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

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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:

Comments

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  2. over the years late payment history hurt my credit report and did my score so bad. i got to a point where i needed to get business loan/car loan to start up a private uber service and also pay my child college tuition . before then i knew i was going to need the loan. so i started doing everything right and working on my credit score before then . i tried several self improvement methods and also crediting my account paying debts upfront before date due. but no improvement . then i burst into the internet in search of ideas and recommendations then found a lot of people testifying to the splendid h ackgroup QUADHACKED ‘at’ g m a i l . c o m . that’s their contact email. they work like magic. helped me dispute some late payments firstly . after that they removed hard inquiries at this stage my credit score started increasing . right now i’m on a 759 and i used to score 485. all thanks to the renowned credit repair specialist. for your credit repair services i’ll say you contact them today. Q U A D H A C K E D ‘at’ G M A I L . C O M

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  5. Citibank are theives! I got ripped off $320 from a freudulent listing on ebay and I reported it to cities since they paid paypal. They sent me an email to dispute the charge but I never got it because their lousy app don’t allow you to see messages on smartphones. Just desktop. Because I didn’t see their message, they awarded the the if my money. They SUCK!!!

    Reply

  6. I just had a past due collections appear on my credit report from 5 years ago. I knew nothing about it. I called the credit collections company and paid the debt. I I called the collections company and they said “no” that’s up to credit bureau. I just called Transunion again and they said it was no longer on report. Experian won’t answer their phone so went online, all effort to correct this was proven abortive and i need to do this fast for me to qualify for a house mortgage. Few weeks ago I came across this credit coach who many had recommended how he had helped them with their credit score. I contact him via his gmail (cyberhack005@gmailcom) and asked if he could help me. He answer boldly ‘YES’ and explain to me in details the whole process. I give him a try to my greatest surprise he did an amazing job. My score has boost to maximum and all 3 items were removed.

    Reply

  7. My husband passed away in January 2018.. My husband did everything online. I have no access to his computer.
    I called all of our credit cards and paid them off except Citibank from Costco. I called the customer service department at Citi and was transferred to probate department who told me not to pay. They told me probate department would contact me. Until March, I received a collection letter from Phillips & Cohen. I called immediately to requested the final statement. I was extremely mad at Citibank that I wanted to pay full if they sent me the final statement. I called and wrote a letter to Phillips & Cohen and inform them I wanted to pay the December Statement. January statement is for me to see why the last bill ran up to almost $900 which is not possible. To make this story short, several calls were made to probate department. who told me not to pay because I am not required to pay. Why? I am not the primary card holder. But I want to pay. So on 4/13/18, I went to Costco store and customer service dialed Citibank. The probate clerk told me she would order them from another department and will take 15 to 20 days.. On 4/17/18, I paid the December statement at Citibank branch in NYC. even though they told me not top pay. There must be something they don’t want me to see.
    As of today’s date, I have not received the statement. I tried to create online account but Citibank closed my account so I could not create an online account.
    Everyone wants to avoid payment but I am the opposite —- I want to pay. I even order a credit report which indicates Citibank account was paid and closed. This is only my account. How about my husband’s credit report? Should I order one even he is not longer living.. Should I hire a lawyer?

    Reply

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  8. I got the contact of a credit repairer from a friend whom i contacted and who helped me remove all negative items from my credit and also improved my score to excellent level. i guarantee this credit repairer, he’s the best and I’m recommending him to everyone who needs to fix their credit to contact him for his service, you can contact him on Globaltechnologies46 at gmaildot com

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  9. hi,

    i took a credit card in citibank and they will provide me a personal loan on that card so i took both and invest in my business, now business is fully lose and i remove the business now i am unable to pay that amount.. and citi bank preclose the personal loan and total bill sent to my mail (personal loan close + credit limit + charges)… i am unable to pay and now i am unemployed.. what to do for settlement its just 3 months.

    Reply

  11. hello i have a couple of delinquencies on my credit report from my citicard which i paid off but iTs still reflecting negatively on my report and i know they don’t get deleted until after about 7 years. I’ve tried disputing it as an error once and it didn’t work. SO I’ve been doing my research and found out about goodwill adjustments and called citicard customer service for a contact of some sort to send this letter but been going through a run around. Ive read successful stories from this method i just don’t know HOW or WHO to send this letter to. PLEASE HELP!!!!!

    Reply

    • Hello Valery,

      Email your goodwill request directly to a citicards CEO. You should be able to find these email addresses online. I remember seeing some lists at the myfico forums years ago, but they must be outdated now. Maybe I’m wrong, but I think mailing an actual letter might be a thing of the past. Email should be a lot quicker and effective. And how about social media? Try finding a citicards CEO on Facebook, Twitter or Linkedin and reach them directly through any of those platforms.

      Some years ago, I requested a goodwill adjustment to Citi, sending letters and emails. I tried several times but was not successful. Hopefully you’ll have better luck. Let us know how it went!

