What happens when you go on a payment plan?

[Anonymous]

What happens when you go on a payment plan?  I have 2 Citi cards that have recently increased their rates.  I pay an extra $45.00 a month in interest due to this increase and it is hurting my ability to pay.  I just got back on my feet from a job loss and now I am making progress chewing these balances down.

If I ask for one CC to go on a plan, what would happen to the other account?  If I ask to go on a plan for both Citi cards, how does that affect other CC's?

If I go on a plan at all, what does that do to my CR?  Is going on a plan and getting the balance paid off faster going to increase my score more than if I did not go on a plan and continued to have my CR pulled down due to too much debt to credit? 

FYI.  Never missed or late on any payments in the last 10 years....  don't know for how much longer though.

Thanks

[Anonymous]

Hey Mike!

A few years ago i got in over my head on my CC's and went into a payment plan with Citi and the one stipulation was that they would have to close my account. At the time my accounts were showing 120 days late but as soon as I enrolled in the program Citi started reporting them as on time and they stopped charging me late fees and over limit fees. I don't remember if it was one or two years but after a while of making my payments on time and being good they opened both of my accounts back up. Through out this whole process my APR was never more than 11% and to this day it is still at 9.24 and they never CLD'd me ever. I think its worth it to go through with it. The only negative thing was that they closed the accounts but that is small compared to having to worry about making payments

[fishbjc]

 Can you try to work with them on the interest without doing a hardship?  If not, you can enter into a payment plan with them, but they'll probably shut your limit down. 

Your other CC's won't be affected by this unless they pull an AR on you.  If they see your accounts by Citi marked as CLOSED, they may cld you.  Ask Citi first how they report to the CRA when you're on a hardship plan.

If your current limit is, for example, $10,000 and you owe $8,000....you do NOT want them to report your limit as ZERO.  If they maintain it on the CRA as $10,000 you'll be ok.

[Anonymous]

I did this with Citi many years ago and while it seemed like a good idea at the time, I later had trouble making the agreed upon payment and was again reported late.  Due to the reaging, I would have had to wait 7 years for the new late to fall off my CR.  After I got caught up again, I disputed the most recent late reports on the grounds that I never agreed to or wanted a re-age so the date of first delinquency was actually several years earlier and the debt was now too old to be reported delinquent.  The dispute worked.

I tell everyone that if they get behind and reported as late, don't catch up until you are able to STAY caught up because once you get caught up and fall behind again that resets the 7 year clock.

[Itsmeagain]

Good post Vators.  Most people don't realize what effect that bringing the account current can have down the line.  If it is never brought current then the Statute Of Limitations for both reporting and collection remains as the first date the account became deliquient (DOFD).  Please understand mods; I'm not advocating not bringing the account current.  We should all endeavor to pay promptly and in full.  But, in a credit crisis, when you're doing all you can do and it still isn't enough, it's time to learn the rules of the game.   

[Anonymous]

Thanks all.  This is a great place to get insight on what direction to go.  I appreciate all your responses?