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: