settlement offer from citi

[Amadan]

We are only 2 months behind on the citi card and they just sent us a settlement offer today! Its roughy 40% of the account balance. If I understand it right, and I have read it about 5 times now, we can even set up an interest free payment plan.

We have a total of 7 cards, and the prelimenary numbers have us at 100% payback on a 13. So what are the chances of the other cards following suit? I mean, if we can set up our own repayment plan it might mean less money in the end and a faster way out of debt.

Or am I fooling myself?

They are even kind enough to give us about 3 weeks to think about it...

[DebtHater]

Should you choose to settle keep in mind that you will be responsible for taxes on the amount that is written off. Example, if your balance is $10,000 and you settle for 40% ($4,000) you will have to pay taxes on the remaining $6,000.

Additionally, should you settle, make sure you get the agreement in writing and do not give them electronic access to your accounts. No, credit card or check over the phone.

[andysmom]

Hi Amadan!
Did you contact Citi or did they send / call you with an offer? We're like you & waiting to find out what our chapter 13 plan would be.
Citi is our 2 largeset cards and one small card with them. We were in a "hardship" plan with them where they were taking monthly payments out of our account but we just stopped those. The last payment we made to them was Feb. 2010. This month's payment on 1 is due next week & the other due the end of month (which on the advice of our atty. we are not making) Have cancelled all auto withdrawls.
Wondering if we'll get offers to settle too? Only problem is we have so much debt spread out over so many cards, don't know if we'd be able to handle it even if they do make offers. Our 1 citi card is about $17,000 the other is about $14,500 (who know with late fees & whatever else they tack on) and one with about $2300.
I guess the problem then would be the taxes and hoping for settlement from some of the other creditors. i'm really really in panic mode right now. our phone is ringing off the hook constantly & it hasn't even been but a few weeks....

[Amadan]

Hi andysmom,
We didnt contact them and have basically turned the ringer off at this point altogether. We have close to half our debt on 3 citi accounts. This one is the largest amount and they offered to settle 17k for about 6k. I havent called them yet, but it says on the paperwork we can work out a "payment plan" that would be interest and penalty free. If all the other cc's follwed suite that would make it more appealing. If we have to pay 100% in a chapter 13 it would be somthing like 1900/mo. if I had to pay back 40% and could do it on terms of 24months I would then feel more compelled to take on an extra job and live like a pauper for 2 years and get it over with versus my personal fear that I will be spending five years in debtors prison under house arrest. yes, i know i am probably making ch13 out to be worse than it is, but it quite frankly has me worried sick.
Has anybody here done this? What kind of repayment timeline would you have on a settlement offer? Would it even be realistic to make it 2 years?

[andysmom]

amadan- you sound exactly like me! we are in exactly the same situation & it scares the life out of me knowing that you'll be scrutinized for 5 years - and i can't sleep at all. I'm a complete ball of nerves. If I knew I could get them to settle along with some of the other larger ones & then work on paying off the others as best I could I might be inclined to do that as well. It's so hard to make the decision & lately it seems my entire life revolves around this and I'm missing out on the things that really do matter - like my family & my little boy. He wants to play all the time & all I want to do is sit & cry (although i don't in front of him - it's all that's on my mind).
I really wish we had seen this coming & made chages long ago but what's done is done and now it's trying to find a way out of this huge black hole.

[flyinbroke]

I am 2 months behind with them and all I get is voicemails ranging from B**chy Beverly to some sugary voiced woman with an almost exaggerated Southern accent sweetly telling me they value my business (yep, the card is expired and dead because I opted out of your doubling the interest rate...yep, I feel valued.) Got one letter with potential scenarios "if I qualify."

I have not talked to anyone yet. Maybe it is time to see "what I qualify for"...

[andysmom]

flyinbroke:
Citi when I called trying to save ourselves from the almost inevitable cahpter 13, I called the hardship phone number (not the one on the back of your card - when we called that they said there was no such dept & couldn't help- call CCCS)- I found a hardship# online, called that & they enrolled one card in a 5 year "balance liquation program" w/ 0% interest & payments nearly $300 a month which had to be auto deducted from our checking account. Our 2nd card wasn't eligible- they "didn't know why"- that's what the computer said- they actually told me not to pay for a month & call back. At 22 days late it qualified but at 9.9% interest.
Chase took about 20 minutes while their hardship dept took down all kinds of financial info- then enrolled us (all of our cards) in a balance liquation program for 5 years at 12.9%- payments for all of those added up to about $625/mo.
Add that to the many more cards we have & the fact that we just make over median income (by just a few hundred dollars a year) and there was no way we could do it. The only way we did do it was living off the cc's to pay our household bills & using cas to pay the cc's. After final realization that we have no other way out, we consulted an atty about 1 1/2 wks ago who suggested that we do file ; unfortunately it looks like we're going to be 13 waiting to hear the approx monthly payment would be....

[flyinbroke]

Yeah my first lawyer quoted me a 2400 a month payment, leaving me with about 700 to live off of once rent was paid. Of course my insurance skyrocketed, so that will eat about 20 percent of what is left there. This was about a 90 percent payoff plan.

Lawyer #2 quoted a ballpark of 800-900 a month, while I pay my car on my own (it is not upside down and a year from payoff.) Once that is done, it gets slapped onto my payment.

One way or another, I am not doing bad (not great either..if I was great I could pay all of the accounts and have $$$ left to live on.) However, since I am behind on only 5, I can likely wait a spell for the unholy insurance rates to stick, the tax exemption to kick in, and all the other cuts in income I have coming up the pike.