement on my Citibank Mastercard right after it charged off back in November of 2009. Again, I'm sure that if I was serious and actually had money, I could have gotten them to go lower.

                        Comment


                          #13
                          I don't want to bust your bubble but Citi offered me a settlement of 30% after 9 mos. of not paying and right before they sued me. I ended up filing BK but each case is different. Since you already agreed to the 50, you probably won't be able to get them down any lower even if you try.

                          In your shoes, I would hold out for much better with the others if you intend to settle those as well. They will come down!

                          Good luck, hope it all works out the way you want!
                          Filed CH 7 4/15/11
                          341 5/23/11
                          DISCHARGED & CLOSED ON 7/27/11

                          Comment


                            #14
                            You'll only owe tax on the original principal that is forgiven, not the piled on interest, late fees, overlimit fees, and legal collections fees.
                            Not sure what you do if you get issued an erroneous 1099-C however. Hope you kept good records.
                            Agreed 50% isn't a great deal but if it gets the deal done and you can afford it, so be it.
                            I would try to get in writing an agreement that the credit bureau report will say "paid, satisfied" and that they won't file a 1099 on you. Otherwise I'd hold out for less.
                            filed chapter 13..confirmed...converted to chapter 7...DISCHARGED!

                            Comment


                              #15
                              Your letter should contain language to the affect that the unsettled portion will not be sold, transfered or, assigned to any other party. That the agreed upon amount conludes the matter.

                              Comment

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