Author Topic: Citi Card Dilemma, Early Stages  (Read 208 times)

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airplanegod

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Citi Card Dilemma, Early Stages
« on: August 09, 2017 03:40:41 AM »
Hello all,

First off I am not adding these facts to gain sympathy or put it on someone else, I am 110% responsible for this mess I created but came on here looking for advise on what to do next.

Last July while I was on an internship I got my first credit card, a Citi AAdvantage Credit Card. Got it with a pretty high interest rate (due to my age and the fact I had basically no previous credit) but was fine with it since I figured I would just pay the balance off. Well, things started to get out of hand and I charged things here and there and it quickly added up. I have a $2,500 credit limit, and I came within that range. I was able to keep up with the minimum payments but in January I left the internship and went back to school, where I currently only work one part-time minimum wage job (although I am looking for a second). As of May, the minimum payments became too much as my income couldn't keep up with that while I am paying for rent, utilities, food, gas, miscellaneous school expenses etc. My parents can't help me as they declared bankruptcy a couple of years ago and struggle to pay their own expenses/debts.

Since May I have made payments of $20.00, $60.00, and $27.11. Obviously not much but wanted to pay something. As of right now, the late fees and interest keep adding up, and along with July's annual fee of $100 my current minimum balance is $470. I can't pay anywhere close to that amount.

So, do I:
1. Call up Citi and tell them I can't pay more than say $60 a month at the moment?
2. Call up Citi and tell them I can't pay anything/look to see if they lower my minimum due?
3. Just keep paying what I can each month and see what happens to my account?
4. Stop paying, cease contact and see what happens?

kevinmanheim

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Re: Citi Card Dilemma, Early Stages
« Reply #1 on: August 09, 2017 08:35:05 AM »
Anything you say will be used against you. Don't kid yourself into thinking that they will help you if you plead your case.

If you call them to work out a payment plan, the outcome is likely that they will take your partial payments for a while, then turn you over to a collection agency and/or sue for the balance anyway.

There are complex computer algorithms that decide how to handle your account. The employee asks you questions and enters them into the computer. A decision is made on how to maximize the amount they can squeeze from you before suing or selling the account.

Since you are that far behind, they are likely to close your account in the near future. From there, you can expect to have the account charged off and turned over to collections when you are 180 days late on making full payments.

If it were me, I would send them a certified letter that says I am revoking consent to call me. I would get ready for the OC and their collection agents to ignore that request. I would keep a log of calls.

I would also read the arbitration clause in the card contract.


Bruno the JDB Killer

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Re: Citi Card Dilemma, Early Stages
« Reply #2 on: August 09, 2017 01:03:14 PM »
One mistake you are making is those small payments. Every time you make one of those you extend the statute of limitations. Not that it matters yet, but it may in the future. What state is this?

You can try arbitration, but Citi almost never backs down from it. They spent over a million dollars chasing 20K with one of our previous posters.
I am not an attorney. Any information I post is strictly my opinion and should be treated as such.

Clydesmom66

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Re: Citi Card Dilemma, Early Stages
« Reply #3 on: August 09, 2017 04:43:13 PM »
I would also read the arbitration clause in the card contract.

CITI removed arbitration for small claims cases.  You know that.  The OP said the credit limit is $2500.  Even with a maxed out card and fees it would put the balance under $5k which is small claims in most if not all states.  Arbitration will not be an option.
Be VERY careful following advice from the internet! What worked for someone with thousands of posts on a message board may not work for YOU in your state.  Consult a lawyer when ever possible.

Bubbles

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Re: Citi Card Dilemma, Early Stages
« Reply #4 on: August 09, 2017 05:02:42 PM »
One approach would be to stop all transactions (payments and purchases), then just before the account charges off, settle with bank. That timing is usually good for a low settlement.

There is a tax consequence to bear in mind, because the difference between the settlement and forgiven principle is imputed income.

For planning purposes, it is usually 6 months between default and charge-off.


CleaningUp

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Re: Citi Card Dilemma, Early Stages
« Reply #5 on: August 09, 2017 05:44:52 PM »

One mistake you are making is those small payments. Every time you make one of those you extend the statute of limitations. Not that it matters yet, but it may in the future. What state is this?




Not in all astates.  He is in default.  If he does not bring the account current, he doesn't bring the account out of default, he does not change the SOL unless the state he is in allows a payment to to reset.

And if he is in default an never comes out of it, then he doesn't change the DOFD used for calculating how long the account can be reported as a negative to the credit reporting agencies.

 

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