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PDtax
PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 4526
Experience:  35 years tax experience, including four years at a Big 4 firm.
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I defaulted on credit debt for Citibank and now there is a

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I defaulted on credit debt for Citibank and now there is a lien on my house. Some lawyers bought out the debt $11K. I'm trying to do a cash out for $14K. I owe $118K on the house and it just appraised for $160. Is it up to me to contact these lawyers and negotiate? If so, what's the best way?

PDtax :

Hi from just answer.

Customer:

Hi

PDtax :

Hi yourself. I am going to ask a few questions about the debt, then point out issues you can investigate.

Customer:

ok

PDtax :

When was the debt takenout?

Customer:

the credit card debt accumulated over years

Customer:

The lawyers bought the debt about 2 years ago

PDtax :

ok, so the debt went bad in 2006?

Customer:

they offered to settle for $9K about a year ago but I declined

Customer:

no 2010

PDtax :

Perfect. That's where I would start.

Customer:

what do you mean

PDtax :

If the debt is recent, and they properly got a judgment against you, and you want to settle, then if you want to settle the debt, try this:

PDtax :

contact the debt holders, and offer to accept their terms. How much was the debt, by the way?

Customer:

originally $11K. They offered to settle at $9K a year ago. I declined. I haven't heard from them since.

Customer:

I can't sell my home now because of this lien

PDtax :

got it. call 'em, and offer to buy the debt for 9000 or less if you feel like asking for a lower price.

Customer:

that's the only way?

Customer:

i'm not good at negotiating over the phone. what do I say?

Customer:

also, it went to court and the judgement was in their favor. Do they even have to negotiate with me? Can't they say "pay us the full amount or never sell your home?"

PDtax :

They don't have to, but they want to. They may have paid a small part of the 11000 they seek, and make money only when they are paid.

PDtax :

Was it a default judgment, or did you appear in court?

Customer:

i was just told by my mortgage guy about the judgement. I had no idea. I wasn't told a price.

Customer:

I never appeared in court.

Customer:

can i fax them instead of calling?

Customer:

if I call, what do you recommend I say? I was going to offer $4,500 and tell them I'm getting a $5K income tax refund.

PDtax :

I think the best thing is engaging a consumer law attorney to represent you. It's smart to know you can't negotiate, and the attorney can look at the debt and advise you.

Customer:

how much will it cost me?

Customer:

my company has an EAP. Should I look there for help?

PDtax :

An EAP mght be the best place for the legal help you need.

Customer:

do you think I should try faxing them an offer to settle?

PDtax :

Your self-assessment that you can't negotiate over the phone told me you needed a pro. If you represent yourself, they will certainly call you.

PDtax :

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