I Settled My Debt But Bank of America Says I Still Owe It, In Full. – Chauntel


“Dear Steve,

Hi, I had a BOA credit card that I couldn’t continue to may payment to for months, so it went into default and then collections with ICSYSTEM. After a couple of months I was abled to start making payments back so I called BOA and was told my account was indeed sold to ICSYSTEM. ICSYSTEM rep told me that they would settle my outstanding account for 50%, if I made three monthly payments of equal value on the same day of each of the three months, then my debt would be wiped off and considered settled.

So I did make the three payments as they agreed, with last payment made August 22nd, 2009. I received a letter saying that my debt is settled, but a week after receiving that letter, I received another letter but from BOA saying that I was accepted into a debt management program effective september 4th, 2009, called the “special repayment program”, in regards to the same account which was placed with ICSYSTEM. What does this mean considering that my debt was clear and settled? What could be BOA reasons for sending me this type of letter?


Dear Chauntel,

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I strongly suspect this is nothing more than a communication screw-up from Bank of America but it does highlight an even greater problem with debt settlement.

Historically creditors will make claims that a settled debt was not settled. This is why it is so important to keep the settlement letters and proof of payment in a safe place with your other important papers. And you will need to keep these for decades.

It is certainly not uncommon for a creditor to claim, rightly or wrongly, that a debt was never settled and that now the burden is on you to prove it. Many people don’t keep track of this proof or think that what I am saying surely couldn’t happen. It does, and not occasionally, it happens all the time.

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Armed with your proof that the debt was settled you should immediately do two things. First, you should pick up the phone and call Bank of America and seek some clarification if your account is still showing as open on their system. If it is, you will need to provide them with proof that it was settled. Second, you should order a copy of your 3 in 1 consolidated credit report and verify how this account is being reported. If it is not showing as closed and settled, well you’ll have a bit more work to do to clear that up as well by disputing it with the individual credit bureaus. But remember, the amount of debt forgiven in a debt settlement will appear as a bad credit item on your credit report and that will remain.

Please update me on your progress by

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

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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.
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