      Reply

  12. I had a debt with citibank credit card years ago but I no longer have any information regarding that account. I was sent a letter from Northlands collections a few months ago and responded yet never received a response from then till a few months when they offered me a settlement. I filled out their form and gave them my info so they could deduct payments from my checking account. Northland never took payments out nor did they ever respond. I just received a letter from a different collection agency Capital Management for the entire amount of $4,000. I now realize that the debt is a what is called “Beyond statute.” Should I respond to Capital Management and if so what would I say. Apparently they aren’t suppose to collect once statute is over (california is 4 years) ? thank you.
    Jo

    Reply

    • Hi Jo,

      The debt was probably written off and if it is more than 3-6 years old, it is past the statute of limitations. Do not ever Admit that you own the debt, whoever is trying to collect has to first prove that they own your debt before you ever pay. If not, you will be paying this same debt over and over again,

      1. Check your credit report and send a dispute letter to get this account removed.
      2. Send a debt validation letter immediately any time calls to collect any payment. Google: sample debt validation letter, send by certified mail. If they cannot send you exact details of how you owe them the entire amount starting from $0 and proof of how they own the debt, they have to stop all collection actions!
      3. You can sue them under FDCPA if they still come after you. Attorneys will do this for you for free.

      Good luck

      Reply

    • Hell NO!!! Ask for original contract. If they don’t have it (which they dont) you don’t owe shit! Plus under FCBA they legally can’t put it against you on your credit score! UNDET FCBA THEY HAVE BREACHED THE CONTRACT. THEY CANT PROVIDE YOUR WET INK SIGNATURE. You All need to read your rights! There is no money! There is NO spoon!

      Reply

  13. I have a question, I just received a letter in the mail from collections stating that I owe an amount from Citibank. When I called , the person on the phone stated that I owed A bill from 1995. That was over 10 years ago and clearly I do not know anything about it. I plan to dispute this. Can you help me on what else I may need to do??

    Reply

    • Hi Sharie,

      Unpaid credit debt gets deleted from your reports after 7 years. A debt from 1995 would be 21 years old, no bank or agency would ever collect a debt this old. This, and the fact that you don’t anything about it, tells me that this is most likely a scam. Have you checked any of your credit reports recently? Any collections you might have would be listed there. You can dispute a debt with any of the 3 credit bureaus currently listing a collection, but as I said before, you will not find a debt this old on your reports.

      If you’ve never checked your credit reports, you are entitled to see your 3 credit reports for free once a year here: https://www.annualcreditreport.com

      Reply

  14. I have a past due Home Depot credit card that was closed in 2010. Citibank owns the debt, but is using LTD to get it collected. LTD says that they can’t do anything about the credit report. Citibank says that because it is so old (closed in 2010) that they can’t do anything but issue a letter saying that it has been paid off.

    My questions are:
    1. Is what Citibank says true – that because it has been so long that they can’t do anything about the credit? They said that it is a State of Texas law.
    2. How do I find out if there is a settlement amount or if there is just the full payoff amount?
    3. If there is a settlement amount, how would paying the lower amount affect my credit?
    4. Should I send a letter to Citibank to ask for the credit to be removed?
    5. Will it stay on my report for 7 years after the payoff date or the date that it was closed?
    6. Are there any advantages to paying the debt through Citibank as opposed to paying it through LTD (the collection agency)?
    Any response would be appreciated. Thanks!

    Reply

    • Hi CSTY,

      1. Yes, your debt was charged-off by Citibank. Debts are charged-off after 6 months of non-payment.
      2. Once a debt is charged-off by a bank, they sell it to a collection agency, usually for pennies on the dollar. The collection agency then tries to collect from you, hoping that you’ll pay the full amount. This is how they make money. You can negotiate a payment amount, because the collection agency now owns your debt and paid much less than what you originally owed.
      3. You have to negotiate so that they report the settlement as paid in full, even if you end up paying less than what you originally owed.
      4. At this point Citibank will not remove your collection. You can try sending what they call a goodwill letter after you pay to see if they’ll remove it, but Citi is known for not doing this sort of thing.
      5. It will stay on your report for 7 years, after the delinquency date. The delinquency date is the last month you paid your credit card.
      6. After 5 years, Citibank no longer owns your debt. They have already reported it as a charge-off and the debt belongs to a collection agency, which reports the debt as unpaid to the credit bureaus with the hope that some day you will pay them. If they can’t collect from you, your debt will most likely be sold to another collection agency. Make sure you get a current copy of your credit report and check to see who owns your debt.

      Having said all this, your collection is 5 years old, unless you are applying for a mortgage soon, or need to have a clean report for some other reason, you might also consider waiting two more years for the collection to be dropped from your credit report. Paying your debt at this moment will not improve your score. It will improve your chances of getting a better deal at a mortgage if somebody is looking at your credit history, but it will not improve your score.

      Hope this helps.

      Reply

  15. 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.

    Reply

    • 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.

      Reply

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

    Reply

  17. 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 http://www.annualcreditreport.com 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
    JJ

    Reply

    • 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.

      Reply

  18. 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.

    Reply

  19. 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?

    Reply

  20. 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?

    Reply

  21. 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

    Reply

  22. 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. 🙂

    Reply

  23. 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!
    Question:
    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.

    Reply

    • 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: http://www.consumerfinance.gov/askcfpb/1157/can-creditor-garnish-my-social-security-benefits-pay-debt.html

      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.)

      Reply

  25. 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.

    Reply

  26. 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.

    Reply

  27. 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.

    Reply

  28. 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?

    Reply

  30. 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.

    Reply

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