The idea of not paying back money to any lender is never ideal, but if you do not adhere to your regular payments to the lender, it can become even more challenging. If you owe money to a creditor such as Bank of America, you’ll have to make some decisions. A repayment agreement can be negotiated, the debt can be consolidated, or you can settle your debt with Bank of America.
Individuals can take advantage of a variety of financial services from BofA, including checking and savings accounts, credit cards, and personal loans, as well as mortgage loans. Bank of America itself is renowned for its broad selection of financial services. As the second largest banking association in the United States, after JPMorgan Chase, the organization has international branches in more than 40 countries across the globe.
There are a few options you can choose from if you are facing a debt that is overdue with Bank of America.
Consolidate Your Bank Of America Loans
If you have a few outstanding loans you’d like to pay off, you can consider debt consolidation. Debt relief involves taking out a loan from a unique lender for the sole purpose of paying off your credit cards or other outstanding debts. As an alternative to paying various creditors monthly, you will be making a lump-sum payment to a debt consolidation lender on a monthly basis.
If you do not have an excellent credit score, you will not be able to qualify for a debt consolidation loan with low-interest rates. Nevertheless, if you have a bad credit score, you may still be able to get a consolidation loan, but the savings may not be very significant, and the interest rates will likely be higher.
You may be able to qualify for another type of loan if you don’t meet the requirements for a debt consolidation loan.
Is Bank Of America Able To Offer Me An Alternative Repayment Plan?
Bank of America is able to arrange alternative payment arrangements for your convenience. You’ll need to contact their offices to explain your financial situation, and if they agree to modify the terms of your loan agreement, you might be able to make lower repayments on the debt or reduce the interest rate on your debt.
Do I Need To Continue Paying Bank Of America On A Regular Basis?
The most effective way to get out from under your debt with Bank of America is to pay off what you owe. If you take a moment to look at your monthly budget, determine whether you can make any short-term cuts, and then apply the extra money to your debt, then you will be able to reduce your debt without damaging your credit score.
It may be possible for you to take on a part-time job, or start a side business so that you can build up your savings and put more toward your monthly Bank of America bill. With luck, within a few months or years, you will be able to pay off the entire balance and improve your credit score.
Can You Settle Your Debt With Bank Of America?
Bank of America may be able to work out a settlement arrangement with you if you cannot pay off your entire debt. A settlement involves paying your creditor a certain amount as a single payment or in a series of installments. If you’re not making your payments on time, Bank of America is more likely to accept a settlement. After about five months of non-payment, Bank of America is likely to charge off your account and consider it a loss. Therefore, you will be able to reach out to BofA around this time and they will accept whatever you can afford.
You’ll get a settlement from Bank of America based on how collectible you are as a consumer. If they think taking you to a court or continuing collection efforts will make them more money, you’re considered more collectible. Here’s what makes a consumer collectible in Bank of America’s eyes:
- Own a house.
- Several assets are owned by you.
- Your income is steady.
- Only a few payments are late.
- Outside factors are not causing financial hardship.
There is no doubt that Bank of America knows that taking your case to court would be a costly endeavor, especially if none of the points above are applicable to you. Even if they win a default judgment against you, they might not be able to force you to make any payment to them if you don’t have regular earnings or savings.
So if you have the savings to fall back on, a settlement can prevent your account from ballooning into a lawsuit and save you some cash.
Negotiate A Settlement With Bank Of America Before Your Court Date
The best thing that you can do if you’re being sued by Bank of America is to fight back, win, and settle the debt at any stage of the lawsuit. Keep in mind that one of Bank of America’s main debt collectors, FIA Card Services, may be listed as a defendant in the lawsuit. You can settle your Bank of America account by following a few specific steps listed below. These steps will help you to achieve this goal.
Step 1: File An Answer To The Lawsuit
Firstly, you will need to read the entire complaint that Bank of America has filed against you. Make note of the amount of money they are seeking, and compare the factual information with your records. If there are any discrepancies, you can include them in your response to Bank of America.
No matter how much you intend to settle the matter before your court date, you should still file an Answer to Bank of America’s Complaint. A response should respond directly to each of the items in the Complaint, and if you are unable to reach a settlement with Bank of America, an Answer will prevent the court from granting Bank of America a default judgment against you.
Step 2: Start The Negotiation Process By Offering A Settlement
As a next step, you need to contact Bank of America in order to offer them a settlement.
Do some research on how much Bank of America might be willing to accept, and figure out how much you can afford to pay off. Some debt settlement services claim that Bank of America will probably settle for 30-40% of the debt. As your first offer, you should consider a fair amount. For example, 60% of the total value of the lawsuit might be a good place to start.
Make an initial offer to the opposing attorney, whose name should be listed on the court documents. You can call, send a letter, or even send an email. To make an initial offer, you can use the following wording:
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“I see you’re suing me for [$500] for [case number]. I don’t have that kind of money and I don’t agree with the amount. But I do have [$250] that I can pay within 30 days to settle the debt in full. Let me know if you accept.”
During the negotiation process at Bank of America, the staff at the company will review your offer and decide whether to accept it or respond with a counteroffer of their own. It is not uncommon to go through several rounds of negotiating before an agreement is reached.
Step 3: Make Sure The Settlement Agreement Is In Writing
You should ensure that you abide by the settlement terms, including paying your payment on time, once Bank of America agrees to a settlement. Get the details of the agreement in writing once Bank of America has agreed to a settlement. Ask Bank of America to report your account to all credit reporting agencies as settled or paid in full if they are willing to.
Let’s look at how to settle a Bank of America debt.
For instance, Joe owes $10,000. The account gets sent to collections after several months of missed payments, and Joe then gets sued by the bank. In response to the lawsuit, he gives himself some time to analyze his finances and come to an agreement with the bank. He then offers a settlement offer of 30% of the debt. After several rounds of negotiations, the Bank of America debt collectors make a counteroffer, and after a few rounds of negotiations, they reach an agreement on 60% of the debt, or $6,000. As a result of the debt settlement agreement, Joe is required to pay off the debt within 90 days of signing the agreement.
There is a reputation among Bank of America users that they are fair when it comes to discussing debt settlement options. In case you fall behind on your payments with Bank of America, you have a higher chance of being sued by the company. By responding to the case, sending a settlement offer, and getting the agreement in writing, you can resolve your debt lawsuit.