Citi Offered a 40% settlement

[Anonymous]

I have a debt with a Citi credit card of $5042, current 119 past due.   I got a letter in the mail that is offered 40% of that at $2017.  It says it will report onto my credit that it is zero but paid less than I owed.  Is this a good course of action, or is it possible to get something better?  This will be my first time dealing witht his type of thing.  Thank you for any advice!

[Anonymous]

I would recommend writing them a PFD (pay for deletion) letter. You can search this forum and you can find many PFD letter samples. In short, tell them you agree to pay the balance that they are requesting in exchange of completely removing the account from your CR. Also do not communicate via phone but only by letters, so that you have a proof of whatever communication takes place. It's a slow process but in some instances it is effective. 

[Anonymous]

While I appreciate people providing advice, Citibank will not do a pay for delete. By the time you write them, they receive it, and write to you rejecting your PFD, the 40% settlement (60%) off deal will likely be expired. Citibank does sue and sometimes places accounts prior to charge off with law firms. That’s a smoking deal, take it and run you have the letter already.

[Anonymous]

I called them and asked if they could lower it. They said 40% is the lowest they can go.  I told them  I'd talk to my brother and call them again.  When I call them, I'm going to give them an actual lower percentage offer  just to see if they will deal with me at all.  If they don't take that, I will just accept at 40%.  

 edit: And you are right, I cannot write them letters without this thing expiring. It expires in a couple days.

[Anonymous]

Yeah Citi isn't gonna do a PFD. If a JDB bought it from Citi and it was in collections , then you'd have a chance to ask for that but Citi isn't gonna. 40 percent is a good offer.

[pipeguy]

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@Anonymouswrote:

I have a debt with a Citi credit card of $5042, current 119 past due.   I got a letter in the mail that is offered 40% of that at $2017.  It says it will report onto my credit that it is zero but paid less than I owed.  Is this a good course of action, or is it possible to get something better?  This will be my first time dealing witht his type of thing.  Thank you for any advice!

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This will still be a ding on your credit report, slightly better than an open collection on a manual review, but as far as scoring it won't make much difference. Considering its a collection (still in-house it seems) the 40% offer is not bad if you can pay it, but DO expect a 1099-C to show up meaning you have to declare the "forgiven" 60% ($3000+/-) as income on your tax return - there are exceptions such as if you are insolvent but you'll need to justify this to the IRS. 1099-C's can show up a year or two later, so keep your records straight.   

[RobertEG]

Federal regs usually mandate charge-off of delinquent credit cards after 180 days.

I would make sure to discharge the debt before they do a charge-off, as once they do so, they can report that CO, adding another major derog.

[Anonymous]

Thank you, you guys have all been really helpful and reassuring about what actions I can take.

[Anonymous]

OKAY!  Wow, I called and ended up taking the offer.  That was some conversation, they really try to pry into your personal life. It was very intrusive and I did end up yelling at the lady on the other line a few times because of it.  Very difficult department to work with but it's done.  Thanks everyone.

[beutiful5678]

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@Anonymouswrote:
While I appreciate people providing advice, Citibank will not do a pay for delete. By the time you write them, they receive it, and write to you rejecting your PFD, the 40% settlement (60%) off deal will likely be expired. Citibank does sue and sometimes places accounts prior to charge off with law firms. That’s a smoking deal, take it and run you have the letter already.

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Can confirm. The CA Citibank sent my debt to sued me last May. Personally, I would take the 40% off deal.