My Experience Settling a Credit Card Debt with Citibank: Paid, was a charge-off

If you are looking for information on how to settle a credit debt with Citi, then you are probably familiar with the following:

“The above referenced account has placed with our company for collection. We’ve tried to reach you in an effort to discuss the account but have been unsuccessful in that effort. Your account however, remains in an active collection status…”

You are also probably trying to find the best way to proceed. I should’ve done the same thing before trying to settle my debt. Unfortunately, I didn’t.

The Citi Platinum Select Master Card was my first credit card. I got it when I was a struggling college student and I didn’t handle credit wisely back then. Hopefully, my experience will shed some light on what you should do when calling a collection agency.

This debt had been haunting me for a long time and when I finally did something about it, my card had been delinquent for more than a year and a half. I had received a letter from a collection agency by the name of Protocol Recovery Service, Inc., in which they offered me four different settlement options: one reduced lump sum or three different monthly payment plans ranging from 2 to 10 months. The 10 month plan was the longest but also the most expensive, about four times more than the lump sum. The lump sum was half or less of what I originally owed.

I called Citi Cards to see if I could deal directly with them instead of a collection agency, but it was too late. My debt had been sold to “Protocol Recovery Service”. So I finally gave them a call. I was anxious to pay off my debt and chose the lump sum settlement without thinking too much about it. Unfortunately I had not done my homework before calling this collection agency, and didn’t take the appropriate steps.

I didn’t negotiate the amount to be paid, I didn’t ask for a permanent deletion of my debt from my credit files, I didn’t ask for anything in writing and I paid over the phone by check. I was told there was an extra charge because the settlement offer they had sent had already “expired”, and I fell for it. I was also told I was going to receive a letter stating that I had settled this debt. I never received anything.

I chose to pay the lump sum because it was the cheapest option, but knowing what I know now, I would’ve tried negotiate to get the collection off my credit report (even if that meant paying in full). The account now appears as “Current Closed” and “Paid, was a charge-off“. A charge-off is one of the worst things you can have on your credit report. A paid charge-off looks a little better but still nothing to be happy about. If I had known I had other options, I would’ve tried to get the “charge-off” deleted from my credit files. From what I’ve read, most people say that Citi will never agree to this, but at least I could’ve tried.

Months later I tried calling Protocol Recovery Service again, but I wasn’t able to convince them to take the charge-off from my report. It was too late, they already had my money.

Since settling this credit card debt I have been able to successfully remove two delinquent accounts from my reports by negotiating with the collection agencies (“Pay for Delete” as some people call it). So I can confirm this is definitively possible.

So, what should you do when calling a collection agency to settle a debt? Here’s what a lot of experts recommend:

  • Get a copy of your credit report from one of the three credit bureaus and find out which collection agency is reporting your debt.
  • Before you attempt to settle a debt, check how old your debt is. A negative mark on your your credit report will disappear after seven years.
  • It’s usually best to negotiate with collection companies via regular mail, so you have written proof of all your actions.
  • Negotiate the amount to be paid, most companies pay literally pennies on the dollar for the debts on which they are trying to collect.
  • Ask for a permanent deletion of the debt from your credit report (a deletion is possible, but that doesn’t mean all creditors will agree to it).
  • Get everything in writing. If you don’t have it in writing, it’s like it never happened!

Keep researching about this until you are confident and ready to make a move. Make sure to leave a comment with your story or if you’ve had any success negotiating with collection agencies. Here are a couple of good articles on this subject:


  1. ambersun says

    Thanks, I actually had a old cable bill that went to collections and i did the pay for delete letter and it worked. I haven’t done anymore but I will try for the ones I have soon when I’m able to do so.

  2. Chip says

    Hi- I got a pay off amount from citibank for 2,500. Also, in my research I’m told that it is now illegal to remove correct information from a credit report and that paying the full amount way letter doesn’t help one lick. Is that true? Where’s the real evidence?

