Can we use Credit Management? Encore RMI
Ok here's the background. My husband has a credit card with Bank of America that has a balance of roughly $55,000.00. We are probably around 6 months behind because of medical bills and just life in general. I admit that I have not done a good job of keeping up with the bills. We both admit that there is the debt and that we are in the wrong here. However...
My husband has received 4 or 5 calls a day for the past few days at both his work and cell number. He looked up the number and it came up as "Encore RMI". They then called MY cell phone this evening. When I called them back, they explained that they were attempting to collect a debt for Bank of America. They said that we had the option of settling for $33,000.00 on the nose (about $22,000.00 less than the current balance. It was either that or we would have to be on a payment plan of around $2,000.00 a month. I said that there was no way we could do that. They asked what we could do, I said about $600 a month. They said OK let me see what we can do. They put me on hold for at least 6 or 7 minutes. When the representative came back she said that they couldn't do $600 a month because it would take around 9 years to pay back and that there was no way that Bank of America would agree to that. She then proceeded to tell me that we should try to see if a family member would be able to "help out" or cosign a loan from our bank. I said that we weren't really comfortable with that but that I would talk to our family members. She gave us 48 hours to contact her with an answer. Neither of us are comfortable with that possibility because both of my parents are retired and his are divorced so no one has that kind of money lying around.
I then contacted "Family Credit Management", whom I spoke to in September just to get an idea of what they do. She said that they never suggest settling because we would then need to fill out a 1099 for taxes and that we would still have a high monthly payment for the loan, as well as the fact that settling would be a bad mark on our credit. Keep in mind, neither time that I have talked with this Family Credit Management have they suggested or tried to get me to enroll in their program. They have simply given advice and even suggested that we first try to speak with the credit card company ourselves. So they don't seem to be on commission or anything, I was the one that asked about the program. I gave her our information and she said that we would be able to pay back that plus another credit card (which doesn't happen to be behind at the moment) through their plan. By doing this, she informed me that we would actually be paying the credit cards in full, it would just be negotiated through them for a lower monthly payment for a slightly longer time than what is typical. By no means would we be "getting out of debt" for less... which IS what the settlement through Encore RMI would be. She was very clear that there is a $25 one time enrollment fee and a monthly $24 administration fee that would be added into our monthly payment. I told her that I would speak with my husband and get back to her. We spoke, got back to her, and agreed that she would send the paperwork to me immediately. I would still take about 5 to 7 days to process everything and start the program. I asked if I should call Encore back to let them know since they were only giving me 48 hours. She said that if I felt more comfortable doing that to go ahead. At this point, however, we weren't sure if the Bank of America account still belonged to BofA or to Encore now.
I called Encore, asked for the same woman I spoke to before. She was not available and the gentleman asked if he could take a message. I said my name and why I was calling. He immediately launched into "the problem". Basically he says that it is too late to do that and that. I pointed out that Bank of America would probably rather get all of their money back than a settlement, or worse, we go into bankruptcy. He said that they won't negotiate. I said that I would ask them directly and he tried to convince me that they would tell me the same thing that he did. This went back and forth for a while, but it ended that he said that after 48 hours it would go into litigation. I said that I would speak with Bank of America and if they told me the same thing that I would contact them again.
When I called the Credit Management company again, she said that they most likely bought the account from Bank of America or solicited them to take control of the account so that they (Encore) could make money. Meanwhile, my husband was on hold trying to get ahold of a Bank of America agent. When he finally did, they pointed out that the account was "released" (whatever that means), on December 31st, 2008. They also told us that we could speak with an agent in their recovery department tomorrow when they open to get more info as to whether we can still do payments without having to go through Encore. One of the odd things is that I'm looking at a statement from Bank of America that gives us until January 6, 2009 to make a regular payment. If they were releasing or selling it to a collection agency, why would our statement say January 6th? Also, the original Encore agent said that they sent out a letter to us recently and admitted that it probably looked like junk mail (I think this is so that we ignore it and they can strong arm us). Of course I probably threw it away, I always open it, but if it looked like a scam or a way of getting out of our debt, I probably thought it was junk. Well in the end, our Credit Manager said that we still could go through with the program and that I should just fill out the paperwork and get it to her as soon as I could. She also reminded me that these people (collections agents) do use tactics to get us worked up and scared into doing something that isn't absolutely necessary.
I am going to try and talk with Bank of America tomorrow and just be nice and honest. I will bring up the 6 day difference of our statement due date and when they released our information to Encore. I guess my question is, has anyone ever dealt with Encore? Will we still be able to work with Bank of America, or when it is turned over to Encore, is it done? I'm so scared that we are going to be in DEEP trouble, which I don't want to put our daughter through. Even if we could pay the settlement, how do we know that it will truly mean that we are debt free from Bank of America? And advice, ideas, or suggestions as to what to do from here? Sorry this is so long, but I REALLY appreciate your advice! Thanks!