Settling Debt. Possible?

[Skye12329]

So last night i had someone come inside to pay their CC bill. No problem and then she tells me her life story and i felt bad but was thinking wouldnt it be better to ignore it and let it go to collections?

Story: 

Customer says she lost her job and cannot afford to pay her maxxed out card with a 25% interest and a balance of 5k. She asks if she calls Citi bank will they possibly settle? What i mean is, her friends and family are going to be giving her a total of 3k and she was wondering if Citi bank settles debt. I said she could ask and worst case scenario is they say no.

She isnt worried about her credit because she says at age 60 she has everything she needs and doesnt plan on buying anything large such as applianes since she just bought it with that card. She also said she wasnt intending for this to be the outcome but she got Lyme Disease and has been battling it for 8 mos...and cannot return to work. 

So back to my question: Wouldnt it be better to just ignore the bill and collections since she says she doesnt need anything else (i didnt tell her that btw, just to call Citi)? Also do CC companies settle debt like take offers or is that only collection agencies? 

[Anonymous]

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@Skye12329 wrote:

So last night i had someone come inside to pay their CC bill. No problem and then she tells me her life story and i felt bad but was thinking wouldnt it be better to ignore it and let it go to collections?

Story: 

Customer says she lost her job and cannot afford to pay her maxxed out card with a 25% interest and a balance of 5k. She asks if she calls Citi bank will they possibly settle? What i mean is, her friends and family are going to be giving her a total of 3k and she was wondering if Citi bank settles debt. I said she could ask and worst case scenario is they say no.

She isnt worried about her credit because she says at age 60 she has everything she needs and doesnt plan on buying anything large such as applianes since she just bought it with that card. She also said she wasnt intending for this to be the outcome but she got Lyme Disease and has been battling it for 8 mos...and cannot return to work. 

So back to my question: Wouldnt it be better to just ignore the bill and collections since she says she doesnt need anything else (i didnt tell her that btw, just to call Citi)? Also do CC companies settle debt like take offers or is that only collection agencies? 

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I may be wrong but i think its against forum policy to talk about letting debts go like that on purpose.

If not, I agree that that would be prudent for her, but many people cannot fathom doing that. when they borrow something, they pay it back. their word is bond so to speak. 

I'm sure they will settle, but more typically they reduce APR for a set number of months and allow you to make fixed payments.

[Anonymous]

60 is not as old as it used to be, she's potentially got another 25 or 30 years ahead of her, and in that time I find it hard to believe her score won't ever matter.

[RobertEG]

Unless SOL has expired, she is not the final decision maker on the need to pay delinquent debt.

If a court issues a judgment, the creditor could then seek a writ ordering specific satisfaction of the debt, such as via attachment of assets or garnishment of pay.

She should consult an attorney regarding whether her pay or assets can be attached or garnished if the debt is still within SOL.

[Anonymous]

Considering the issuer and the amount involved, letting it ride to SOL may work out fine. Though, that assumes SOL is somewhat near...

If she's in say Rhode Island,  Montana, Kentucky, among some others with very long SOLs, that makes for a much longer road. Another aspect to consider is not just SOL, but her jurisdiction. Filing suit is more productive in some locales than others. For example, Pennsylvania is among just a handful of states, which do not allow wage garnishment for CC related debt - that makes collecting a judgement somewhat harder, and potentially less worthwhile.

Anyways, not paying comes with huge tradeoffs (more difficulty in obtaining credit, losing credit, higher insurance rates, collection calls / letters, etc), and given the info you've provided, the better route is for her to negotiate a lower, fixed rate to payoff the balance. If unable to negotiate a fixed rate below 10%, or ideally, below 6%, with reasonable size payments on her own, then she should consider participating in a debt management program operated by a reputable non-profit  that can make it happen.

[Anonymous]

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@Anonymous wrote:

60 is not as old as it used to be, she's potentially got another 25 or 30 years ahead of her, and in that time I find it hard to believe her score won't ever matter.

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Thank you!