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Ask John A. Flynn, Esq. Your Own Question
John A. Flynn, Esq.
John A. Flynn, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 202
Experience:  14 Years Experience in Bankruptcy - Mid-South Super Lawyer
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Im working on settling credit card debt. Citicards said to

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I'm working on settling credit card debt. Citicards said to deal with citicards NCO financials. How can I tell if the debt is sold or NCO is citicards agent? I want to settle and I can get a loan from my 401K. I'm almost done, and got 2 cr card companies to accept a settlement. I want to get this done this month. Please advise me on how to proceed.

The bank that I have my 2nd mortgage has an unsecured line I'm also tryng to settle (Key bank) I got into trouble when I deposited a large check into a checking acct to pay a settlement and my regular bank put a hold on until it cleared. So my 2nd mort payment was not paid. I sent it the next day, but it's late now. Still not posted and I really want to settle this one this week, since Key sent me a letter saying I have 10 days to pay in full. Should I go make a payment on this usecured line today? There is a branch near me and I can stop in and make a cash payment.
well, you could ask NCO if they own the paper or if they are just repping Citi. They should tell you. In either event, a settlement with NCO, whether they are a first party or third party will bind Citi if they are truly their agent, and since you say Citi told you to deal with NCO, I would say you're safe there making a deal with NCO assuming you can agree to settlement terms.

Are you saying that Key Bank has BOTH a 2nd mortgage AND an unsecured LOC with you and you are trying to settle the unsecured LOC with them? If so, I would be reluctant to make a regular payment on the LOC and just insist on a lump sum settlement if that is your goal. Since they are unsecured, the only thing they can do is file suit against you at which point you could either work a deal or possibly file bankruptcy.

Be aware, however, that you are incurring income tax debt with the IRS every time settle one of these accounts. The creditors are going to send 1099s for canceled debt to the IRS. You may want to talk to a bankruptcy attorney in your area about possibly filing bankruptcy which will allow you to discharge these debts AND avoid incurring new tax liability.

Customer: replied 3 years ago.
I spoke with a bankruptcy atty in december when I was looking at what to do. It's $3000 to file chapt 13 for me and I have a job. So I'm on the hook for the money and a bankrupty on my credit. I'm looking at $26,000 to settle. I have other low balance accts that I want to pay off normally in addition to 2 yrs of paying my daughter's Sallie Mae. I figure 50% of 26,000 would add 13,000 to my income. I can take a low interest loan from my 403K, without needing a credit hit. Then if I can get my credit up by the end of the year, I'll try to do a HARP loan on the house and write off the points to offset the extra income. After 2 yrs of on time payments to Sallie Mae, they will release the cosigner. Then I'll be in better shape to retire within 8 yrs from now.

Key rejected my 3rd offer for 40% and they want me to go to a program that is not great. They sent me a notice to pay in full in 10 days or else. I thought I could stall by paying $173 and giving an extra 30 days to negotiate. Also they hang up when they know I'm recording the phone calls.
Well, it sounds like you have given it a great deal of thought and planning. I suppose paying that small payment to try and buy more time might not be a bad idea. The only concern I have is that in my experience, unless you've gotten significantly behind with some of these unsecured debts, they don't agree to decent settlements. 40% should be agreeable to them but only if they think you might just default entirely. If you weren't apparently concerned about your credit, the best settlement will generally come after getting 6 months or more behind on the account. If you aren't willing to do that, you might just need to up your offer to them. Good luck.
Customer: replied 3 years ago.
Yes, I don't want my credit to go too low. Sallie Mae really hit hard. So I might as well settle while I'm low already and bring it back up by paying off the smaller accts. This would show as a one time hardship event without bankrupcy. I think I'm better off with that on my record than a bankrupcy. Espcially when Chapt 13 is just a stall and I have to pay back 100%. Opinion?
You don't usually have to pay 100% in chapter 13. It depends on various factors but most of my clients pay less than 10%.
Customer: replied 3 years ago.
Hmm. Guess I was right not hiring the firm I talked to in cleveland. Raushe & assoc. They said I'd have to pay 100% and sallie mae is the biggest liability.
Well, it's possible you'd have to pay 100%, I don't have enough information to say for certain either way, just that most cases do not.
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