Dealing with debt for the first time...

For a start, collectors will tell you anything, and you don't have to tell them anything. She broke the law in telling you that they will have to take legal action. They can't say that unless they almost already have litigation in the works, which would be generally up to the original creditor. The charges sound funny as well. Send them a letter (return reciept) demanding full validation of the debt, explaining how they are calculating these amounts. Also, if legal in your area, record the calls.

What does return reciept mean?

But basically what you are saying is that they are not really a threat to anything buy my Credit Score?

All I want to do is get this debt out of my life. I just want to make it go away and get on with what I'm doing. How do I start the process of making that happen?

The debt validation letter will force them to explain to you exactly what they are charging you and what all the extra fee's are for..Return reciept...you send them a letter through the post office requesting a return reciept (this costs a little more) then when the company recieves the letter they have to sign for it and you will be notified of it's delivery. This way they can not say they didn't get it and you have proof they did.

Under fdcpa a collection agency can not threaten to sue you. So, the next time they call you, just ask them to put everything in writing. Send them a debt validation letter via certified mail with a RRR, so that you have the proof that they have received your letter. Do not pay them a single penny, let them prove that you owe the money to them.

What state do you live in???

Another good idea, is to drop Wells Fargo ASAP.
They'll screw you over real good too!!
Had a checking account with them, once. Dropped them after they caused me all sorts of problems. And refused to fix THEIR mistakes.

No longer have a checking/savings account anywhere.
After what I've gone through, I can't trust the banking system to safely manage my money!

Personal opinion, based on personal experiences.

I live in CA. I do want to drop Wells, but how am I to pay any other bills? I have a record with banks, so I don't think I'll be able to find a better one.

I was also wondering more about sending a "validation letter". I've never done this kind of stuff before and not exactly sure how to do that, what to say, or how to get a "return receipt".

Also, what is the next step for the collectors view. Can I be in serious legal trouble if I can't find a program that will help me deal with this?

Go to the DIY section of this website, I believe there is an example there of a letter requesting validation. Return reciept is when you send a letter registered, or certified, and fill out the card to have the person sign for the letter. The card is then mailed back to you, as proof that they got it.

Step one is to send them that validation letter, and in it say that you dispute what they say you owe. Have they sent you a letter? They had five days to do so after first contacting you. If they haven't, they've also broken the law by demanding payment within 3 days. It's called overshadowing, ie., they demand this payment within the 30 day time frame you have for disputing the debt. I wouldn't think you'd be in "serious legal trouble". You have rights, click on the link regarding the fdcpa on this site. And remember, they are the ones who can get into "serious legal trouble" if they lie and/or abuse you in any way.

The only letter I have gotten from them is the one saying that I owe 2k and if I pay now I only have to pay 1600. I understand that and I know I do owe that. But I don't understand them doubling the amount and then adding 200 a month in interest (which is what they told me over the phone). Actually it was 100 a month and then I said I can't afford their program and she said 200 a month the next time.

I do know that Citibank will sue for bad debts. Citibank is the creditor for Sears.

Your account sounds like it is still intrest bearing. The intrest rate on the Sears card is the maximum your state allows, you probably have a 35+ dollar late fee and maybe an over the limit fee. A debt of around 2k, you are likely getting charged somewhere near 150 a month in intrest and additional fee's. All of these fee's are coming from CitiBank not the collection agency.

CitiBank does reserve the right to decline proposals from counseling agencies.

Hmmm... So what do you think is my best plan. I can't make any deal they offer. I can't bring and deal of my own to the table. So... I just wait untill the interest makes what I owe a outrageous number? And go from there?

Send your debt validation letter to them certified return receipt mail. The third link in my signature at bottom of post is a good one to use. Make sure they validate the debt.Then if they validate,you can worry about making payment arrangements.

I think it's great if you can get a validation letter quickly. Because if the account is still intrest bearing that means it's not reflecting as a bad debt on your credit report but as a slow pay.

Sears retail cards charge off after 210 days of non-payment. Until the 210 days has expried you will continue to recieve fee's.

My suggestion would be to come up with the total past due balance and send it to CitiBank. Sure the collection agency will still get paid for it but it's somehting you can do while waiting on the validation letter.

Having caught up your total past due you won't recieve anymore late fee's BUT you will still recieve the intrest and collection calls unless you have arrangements on file. You will still recieve statements b/c of the interest. By law CitiBank must send them to you as long as the account is still intrest bearing.

See if you have balance transfer avaliable to another card. Balance transfer intrest rate is around 9%. Considerably better than the intrest rate CitiBank is charing you currently.

That's a quick fix if you have the avaliable credit to do it.