  3. says

    Hey Chip. It’s supposedly illegal to remove correct information from a credit report, but it is also known that some agencies or banks are willing negotiate “Pay for Deletes” with their debtors. Since writing this post I’ve been able to successfully remove two other delinquent accounts from my reports by negotiating with the collection agencies, so I can confirm this is indeed possible. From what I know Citi will definitely be tough to negotiate with, but you might still have a chance if your debt is not too old. Give them a call first and see what you can do. If this doesn’t work send them a letter. Thanks for your comment.

  4. grace says

    What exactly should i ask the collection agency for with respect to my credit report? My account with Citibank was recently charged off to United recovery systems and i am in process of negotiating a settlement payment. What wording should i be asking for on my credit report? citibank said that a “charge off” cannot be removed from my credit report.

  5. Caleb says

    Hello People,

    I’ve worked with the debt collection agency. Trust me they are willing to settle for anything.They are hungry for money. They will put a lot of pressure on you and squeeze you so tight, until you are empty. You gotto be aggressive while talking to them and remind them, you are willing to work out, take it or leave it. No matter how scared you are or concerned about your credit report, do no smell them this fear. Because then they will never reduce a penny for you and they will know sooner or later you will come back to them.

  6. ebrn says

    Recently rec’d notice re: accrued interest on a Citi-Bank charge card not paid. Served in 2010, I did not attend the court hearing, and thereafter disregarded correspondence regarding the delinquent card, as I had lost my job, and could not pay on it. Now, my only income is social security, automatically deposited. They (Citibank) is the only creditor that is hounding me. I intend to negotiate, and am hoping to do so before they attach my bank account!
    1. Can the collection agency attach my social security $$ as I have no other funds in the bank account?
    2. If I open another account, will they find that one?
    3. How does one locate a persons bank account?

    I am almost 80 years and in ill health. Thanks for any help you can give.

    • says

      Hi there ebrn. You can rest assured your social security money is safe, by law, social security income is exempt from garnishment except in cases where the debt is owed to the government, child or spousal support. Please read the following article, where you can find all of this information:

      How does one locate a persons bank account? Let me answer by quoting the article I just mentioned:

      If a creditor sues to collect a debt you owe and wins a court judgment against you, the creditor can ask the court for an order to garnish your salary, bank account, or other assets. The court order would instruct your bank to turn over money from your account. However, federal law says that many federal benefit payments like Social Security benefits, Supplemental Security Incoame (SSI) benefits, Veteran’s (VA) benefits, Railroad Retirement benefits, and benefits from the Office of Personnel Management are not subject to garnishment in most cases – which means that this money is exempt. (For some benefits, there are exceptions for money owed in child support, spousal support, or for federal taxes.)

  7. ebrn says

    To find you was a god-send. You have truly given me peace of mind regarding garnishment of Social Security benefits. My credit score is another issue. I cannot pay for bankruptcy and start over, so will live with crappy credit for the rest of my days.

    I cannot thank you enough!! God bless. :-)

  8. PG says

    Any advice would be appreciated, I live in CA, in 2010 I agreed to a repayment agreement with Citi on a delinquent account interest was dropped to 3%, paid on time for three yrs balance was down to about $2800 or so, lost my job stopped paying the agreement, which nullified the arrangement. I called them recently to ask about setting up the same arrangement, which they denied. the account has been accruing interest again at 27% balance is now up to $4k which is stressing me out. First question, is this legal to start charging interest again? Is there anything I might be able to do that Im not aware of. I asked about settling but they want to base it on the new balance not what I had paid it down to which is upsetting. Not really sure where to go grom here any advice on how to stop interest from accruing would be great. Lastly if I ignore it completely will the entire account drop off my credit or will I still owe the balance? And is the 7yrs based on the original date the account became delinquent or the newer date from when I stopped paying the arrangement? Thank you all in advance

  9. Jpmillman says

    I recently received the call from collections. I have the money to pay in full.
    I paid the minimum and have arranged to pay in full. Should I try and negotiate a lower pay off? Will it still show as a charge off? I was told right now it is showing as deliquent, I have 30 days before it shows as defaulted.
    How should I proceed?

