Financial Team

We’ve been doing blog posts on how willing the banks were to settle credit card accounts for less than owed. Apparently this practice is coming to an end.

Why? The financial situatuion for Bank of America is definitely changing – they are now so flush with cash that they are repaying the money they received in the “bailout” (a.k.a.) the TARP program.

I was alerted to potential change in debt settlement policies with this email:

Well I finally got up my nerve and talked to the collections dept at B of A. They said the only thing they can offer me is a 5% over 5 years at 480/month payment. They said they are not making any settlements. I asked how long this policy has been in effect and they said for the last two or so months. This didn’t sound so good.

I asked if this was in part due to my debt not being very long past due and he said no. they just weren’t doing any settlements period. My one account for 12,000 is two months past due and my other account for 12,000 is still current, and I wont be paying this month. Does this make sense to you? I thought there were debt settlement companies who are still negotiating with B of A?

I agree, this must be very discouraging, but to the best of my knowledge, Chase and Citibank are still offering settlements. So what do you do if you are struggling with a large Bank of America bill and want to settle?

• If you’re not happy with the first deal you are offered, hang up and call customer service back. You will definitely get a different rep through their automated phone banks and this one may be more willing to work with you.
• See if you can sweeten the deal with an “all cash” option – for 30 to 50% of the current balance. Even if you don’t have the cash yourself, sometimes you can borrow from family and friends if they are willing to help you put this debt behind you.
• You may have to wait until you are 4 months behind in your payments before Bank of America will talk to you and offer any discounts in rates or reductions in principal, as suggested by this online discussion.

Here is an online discussion that shows how the willingness to negotiate has degraded from Feb 2009 to now.

I’d really like to hear about your experiences trying to settle credit card debt with Bank of America. Please share any details!

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Tags: Card, Credit Card, Settle Credit, Settle Credit Card