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Bank of America Confuses Me With Their Debt Collection and Settlement Approach. – Mary

“Dear Steve,

It will soon be 6 months that I have stopped making payments to BofA on a $42,000 balance which was mainly used for a balance transfer from different accounts over a year ago. They raised the rate and payments and could not afford it anymore since I haven’t been making money. I hired a lawyer a month ago to work with them on a settlement. He has had a very difficult time getting connected with them. 2 weeks ago, they sent me a letter to settle for $32,000 and my lawyer sent them a counter letter for $10,000 but no answer. Today I received a letter asking for a minimum payment or to call them for a payment arrangement since the account is seriously past due.

I am so confused about 2 contradicting letters. Once to settle and one to pay the minimum balance. I also called them 3 weeks ago and gave them my lawyer’s information so he can handle the calls. Is this a trick? Why is BofA still contacting me and ignoring his calls? I would appreciate your help since I am getting worried now.


Dear Mary,

I’m not surprised by their approach. You’ve got a couple of different departments at Bank of America communicating with you and it’s fractured. Bank of America isn’t the only one to do this. I remember a consumers that once called Capital One to offer $35,000 on a $43,000 balance and they refused. When he got home there was an offer in his mailbox from Capital One to settle it for $15,000. Logic and creditors don’t always go together.

It feels like you are a bit all over the place on this. We need to pick an approach. If you are going to pay for a professional to handle this for you then let them handle it. If you want to do it yourself there are good programs out there that can help you for not a big fee.


I’ll email some of those companies and ask them to come and comment on this question for you and share their wisdom and experience.

Please post your responses and follow-up messages to me on this in the comments section below.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.


  • Hi Mary, 

    My best advice would be to lean towards settling with them on your own. Believe it or not, hiring a third party when the accounts are at the creditor level can actually complicate things. B of A is one of the most flexible companies out there. 

    If I were you, I would call your attorney and let them know that you would prefer to try to communicate with them on your own. Ask them to put your file on hold. 

    Then sit down and breakdown your monthly budget, your income, and the highlights of what happened to you. 

    Then, I would call b of a and explain your hardship. Be prepared to answer some budget related questions, as well. Your job on this call is to show them why they should settle with you. If your budget reflects an inability to pay, they will be more likely to work with you.

    While communicating with them, they will probably try to convince you to dump your attorney and to work with them directly. If or when they do, kind of play into it a little. Explain the reason you hired one was out of fear and your preference to avoid bankruptcy. They’ll probably go on to tell you there is no need to be fearful and they will then probably offer to work with you to substantiate that claim. 

    The $10,000 offer is about right. Offer that amount again and be sure to explain why that is all you have. If they counter offer to a close amount, tell them that you will make some phone calls to find the additional amount. 

    Then come back and give us an update and we’ll go from there.

    • Jared, thank you so much for your advice.  I read it several times in trying to follow the steps.  My total debt to BofA is close to $50K (balance transfers) on 2 accounts.  They offered me $27,227 in settlement.  They have also asked me for medical records (since I was diagnosed with a heart condition) and a hardship letter.  What do I write in this?  How do I word it properly?  I have not made any money in the last year.
      My budget is a lot less than their offer but I’m worried if I don’t take it, I will lose the offer/reduction.  I used to have a CD account with them that I closed down several months ago with a balance of $50,000.  This was a family/sibling fund under my name.  If I don’t settle soon, will they ask me for financials about those funds.  I want to prevent any chances of litigation since the 6 months is coming up soon since I have been late on my payments.  I was told that the “law of diminishing returns”  may start kicking in soon.
      I will need to find more funds to settle but in your opinion, do you think it’s worth finishing as soon as possible?
      I appreciate your help..

      • Hi Mary, 

        No problem at all. You’re doing great. Try not to feel rushed. That may cause you to accept an offer that you really can’t afford. When I have clients that have accounts at the creditor level, our goal is to settle them previous to charge off. What I suggest to them, as I will also suggest to you, is to find out what date the account is scheduled to do so. B of A charges off at 180 days, so you’re very close. 

        The objective is for you to finalize your negotiations with them prior to charge off. Please know, that is b of a’s objective too. However, in the event that you don’t, the way to handle that is to make your normal monthly payment on both accounts. After your payment is made, your account will become 5 months past due instead of 6 and you will buy yourself an additional 30 days. But, don’t make that payment now. Wait till the day before charge off and pay them with a check by phone. As I mentioned earlier, they want to avoid the charge off just as much as you do. So, let it get as close as possible, as they may become more negotiable.

        Mary,I have a couple questions for you… 

        How recent were those balance transfers? 

        How much were the transfers for?   

