Negotiate a Credit Card Settlement with PenFed or RA Rogers Collection Agency

My wife got a credit card from PenFed with a $40,000 limit. While it came RIGHT BEFORE our recession hit, we proceeded to use it to live for a while. We eventually lost our home and had to take our kids out of school and relocate. We tried to keep up with the payments but eventually they buried us and we stopped making them. I called back to see what I could do but they had already written off the debt. The Debt was bought (at least the company who wrote me the letter) is R.A. Rogers and they say I owe them $54,443.00 (we only used the original $40,000). So, the letter I got and it was the first, asks me to VERIFY my debt by responding by January 13th or they will assume the debt is valid and proceed with collection.

Do I contact them by phone and try to negotiate a one time settlement? Do I respond to the letter and validate the debt? What is the bet next action for me to take? ANY information would be gratefully appreciated!

PenFed is a credit union and RA Rogers is mostly known for offering contingency debt collection for credit unions. I would not assume RA Rogers bought the charged off credit card from PenFed, but it is possible. My feedback below is general in nature until you respond with some answers to questions about your goal to resolve the debt, and your financial ability to follow through.

Settling credit card debt with a credit union like PenFed

Debt settlement with a credit union is often different than settling with national banks. The foundational concerns you will have when negotiating credit union cards like; can you come up with the lump sum needed to settle; if only able to do a payment plan, can your budget support the monthly amount needed; will resolving the credit union account be the best use of your available funds if you have other debts outstanding – all apply in the same way you would be concerned with settling with large banks like Chase or Bank of America. The additional concerns you will have with a credit union like PenFed are:

  • Credit Unions often have cross collateralized verbiage in their credit, loan, and even insurance products. This would mean defaulting on credit cards with Pen Fed could lead to knock on impacts to other accounts you have with them. So, first question:

Do you have other accounts with PenFed other than the credit card mentioned?

  • Some credit unions do not settle in the same way national credit card issuers do. One of the differences will often be a requirement to document your hardship in order to approve a settlement, or in order to get the lowest settlement possible. Next questions:

What were the conditions that led to your losing your home? Do those conditions still exist?

Settling with a debt collector like RA Rogers

Like I mentioned above, the fundamentals of settling a charged off credit card debt do not change much from one account to the next. At its core, settling a debt for less is simply based on something is better than nothing. The collection agency or debt owner is going to evaluate what they can see about you through your credit report and other public media in order to determine what amount to accept as a settlement or payment. The way each debt owner, creditor, or collection agency evaluates this is where nuanced x equals y variables come to play. They have standard operating procedures and floors for accepting settlements, and you have ceilings for what you can financially do. This brings up my next questions:

Your PenFed credit card had a high balance to begin with. It went from 40k to over 54k.

When did you last make a credit card payment to PenFed?

What state do you live in?

Is RA Rogers the only debt collector you have heard from whether through the phone or a letter in the mail?

Did the RA Rogers collection letter you refer to reference they are collecting for PenFed, or did the letter reference them as collecting for themselves or debt buyer? Was there a payment remittance address on the collection letter?

What are you financially prepared to offer to settle the debt? Is that amount available immediately?

If you need time to come up with funds over time, how much time will you need?

Requesting debt validation from a debt collector like RA Rogers

Requesting a collection agency to validate a debt is your right. It is also a tool to help you establish some base lines when all you want to do is settle the debt. That said, debt validation request can be a complete waste of time for some situations and can even backfire. See this article for more on backfiring debt validation requests:

If your goal is to settle a debt you know you owe, and you want to be certain you are dealing with the proper debt owner or the assignee of your creditor, you can call PenFed directly. If PenFed tells you they sold or assigned your credit card to RA Rogers, that settles that part of the validation. Now you need to determine if sending a debt validation request will help you accomplish some other goals.

Depending on your readiness to jump right in and start negotiating a payoff and document a settlement with RA Rogers, sending a debt validation request would not be necessary.

If you can answer my above questions using the comment reply box below I will be better able to provide additional feedback.

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Michael started CRN in 2004 with a mission to provide people in need with detailed debt and credit help and education. Michael has participated as an expert panelist in federal consumer protection rule making, collaborated on state law changes governing debt consolidation, has worked as an expert witness in court matters related to the debt relief industry, and is a regular contributor to several personal finance websites.

