Any idea how much worst it is from a credit score standpoint to have a "settled for less than owed" rather than having it paid off in full? To make a long story short....by some fluke in Capital One's system I have reached a point with them where I can either pay 2600.00 and pay them off in full or 1017.00 as a settlement. As I said it is a long story (for the long version you can read my thread titled "Creditor wont take my money") but this comes off my record completely in less than a year. I have enough money to pay either way but what I am trying to figure out is if it is worth it or not. Jsted
I've been reading your other posting and considering all they've done to you, I wouldn't feel too bad about taking the settlement. The fact is, if it falls off within a year then this is a 6 year + old account, past the SOL, paying a settlement won't re-age the account as some fear-mongers will state. Just make sure that you have it in writing, that the settlement is going to show it paid off (there have been some unscrupulous entities out there who have made settlement offers, only to send the remaining balance off to another CA with the hopes of getting more money. The thing is, with something that is 6 years old and is not showing a balance (once your settlement is paid, they mark it settled for less than owed, but still must mark it with a $0 balance) there won't likely be any more damage to your credit score than if it is paid in full $0 balance with the same other derogs. The only real thing about an old account that will hurt you is when it does have a balance - as some car loan or mortgages won't approve if there is a balance shown.
Yup - this is an excellent time to remind people of "accord and satisfaction" and the difference between "settling" and "paying on" a debt. If a debt is truly being "settled", ALWAYS get that in writing -- it's the proof you'll need if they ever try to sue you for the "remaining" balance. The only time you re-start the SOL is when you're simply "paying on" the debt.
The problem is I DID make payments in the amount of $1150.00 over 4 months to this. (This is a very long story) So the SOL has has been re-aged...BUT does that mean the account will stay on my credit longer? My credit report says it is scheduled to come off my report in November of this year....
Yeah, if a debt is still showing that it is scheduled to come off, and unless you agreed to re-activate this dead account, you are still in the clear. When you start paying and get an account back in good standing (get it paid up to what is past due) then the clocks can start again. Even thou you paid across the 4 months, those weren't payments on an account to bring it current, it was to pay a settlement. So don't worry, be happy!
