How to Settle Debt with Bank of America

Edited by Hannah Locklear

Owing unpaid money to any lender is never ideal, but it can be even more challenging if you cannot stick to your regular payments with the creditor. If you owe money to a creditor such as Bank of America, you’ll need to make some decisions. You can attempt to negotiate a repayment agreement, consolidate your debt, or settle it.

Bank of America itself is known for its wide variety of financial services. Individuals can handle their checking and savings accounts with the company, take out a credit card or personal loan, or use their mortgage loans to purchase a home. The organization is the second largest banking association in America, following JPMorgan Chase, and has international branches in 40 countries worldwide.

You have a few options if you’re facing an overdue debt with Bank of America.

Consolidate your loan with Bank of America

If you have a few outstanding loans you’d like to pay off, you can consider debt consolidation. Debt consolidation involves taking out a loan from a unique lender with the sole intent of paying off your credit cards or other debts. Instead of making monthly payments to various creditors, you’ll make a lump-sum monthly payment to your debt consolidation lender.

You'll need a decent credit score to qualify for a debt consolidation loan with low-interest rates. Individuals with poor credit scores may still be able to get a debt consolidation loan, but the savings may not be very significant, and interest rates will definitely be higher.

If you don’t meet the requirements for a debt consolidation loan, you’ll need to consider other options.

Can I make an alternative repayment plan with Bank of America?

It is possible to set up alternative payment arrangements with Bank of America. 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 may be able to make lower repayments on the debt or reduce your interest rate.

Should I continue making regular payments to Bank of America?

Repaying what you owe is the best way to reduce your debt with Bank of America without damaging your credit. Take a look at your monthly budget, determine whether you can make any short-term cuts, and apply the extra money to pay off your debt.

If your schedule allows, you can take on a part-time job or start a side hustle to build up your savings and put more toward your monthly Bank of America bill. Within a few months or years, you may be able to pay off the entire balance and build up your credit score.

Can I settle a debt with Bank of America?

If paying your entire debt with Bank of America just isn’t feasible, you may be able to work out a settlement arrangement with the company. In a settlement, you agree to pay your creditor a certain amount of the outstanding balance via a one-time lump sum payment or a handful of installments spaced apart over several months. Bank of America is more likely to agree to a settlement if they see you aren’t making payments on time. You're most likely to reach a good settlement after about 5 months of non-payment, because at this stage, Bank of America is close to charging off the account and considering it a loss. So, if you reach out around this time, chances are BofA will be glad to accept whatever you can afford to pay.

Bank of America’s willingness to negotiate a settlement depend on how collectible you are as a consumer. If they think they would earn more money by taking you to court or continuing collection efforts, you are considered more collectible. Here are some factors that make a consumer collectible in Bank of America’s eyes:

• You own a home.
• You own several assets, such as a car.
• You have a steady income.
• You have only missed a few payments.
• You are not experiencing financial hardship due to outside factors.

Bank of America knows that taking your case to court would be an expensive endeavor, especially if none of the points above apply to you. Even if they win a default judgment against you, they may not be able to obtain payment if you don’t have regular earnings or savings.

Therefore, if you have the savings to fall back on, a settlement can prevent your account from ballooning into a lawsuit and allow you to save some money.

Settle a debt lawsuit with Bank of America before your court date

If you’ve been sued by Bank of America, you can fight back, win, and settle the debt at any stage of the lawsuit. Keep in mind that FIA Card Services, one of Bank of America’s main debt collectors, may be the entity listed on the lawsuit. Eithwe way, settling your Bank of America account before your court date is possible, but you’ll want to follow some specific steps to do so, as listed below.

Alternatively, check out this video to learn how to settle a debt with Bank of America:

Step 1: Respond to the lawsuit with an Answer

First, read the entire Complaint that Bank of America has filed against you. Note the amount of money they’re asking for, and compare the facts with your records. If there are any discrepancies, you can include them in your response to the lawsuit.

You’ll want to file an Answer to Bank of America’s Complaint, even if you intend to settle the matter before your court date. Your Answer should respond directly to each item in the Complaint, and an Answer prevents the court from granting Bank of America a default judgment against you if you’re unable to arrive at a settlement.

You can draft and file an Answer in all 50 states with SoloSuit’s help.

Step 2: Make an offer to kickstart the settlement negotiation process

Next, contact Bank of America to offer them a settlement.

Calculate how much you can afford to pay off, and do some research to learn how much Bank of America might accept. Some debt settlement services claim that Bank of America is likely to settle for 30-40% of the debt amount. For your first offer, you should consider a fair amount—60% of the total value of the lawsuit might be a good place to start.

Reach out to the opposing attorney, whose name should be listed on the court documents. You can call, send a letter, or even email. To make an initial offer, you can use the following wording:

“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.”

The staff at Bank of America will review your offer and determine whether they accept or respond with a counteroffer of their own. It’s not uncommon to go through several rounds of negotiation before reaching an agreement.

SoloSettle negotiates a settlement for you.

Step 3: Get the settlement agreement in writing

Once Bank of America agrees to a settlement, get the details of the agreement in writing. You’ll want to ensure you abide by the settlement terms, including making your payment on time. Ask Bank of America to report your account to all credit reporting bureaus as settled or paid in full, if they are willing.

SoloSettle manages your debt settlement agreement so you don’t have to.

Now, let's consider an exampe of how to settle a debt with Bank of America.

What is SoloSuit?

SoloSuit makes it easy to fight debt collectors.

You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt with SoloSettle.

SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.

>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit. (We can help you in all 50 states.)

How to answer a summons for debt collection in your state

Here's a list of guides for other states.

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Being sued by a different debt collector? Were making guides on how to beat each one.

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Win against credit card companies

Is your credit card company suing you? Learn how you can beat each one.

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