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I have a an outstanding debt for a PenFed credit card that I#8217;m considering my options on. In 2012 I moved from CT to NH and had a lot of financial troubles including a short-sale involved. I have since settled all of my CC debts etc except PenFed. The original balance with them was $5100. I haven#8217;t made a payment on it since 2012. The balance due now is $6900 through NCC (Nationwide Credit Corporation). I#8217;ve searched online for hours and there is very little info about settling with Penfed available; I#8217;m hoping you have some insight. Here are my questions:

1. I think I#8217;m past the statute of limitations on this debt for both VA and NH, the VA seems to be a gray area. Hopefully NH applies regardless. Do you have any experience with this?

2. NCC is offering me $3900 lump sum settlement, otherwise they #8220;have to go back to PenFed#8221; and want a hardship application with 1099s, bank statements, etc. I do not think my current financial situation would substantiate a hardship, so I do not wish to go this route. Should I take their offer or wait/push for a lower amount based on it being time-barred?

Michael Bovee says

New Hampshire has a 3 year SOL to legitimately sue on unpaid credit card debts.

If it were me I would not provide documents that do not support a lower settlement, and I would wait and see if they are able to take a lower offer that I can afford nearer the end of the month. I would wait even longer if necessary.

Do you have any credit goals you are trying to accomplish in the next 6 months?

Hoping to get a mortgage in the next 1-2 years and this is the last unresolved item on my credit report. I can wait longer#8230;maybe hit them up again in 2-3 months at the end of the month? Should I tell them to give my offer to Penfed without the documentation anyway? Even when I was in the midst of the short-sale and drowning in credit issues with job changes etc they weren#8217;t interested in my fully-documented hardship application. They seem particularly difficult to deal with.

Michael Bovee says

I would want this unpaid collection resolved within 12 months of applying for a mortgage if I had the ability to plan for it.

You may be able to save a few more hundred dollars, and perhaps 1k-ish more then the current offer. You have time on your side right now. At some point you will want to weigh the savings you hold out for with the time you lose, and with no guarantee the payoff will improve (though I think it will) without documentation.

So, a couple last questions.

The letter from R.A. Rogers states that I have till January 13 to respond with validation.

Should I call them BEFORE that to establish a line of communication or wait for their next letter. I would worry it may be more #8220;intense#8221;

And yes, it was a short sale!

Michael Bovee says

The date on the RA Rogers collection letter and reference to your disputing, or requesting the debt be validated, is a legal requirement to have there. The 30 days stated is part of the requirement as well. Calling before or after the 30 days when all you want to do is resolve the account by settling with what you can afford to pay in a lump sum is not likely to be all that meaningful. As mentioned prior, the validation request in your situation would be strategy related. I have not yet published the report on debt validation strategies.

Your concern about their next move being intense is very real. In my opinion their next move has a high percentage risk of filing suit to collect. A validation strategy done properly and with the right expectations could be useful.

OK so if I join your service will I be walked through that process?

Michael Bovee says

Michael -Yes, and then some.

I feel like an idiot..i#8217;m trying to sign up and having a time finding where to do it.

Once I figure this out (and I have an internet business so I should be able to figure this out :-)) ), can you and I chat on the phone by chance?

Michael Bovee says

Michael #8211; I see you successfully started your membership in the back office. Yes, we can definitely speak yet tonight. My direct number is in my signature line of the email I will send you.

Thanks for the additional details. I am available to provide the benefit of my time and experience at no cost when that interaction occurs on the CRN site. Email and phone support is exclusively limited to CRN members and supported by myself and other CRN specialists.

If you are so inclined, please post your below answers in the comment section of the page you started.

In addition to the below details you provided, please include a brief outline of past financial hardships that led to the inability to pay debts, mortgage, etc. If there are still hardships that persist, point those out too. Hardships matter when negotiating (some more than others).

From: MICHAEL XXXXX [mailto:[email protected]]

Sent: Tuesday, January 08, 2013 12:28 PM

To: Consumer Recovery Network

Subject: Re: Your question to CRN has been answered

Thanks for getting back to me!

Here are the answers to your questions.

1. Your PenFed credit card had a high balance to begin with. It went from 40k to over 54k.

YES, I spoke to PenFed this a.m. and they confirmed that the original debt was $43,566.46 and that they charged it off to R.A. Rogers. And that there was a 25% #8220;charge off fee#8221;

2. When did you last make a credit card payment to PenFed?

Don#8217;t know exactly, but I THINK it was in LATE 2011. When I talked to their collection dept. today she said that the last time we were on the phone attempting to resolve the debt was Feb 2012.

