The term 'pre-litigation' at this point of default with a Citibank credit card or other similar loan means nothing of significance, or you are just going to be, or will soon be flagged for legal action by an attorney who is authorized to file a lawsuit against you for the purpose of collecting on the debt. However, if you are going to use Citibank as part of your credit card collection strategy, your lender may consider a pre-settlement action as a negative mark against your credit score and thus take steps to eliminate it before the case is ever brought to the courts.
The process of settling with the credit card company involves negotiating a settlement amount with them, which will be less than the total amount of the debt. The card issuer will then pay a large lump sum to the collection agency. This is known as “settling” in the legal industry.
Once the agreement has been reached between you and the credit card issuer, they can go into mediation and try to negotiate a new payment plan with you to settle your credit card debt. It's important to remember that the settlement amount may never be lower than the original debt. You can't get the card issuer to negotiate on your behalf, but you can hire a financial institution that specializes in debt negotiation to do the negotiating for you.
If the negotiations don't go well, then your credit card collection agent can take you to court and file a lawsuit to have you paid. If you don't have a good attorney on your side, the process of filing a lawsuit could put you in jail. If the court allows the action, the collection agency can take possession of your assets, and you would not be able to recover anything from the bank, as you would have been forced to go into bankruptcy and repay the balance due on your account's.
In most cases, there will be a “settlement” amount on the balance that has already been discharged. But the settlement amount might be less than what you actually owe, and the debt collection agency can use that as leverage to try and convince the bank to force you into bankruptcy proceedings.
Your best option is to talk to a credit counseling agency or a credit repair firm, which is able to negotiate on your behalf for your card issuer. and prevent the collection agency from going to court . . . . . . against you. Most of the time, these services will only charge a small fee to provide this service.