  10. dM says

    I have a similar situation and am anxious to see what your answer is. I was with a debt management company for 2 years. In January of 2014 the Debt management company did not send my payment out on time and therefor it became late. I contacted the Debt management company and was told the account was in good standing and would be okay. However, again in March the same thing happened. I decided it was time to switch to a different debt management company which I did. When they sent in the proposal Citibank declined it. I called Citibank and was told that it would be reinstated if a resubmittal was sent before Sept 22, 2014. The debt management company sent in the resubmittal on Sept 15, on Sept 18, citibank declined it again, due to the Debt Mgmt co. not submitting the proposal with the proper ID number. I contacted Citibank today 9/23/2014 and was told that I was past my 90 day reinstatement time frame and that no debt management offer was available. I am not in the process of working with the hardship department. If they cannot offer any help to me I will be forced to file bankruptcy. As I am unemployed and taking care of a disabled child. I am sickened by the way this is being handled. I have done everything possible to handle my debt responsibly, and switching debt mgmt companies was what I thought to be a good idea since they were not doing their job correctly. However, now I am in a mess. Higher interest, higher payment and I am being told they will not work with me. Is there any suggestions or any help I can receive?

  11. AnnDy says

    Hi, This is very helpful. To all who can advise me. It wa 5years ago when I got my Equicom (30k credit limit) and BPI (10k) credit cards. I was young and newly grad way back then and totally careless with my financials and ignorant with consequences. Last week, I applied for Personal Loan and got declined. I was told that I should remember if I have Hi, Anyone out there. I hope you can help me. I have unsettled credit card debts. Now I am ready and more capable to settle these. Until I read this article. These are my concern:
    1.) I dont know which collection agency is currently handling my account.
    2.) My debt is turning 5 years old I read something above saying —- “A negative mark on your your credit report will disappear after seven years.”
    Meaning I can just wait for two more years and be eligible for personal loan. Please help me. Thanks in advance.

  12. Justin says

    I know this article is for Citi bank Credit Card but I was hoping you can help me with this, I didn’t pay my American Express for 6 months and 3 days ago ARSI (American Recovery Service Incorporated) Called me, and of course I paid small amount of the balanced I owed and promised to make more payment on the future. I check my credit report right away at it does not have any remark beside the 90 days late, but my question is would day mark it later after I pay off my bill to ARSI?
    2. If ever there’s a ‘charge of’ mark or ‘collection’ mark who should I called to make deal to remove the sign? American Express or IRSI collection Agency?
    Thank you so much

    • says

      Hi Justin. An account is usually charged off after 180 days or six months of non-payment. If a collection agency already called you and it has been 6 months, most likely, your account has been charged off. However you should call American Express to find out the status on your debt and try to negotiate directly with them first,

      If they already charged off your debt and sold it to a collection agency, then you’ll need to negotiate with the collection agency. Check your credit report and find out who owns the debt. Call them and ask for a permanent deletion of the debt from your credit report in exchange for your payment.

  13. gwen cunningham says

    I just want to know the name of the coll agency citi cars uses I lost the address that I send payments to.

  14. shell says

    I am currently experiencing a hardshipbut have not gone delinquent. I am sacrificing my groceries and a few other things to not go delinquent. I called Citi last night to discuss the issue but they say I have to go delinquent to discuss, at which point they can only offer a different pmt plan. Any suggestions how to ask for a decrease in interest rate with this new pay plan. I am disabled & my dr bills are growing eà month. They evidently don’t offer debt foregivenes and is there anyone who got help before it went to collections? I am just trying do the right thing and they surely don’t seem to care about that. Sadly.

    • says

      Hi Shell. Have you thought about doing a balance transfer? This would give you more time to pay with a lower interest rate. Many cards offer introductory periods of 0% interest on transfers for 6 to 18 months.

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