3. What state do you live in?

4. Is RA Rogers the only debt collector you have heard from whether through the phone or a letter in the mail?

NO, however right or wrong, I did pay a couple of them off over the past twelve months (i.e. Chase, Best Buy, Old Navy) charge offs. I received collection letters and out of fear called and payed them. Chase was the largest approx $11,000 and I payed them $3500 and change. the ONLY one I have other than the PenFed is a Capital One Collection THAT WAS an HSBC credit card that became UN-BEKNOWNST to us a Cap-One debt. They have been caling us off the hook with an offer of ABOUT $0.60 on the dollar offer.

5. Did the RA Rogers collection letter you refer to reference they are collecting for PenFed, or did the letter reference them as collecting for themselves or debt buyer? Was there a payment remittance address on the collection letter?

I think I answered the first part of this in #1. It was charged off from Pen Fed#8230;#8230;.and YES, there was a payment request for the full amount. It #8220;seems#8221; like a boiler plate request though. Meaning, they say BASICALLY if you agree with this debt please send payment to the above address.

6. What are you financially prepared to offer to settle the debt? Is that amount available immediately?

I am prepared to offer AT MOST half the amount in a full as a one time payment. BUT I would like to negotiate that IF POSSIBLE and if 50% is the amount I pay, i#8217;d like it to be 50% of the $43,000 NOT the $54,000.

And Yes, I have that available right now.

7. If you need time to come up with funds over time, how much time will you need?

I cannot tell you what your help means! I VERY MUCH appreciate any further assistance you can afford to give (time wise that is).

Michael Bovee says

You are in a good position to offer settlement on the PenFed account with half of the current balance. Determining what amount you may be leaving on the table would require some analysis of what led to the loss of your home and the inability to keep current with payments then, and the inability to pay some form of installments now.

Given all of the details you provided your credit report will look as if a grenade went off on it. That plays to your hand with settling the PenFed credit card too.

There are some #8220;do#8217;s and dont#8217;s#8221; for negotiating a debt this size. It will matter if PenFed no longer owns the debt. When I asked about the #8220;remit payment to address#8221; I was asking in order to look for a hint of ownership.

Your original questions:

Given the additional info you provided I do not currently see a real benefit to sending in a debt validation request. If PenFed still owns the debt it would be very simple for RA Rogers to obtain the documentation to send to you as validation. If RA Rogers purchased the debt, or is working for a different debt owner than PenFed, the balance owed is certainly enough to justify the expense of going back to PenFed and paying any additional cost to obtain documentation needed to verify the debt. Validation requests at this point would be a strategic move to assist you with the negotiations.

Debt negotiation is by far better to do over the phone, and not through some form of letter writing. Sometimes one call is all that is required to get the settlement terms agreed to, followed by sending supporting documentation of the agreement before you fund it. There are other situations where several calls would be needed to lock in the details and document the agreement.

As far as your next step, I am going to recommend you consider CRN membership and allow us to help you through the process of your negotiating this on your own. Given the dollar amounts involved, having someone in your corner on this one would be a good idea. Otherwise, you should look to work your way through the settlement soon. If the dunning letter you referred to in your first post is the first letter you received from RA Rogers, your risks of escalate collections go up from here.

On a side note. You copied the entire email I sent to you in the above comment. Your email address and full name were contained in the comment. I edited out identifiers before approving it.

WOW!! OK#8230;..Well#8230;.a couple last points#8230;#8230;(and before I do, I must say that I HAVE NEVER dealt with a company as helpful to #8220;strangers#8221; as yours. I will be writing reviews and telling people of this help everywhere I can!) Hopefully there will be a good resolution to boot!

Now, As this is my wife#8217;s debt. HER credit is in fact a war zone. So that may help (I Guess) as you say.

The reason we #8220;lost our home#8221; was that we were/are in the entertainment industry and we both lost our jobs at the same time not to mention my union going on strike. As well as many other smaller yet relevant elements.

Another point/question. While I WOULD LOVE to have your companies personal help, I am trying desperately to climb out of this without having a small breakdown personally AND finically. having said that, I have set aside, what I hope will be, a good enough chunk of money to make this go away About half or just less of the original amount to pay to get this CLOUD off our minds. And while I don#8217;t want to be short sighted by cutting off my nose despite my face, I don#8217;t think I could afford the 15% extra your company requires to settle. Unless I am not understanding your fees.

IF joining this membership is the right thing in your opinion and you believe (assuming what I told you is true, which it is ) then I#8217;ll do it. But I don#8217;t know if I can afford the fee#8230;thoughts?


