[Piccsweety]

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!

[Lowtax4eva]

I see this is a few days old... but if a collection agency has been handed the file therefore Bank of America is no longer involved, they sold the debt to a collection agency for a small percentage of the money you owe.

A collection agency must accept whatever payments you make to them and are just trying to make you agree to the highest monthly payment possible.

Pay them an amount you can afford without fail every month but yes you can consult with a debt management company,they may be able to have the balance reduced. But keep in mind you now owe the ebt to the collection agency, who I am willing to bet paid 5500 to get this file passed to them and will probably settle for 10,000 if your debt management people play hardball with them

[Lowtax4eva]

I see this is a few days old... but if a collection agency has been hande the file Bank of America is no longer involved, they sold the debt to a collection agency for a small percentage of the money you owe.

A collection agency must accept whatever payments you make to them and are just trying to make you agree to the highest monthly payment possible.

Pay them an amount you can afford without fail every month but yes you can consult with a debt management company,they may be able to have the balance reduced. But keep in mind you now owe the ebt to the collection agency, who I am willing to bet paid 5500 to get this file passed to them and will probably settle for 10,000 if your debt management people play hardball with them

[stevetcg]

The answer was not accurate. Just because there is a collection agency involved does not mean that the bank "sold the debt". It is possible that they did, but not guaranteed. Some companies use outside collection agencies to reclaim their assets.

A collection agency does not have to accept anything they don't want. If you make a payment they are required to apply it towards the money owed, but that does not prevent them from pursuing the debtor for the full amount in whatever means they see fit, provided it is legal.

[Piccsweety]

Thanks it's solved.

[Lowtax4eva]

Glad to hear it all got resolved

To clarify the original creditor can choose to deal with you directly at this point but in general they are no longer involved, can you advise how this was resolved

[stevetcg]

Its moot, but I am still going to have to disagree with you. The debt is still theirs. American Express, for instance, uses outside collections. They don't sell their debt though. The checks they collect are still made out to American Express.

They might stop dealing directly with the debtor but that does not mean that they sold the debt.

[Fr_Chuck]

I would like to know how it was "solved"

1. collect agencies lie, if you reached an agreement wth them and it is not in writing, expect them to go back on the deal and they are merely saying anything to get some money ( they work on commission of collection normally)

A credit management company may or may not have arrangements with a credit card company, so unless their promises are in writing, if you read here you will find many times there are problems also

[girlonstage22]

Piccsweety- did you use Family Credit Management? We are in the same situation except we are dealing with multiple cards and FCM says they can help. Please let me know if you used them. I am lost!

[chriztina1326]

I definitely agree w/ stevetcg, a lot of you are giving false info. I work for Encore rmi and I can say that the company I work for who pays me basic salary of $6000 a month plus bonuses is LEGITIMATE. Try visiting the site.

[chriztina1326]

Piccsweety- did you use Family Credit Management? We are in the same situation except we are dealing with multiple cards and FCM says they can help. Please let me know if you used them. I am lost!

I'd also like to know how it was solved. Just some clarifications:

1. Collection agencies are companies hired by a credit company to collect for them. That means the creditor is paying an agency to call the cardholders and work with them in solving the problem (delinquent debt).
--- no need for cardholders to hire credit managements to work w/ the creditor, because if they do, then they'll have to pay extra because not all their payment go directly to their creditors.
--- if you still want to hire credit consolidators, just make sure that they are legitimate (most are not). Try asking for other's opinions and experiences.

2. Collection agencies are authorized to call the debtors and offer payment plans that would allow them to pay the smallest amount possible to stop the account from going further behind (that means rolling over to another stage of delinquency which is negative, since they are being reported to the credit bureau). Every acct that they save benefits the creditor ( the bank because they get their money back), the cardholder (because they prevent the account from getting another NEGATIVE note), and the collections agency (because that's how they get credits, reach quotas, and earn bonuses).
--- Credit consolidators will take longer steps. They would have to send proposals to the creditors (which are most often rejected because they are unacceptable or way below the creditor's requirements). Most often, they communicate only in writing and that takes longer time (7-10 days mail). That makes the account incur more charges and delinquency. Also, the account is considered as being IGNORED because of NO PAYMENTS even just minimums.
--- Credit consolidators may be helpful for you but don't trust them too much, it is still better for you to track your accounts and try checking on them w/ your creditors. Your creditors are the ones reporting your accounts to the credit bureau not your credit consolidators. Paying your consolidators doesn't mean you're taking care of the acct. It will still depend on how good your consolidators are and how fast they work. Some of them will also tell you to stop talking to your creditors while you make payments with them. Think about it, what are they so afraid of?

3. As what I've said, the main Goal of collections is to stop the account from rolling over into another stage of delinquency by offering the cardholders all possible payment options that need no proposals. If the acct is already in the late stage of delinquency or 6-7 months behind, it'll be more difficult because the account is in danger of CHARGING OFF. That means, if the cardholder fails to pay an amount that would satisfy a minimum due on a specific date, the acct will roll over to another stage of delinquency and that is the time for charge off review. If the creditor sees that the account has been IGNORED, w/ a lot of NEGATIVE NOTES ( EX. Rude cardholders, hang ups, etc.) they can report the account as a BAD DEBT/UNCOLLECTED DEBT which would affect your credit badly because it will reflect to your name as a BAD DEBTOR. It will stay there for years and of course, it will serve as reference for future creditors.
---- If you have accounts on the late stage, it is better to avail of SETTLEMENTS, it won't be as good as BALANCE IN FULL but definitely not as bad as CHARGED OFF. Your credit has been hurt anyway, why not take advantage of a settlement that can give you as much as 75% discount?

4. COLLECTION CALLS will not stop unless:
--- you've sent a formal request of ceasing calls.
--- your consolidators have sent POWER OF ATTY. Or request for cease and desist of calls (signed by cardholders).
--- the acct is current or up to date
--- or the best way is to set up for arrangements that the collection agency can offer you. ( set up for post dated checks over the phone)

5. It's still best if you can take care of your account by yourself, try calling your creditors. Also try listening or talking to the collections people. Just remember that the debt is your problem, not theirs. They can offer plans that might suit your financial situation like Hardship plans (depending if your account qualifies). There's no harm in talking to them and working things out. Don't be hysterical when talking to them, because that won't help. After calling everyone and asking for the best payment plans they can offer, SIT DOWN and think about it. Have someone who can help you think clearly (eg. Husband, parents etc.) beside you and help you in making decisions.

----------------------------Hope that would help------------------------

Still wish to know what happened or how the problem was solved.

[nunyabiznz]

Free advice is usually worth less than you paid for it.