        Balance transfers can complicate things a little too. When a creditor makes a determination to settle, one of the things they pay close attention to, is the age of the debt. Did they receive minimum payments on the existing balance for years? Or, was the majority of the balance recently created? This is how they think. So, if your balance transfers are fairly recent, this will play into their flexibility.  

        So, they’ve gone from 80% to approximately 55%. Very good job. But, like you said, you really can’t afford that figure. So, lets get to the hardship letter…

        In the hardship letter, you want to describe your situation. Explain what happened to you. Elaborate on your income and medical situation. Explain your inability to afford the monthly payments. Mention what financial resources you have sought in an attempt to get the the most money for the settlement. If you lack additional resources, explain that too. The purpose of the letter is so they can justify your offer. If after reading it, they feel that your offer is the best you can do, they’ll be more inclined to accept it, or to make a counter offer that is more within your reach. 

        The reason they want to see your medical stuff, is so they can validate your claim. So, give them copies of what you feel comfortable sharing. If you’ve had a lot of medical bills, I would definitely include those too. 

        Mary, I hope this information helps you. You’re more than welcome to call me to clarify or bounce things off me, if you need to. 

        As soon as you can, find out when the accounts are scheduled to charge off. 

        Keep us posted and keep your head up. You can do this. 🙂   

        • Mary, if you will be handling this negotiation yourself instead of working through the attorney, I’ll try to offer some tips as well to supplement what Jared has told you. It’s very important to pin down the charge-off timeline, which can often be confusing. You may or may not get a straight answer by calling the bank. The easiest way to figure it out is to go back to your statements and determine the due-date for the *first missed payment*. Then add six months. For example, if you paid on-time through January, and first began to miss payments in February 2012, then charge-off will take place in August (typically at the end of the month). The reason this is important is because you will get the best possible settlement just before the charge-off deadline, vs. negotiating with them during earlier billing cycles. Creditors will always try to make you panic about the charge-off, but it’s actually *their* deadline more so than yours! They want to reduce the loss they are about to face, so it’s an ideal time for negotiating. Just to be clear, after charge-off, good settlements can normally still be negotiated via collection agencies, but the risk of legal action does increase as time goes by. Let’s sort out the charge-off timing before you go any further, ok?

        • Hi Jared,
          BofA’s negotiator will not change the numbers. My balance is at $43,500 now and she wants $23,900 to settle. As of tomorrow, I will be 6 months behind on my payments. The only other option I have is to wait until the 25th to speak to her manager and I’m worried about waiting. I don’t know how much of a difference this is going to make. I am thinking of settling to avoid any complications or lawsuit expenses. Do you think so?

          • Hi Mary,

            I think you should do what makes you most comfortable. An idea you may want to consider is if you accept the settlement today, debate if you want to arrange the settlement to be paid in 2 parts.

            If you do, try to negotiate $1,500 today and $22,400 in 30 days. Naturally, you’ll want to get this in writing before you make any payments. They should be able to get you a letter today if you request it.

            The idea being, if you structure your arrangement like this today, you should avoid charge off (confirm this) and you can still call the manager on the 25th to see if they will go any lower.

            This way, you know you’ll be able to settle for the $23,900 and you will eliminate all risk of that offer going away if you waited to speak with the manager 5 days from now.

            Then, when you speak with the manager, explain that your situation requires additional flexibility and inquire about their willingness to be more flexible.

            If they are, great. If they’re not, you still have your agreement intact and you finalize your settlement.

            Please feel free to reply with any additional questions.

  • Mary, the confusion between the two letters is just the right-hand not talking to the left, as Steve noted in his answer above. The letter about making a minimum payment is just a boilerplate notice BOA’s computer system spit out and mailed to you, simply because the account is close to the 6-month charge-off deadline. The offer letter for $32,000, on the other hand, may have been prompted by your attorney’s settlement attempts, or it could also be another automated letter.

    If you’ve hired an attorney, and the lawyer has sent a Power-of-Attorney on your behalf, then technically BOA is not supposed to speak further with you by telephone. However, you can still expect to receive the automatic timed notices by mail that are part of their collection process, and these can be turned over to the attorney so he’s fully in the loop on what you have received.

    You say in your write-up that the attorney mailed a counter-offer to which the creditor has not responded. FYI, my experience has been that it’s far more effective to negotiate by telephone, and then have the settlement letter drafted after reaching verbal agreement on the figure and payment structure. It’s not totally clear from your description how diligent your attorney has been in calling BOA to negotiate the settlement after making that counter-offer on your behalf. If he just mailed in a counter-offer without following up by phone with them, that is not a very effective negotiation strategy with this particular creditor. If you decide to continue with this attorney’s help, then you need to make sure he is on the phone with the bank until a settlement is reached that you are comfortable with accepting. It’s usually possible to call BOA and reach a live rep, especially for an account this close to charge-off.

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