Michael Bovee says

Your wife#8217;s credit report resembling a war zone helps in negotiation for the following reasons:

  • Creditors and collectors have real time access to credit reports of the debtor. What is seen on the credit report will often dictate how collect-ability on the debt is viewed.
  • If payments to other creditors are reflecting current, a collector sees an opportunity to collect, or collect more, and is less inclined to offer the best settlement balance.
  • With the many credit cards that have gone unpaid, and which show as being charged off; if the home was lost through a foreclosure or short sale; additional collection trade line entries; any claims of a financial hardship to a loss of income are going to be substantiated by what appears on the computer screen shots of her credit report.

    I would surely appreciate any awareness you would spread about the CRN site and the help available to people. We have never done paid advertising and have relied on word of mouth and organic exposure. It is always appreciated when people we help share with others.

    I do see where your understanding of how CRN charges for a product or service is not complete. I will take that feedback as an opportunity to make changes to our Get Help page. In short:

    CRN offers a product and a service. The two are separate and distinct from each other. The 15% of savings fee you refer to is only applied to the service. Our service is when we are asked to do all of the negotiations and get everything documented for the person requesting help from us. This is us providing a direct debt settlement service. We do not offer this service to everyone who requests it. Not everyone wants to, or believes they can settle their own debts like a pro, and save on all the fees. You have already had success settling your debts, so you know that settling credit cards is not necessarily simple, but not tough in the sense that nearly anyone can get the same or better results than by hiring a company.

    The CRN membership is a product. Your membership gives you advanced education and one on one consulting with a specialist who does all this stuff full time. This product is designed for you to be able to negotiate and settle debts on your own with the additional benefits of real time data, and the confidence of anytime access to a professional to discuss applicable strategies and adjustments designed to help you accomplish maximum savings, and avoid pitfalls that come with what are sometimes fluid settlement situations. Our membership product costs 149.00 to enroll. Continued membership costs 50.00 a month thereafter until you decide to stop. Our first goal with anyone we work with, even those expecting to have us do the negotiations, is to show how settling on your own is not only possible, but gets you out of debt quicker because you don#8217;t pay for a direct debt settlement service.

    We also offer completely free information and feedback on this site to whoever requests it, as that is sometimes all that is needed to resolve one off scenarios, or where even CRN membership, as affordable as it is, is still cost prohibitive.

    Given all that you have shared you would be through the heavy lifting in a month. I hope that brief outline of how we assist people provided clarity.

    Penfed Credit Card: The Different Variants

    Have you ever thought about having the Penfed credit card (Profit You Will Get from Personal Loans No Credit Check Monthly Payment. Read more #8230; ») ? You probably think what it is good for you to have the credit card in lines with the arm forces. Well, you will be surprised to find out the basic perks of becoming a member, after all.

    Penfed Credit Card: Understanding the Basic Concept

    The Penfed credit card is actually short for Pentagon Federal credit card, which is a part of the credit union offering major benefits (TCF Credit Card: The Benefits to Enjoy. Read more #8230; ») for the members. Do you know that by becoming members alone you can have a direct access to some credit cards (Commenity Credit Cards: What to Know about It. Read more #8230; ») – of course with different features that may fit your requirements? If you are a member of the Coast Guard, Air Force, Department of Defense, Army, Department of Homeland Security, Veterans of Foreign (Mileage Plus Credit Card: The Cards for Flight Fare. Read more #8230; ») Wars, and other related organizations, you can get this Penfed membership.

    Here are some of the options:

    • Power Penfed Visa Signature Cash Rewards. This card has 0% of APR for 12 months promo balance transfer rate and 3% balance transfer fee now. Afterward, any unpaid balance or new balance transfer will be charged around 9% to 18% APR. You can enjoy $100 bonus (Cash Back on a Credit Card: Benefiting Yourself. Read more #8230; ») if you spend around $1,500 within 3 months after opening the account. You can also enjoy 1.5% of unlimited cash back for all of your buying. It doesn’t have the annual fee.
    • Penfed Gold Visa. This card has 0% of APR for 12 months promo balance transfer rate. Afterward, any unpaid balance or new balance transfer will be charged around 8% to 18% APR. You can enjoy $100 bonus if you spend around $1,500 within 3 months after opening the account. It doesn’t have the annual fee.
    • Premium Penfed American Express Travel Reward (Credit Cards with No Foreign Transaction Fee: The Limitless Options. Read more #8230; »). Enjoy 0% of APR for 12 months promo balance transfer rate. Afterward, any unpaid balance or new balance transfer will be charged from 9% to 18% APR. Feel free to get 5 points for airfare buying. It doesn’t have annual free. You can get 20,000 bonus points for spending (Cash Back on a Credit Card: Benefiting Yourself. Read more #8230; ») $2,500 in the time span of 3 months after opening the account.

    There are still other types of cards to choose – feel free to browse around. So, which Penfed credit card you want to have?