Wells Fargo is one of the largest banks in the United States. It offers a variety of financial services, including traditional banking, investment advisory, credit cards, and loans. As a result of the California Gold Rush in 1852, a growing population needed banking services as well as express mail services, which led to the establishment of the company.
There has been no doubt that Wells Fargo has grown exponentially since its inception. Mergers and acquisitions of other financial services companies have allowed it to expand its reach nationwide. The company has branches in nearly every state except for a few standouts such as Michigan and Ohio.
Many of Wells Fargo’s customers have credit cards, personal loans, or mortgages with the company. However, when people are facing financial hardships, they may find that they are unable to make their minimum payments on their loans. That’s when the option to settle your debt comes into play.
Take Advantage Of Wells Fargo’s Inter8est Rate Savings
You can expect your interest rate on your Wells Fargo credit card or personal loan to be determined primarily by your credit score when you first take on the obligation. If you have fair or poor credit, you are likely to have an interest rate that is quite high.
There may be some people with good credit who received a low introductory rate on their loan, but who experienced higher interest once the introductory period ended. Whatever your situation may be, Wells Fargo could charge you a fair amount of interest on your outstanding balance after the initial period is over.
As part of your efforts to reduce the amount of interest you pay to Wells Fargo and to reduce the value of your obligation, you will need to start paying more than the minimum payment each month.
See if you can redirect some of your spendings to your credit card debt. You’ll reduce your outstanding balance if you can double or triple your monthly payments to Wells Fargo.
Wells Fargo will also charge you less interest since more of your money will go toward your balance.
Is It A Good Idea To Consolidate My Debt With Wells Fargo?
Consolidating debt can reduce interest costs and repayment time, but you’ll need to think carefully about your financial situation.
Debt consolidation can be done with two methods: a dedicated debt consolidation loan or a balance transfer credit card with 0% interest.
It’s likely that debt consolidation won’t work if your credit is bad. Both methods require a decent credit score of at least 650.
If you get a debt consolidation loan, you’ll be able to pay off all your creditors, including Wells Fargo, at once. Once the lender transfers the money to your creditors, your balance will be zero. But you’ll still have to make a monthly payment until you’ve repaid the loan.
Wells Fargo balance transfer credit cards are great for people with high-interest loans. Especially when you pay off the balance within the 0% interest window, you’ll save a bunch of money on interest and fees. Use the card to pay off your debt, then make monthly payments to your new lender.
Three Steps To Settle Wells Fargo Debt
In the event you fall behind on your payments, Wells Fargo may sue you to get a judgment, which lets them garnish your wages or freeze your bank account. If you can, try to settle your debt with the company before your court date, which will stop any further legal action.
Here’s how to settle a Wells Fargo debt before your court date:
- You need to respond to the lawsuit.
- Make a settlement offer.
- Make sure you get a written settlement agreement.
1. Answer The Lawsuit
You should respond to Wells Fargo’s complaint with an answer. You should address each of Wells Fargo’s accusations against you while remaining truthful and respectful of your legal rights.
You can object in the Answer if you think the statute of limitations has expired for Wells Fargo to collect. Other possible defenses include identity theft or incorrect jurisdiction.
If you don’t settle the debt before your court date, filing an Answer will save you from getting defaulted. If Wells Fargo refuses to settle, you can still go to court to defend your rights if you can’t reach an agreement. It just buys you time to work out a settlement agreement.
2. Make A Settlement Offer
Consider starting the negotiation with a fair offer (consider a minimum offer of 60%) since Wells Fargo may be in an excellent position to win its case.
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Do some research on your type of debt and Wells Fargo’s settlement history. Consider these questions:
- Is the debt a book account or a promissory note?
- Do you have a good defense?
- Is there an offset?
- Does the debt have interest?
- Does the debt have a fee-shifting provision? A fee-shifting provision requires the borrower to pay the collection costs.
- What was the last payment?
- Who owns the debt, the original creditor or someone else?
- Are the loans federal, state, or private?
- Has the debt been secured?
- Can the debt be discharged in bankruptcy?
Once you have determined how much you can afford and how much they are likely to accept, send an offer. Your initial offer may sound like this:
“I see you’re suing me for [$___] for [case number]. I don’t have that kind of money and I don’t agree with the amount. But I do have [$___] that I can pay within 30 days to settle the debt in full. Let me know if you accept.”
Wait for Wells Fargo to respond. The bank may need a few days to consider your agreement and decide whether to counter it.
If Wells Fargo counteroffers with an amount you cannot afford, explain why. Sometimes, Wells Fargo will be more willing to accept your offer if it understands your financial situation.
3. Make Sure The Agreement Is In Writing
When consumers settle a debt with Wells Fargo, the bank usually drafts a debt settlement agreement to make sure they hold up their end of the bargain.
Let’s look at an example of how to settle a debt.
A simple example would be Henry being sued by Wells Fargo after falling behind on his credit card payments for several months. He responds to the lawsuit, giving himself time to negotiate a debt settlement. After analyzing his finances and doing some research into debt settlement with Wells Fargo, Henry determines that he can afford to pay off up to 70% of the debt at the moment. In the beginning, he sends his initial offer, starting at 40%. As a result of a few rounds of negotiations, Henry is able to reach an agreement with Wells Fargo at 65% of the debt. This saves Henry money, as well as puts him in a better financial position for the future.
In spite of Wells Fargo’s shady reputation, you can still work out a debt settlement with them and get back on your feet. If you’ve been sued by Wells Fargo for credit card debt, you can settle the debt before going to court. Just reply to the lawsuit, send a settlement offer, and get it in writing.