Recieved a letter from a CA (Arrow Financial) for 75% settlement. They seem like they're pretty with it (list state-relevant license #, OC name, current balance, and rather "friendly" notice of collection with contact name, number and website. I'm sending the DV letter out just to be safe. Three questions: 1. Can I reasonably expect to negotiate a settlement amount lower than the amount offered in the CA letter? For instance, I suspect very large interest charges and late fees have been lumped into the total amount listed - the 75% amount sounds closer to the original debt owed. 2. Once debt is validated, I've read that a settlement is worse than paying in full. 3. If I take the settlement, CA letter states that "credit bureaus will be notfied that the account has been settled". How does this reflect compared to any other option with the CA on my CR. Thanks in advance ...
Others here advise that a paid collection account is just as bad as an unpaid one as far as credit scoring is concerned. Your best bet is to admit nothing and send the Validation letter, Certified Mail, Return Receipt
OK... So outside of a moral obligation to settle a debt that I know is legitimate, what is my motivation to pay a collection debt off from a credit standpoint?
How old is the debt? and what is the SOL for this type of debt? Legally you may not be obligated to pay it at all
The debt is a CO that is three years old and my only collection account. It was a cc I shared with my ex-girlfriend (she was authorized user) and I refused to pay some of the bills on, but that's another story. Based on posts from this site, the SOL is probably 7 years from the CA action which occurred late 2003 so I imagine I'm legally obligated to pay it and it seems like the CA will respond with all the information demanded in the DV letter I'm sending. My question is, if there is no difference on the credit score/report if it's paid, settled or unpaid, and I can't get it removed no matter what, why should I pay this?
The SOL for collecting on debt varies according to the state you are in...you say it was charged off 3 years ago, in some states that may already be over the SOL AS far as 7 year reporting period, if you are looking for a mortgage they will require all co's to be paid, also, any type of installment loan will be at a higher interest rate than if there were no co's on your report, it may cost you a lot more in interest payments on a new loan, than it will cost to settle the old account
Re: Re: CA Settlement Question ... Thanks for the quick replies. I knew there had to be some real-world reason compelling me to pay an old CO. I'll wait until I receive the DV letter, but it's already hurt my score. I'll settle out and move on with life. Regards
Re: Re: CA Settlement Question ... Before making any decisions, you need to find out what your states SOL is. If your state's SOL is 3 years, then they can't escalate actions against you, and get rid of the CA. You want to look for the SOL for an OPEN account in your state. You can find a list of state SOLs at WhyChat's site, which you can find in the post in my signature.
Re: Re: CA Settlement Question ... Is Arrow the one who is reporting it, or only the OC? If the OC is currently the only one who is reporting it, then chances are that the OC's trade line is exactly how it will remain. In other words, if the OC is showing $0 Balance PAID CHARGE OFF (or ACCOUNT TRANSFERRED OR SOLD) this is going to stay like that whether or not you pay the CA or not. If Arrow is reporting the account, if you dispute it through the CRA's when you know that Arrow has signed for the green cards, there is a chance that you could get rid of Arrow's listing if Arrow can not respond to your validation letter within 30 days.
Re: Re: CA Settlement Question ... Ok. Here's what is on the report: FIRST there is an Arrow Financial trade line for the amount $615, which is $8 more than the $607 Total Current Balance listed on the Settlement letter Dated June '04. Credit Limit/Original amount lists as $433. Comments read "Seriously past due date - assigned to attorney, collection agency etc., ALSO there is a balance date of June 1 2004. So they seem to be keeping this thing current by continuing to add interest to the original balance amount. Can they do that?? THEN there is a trade line from the OC further down on my Report for $433 listed as of April 2000. This account is listed as CO with comments "Credit Line Closed - Consumer Request - Reported by Subscriber" and "Charge off" I'll check the SOL - it seems like the LEGAL ACTION LIMITATION time is what I need to check, but it seems like the OC trade line won't move although I'd really like to get rid of this active CA line. Thanks for the continued interest....
Re: Re: CA Settlement Question ... Yeah I am working Arrow right now part of Alegis Group lookem up on the net.. They have never contacted me and never validated have failed to show debt in dispute and continued collection activity by up dating the report with interrest. These guys get taken to court with-in the week.
Re: Re: CA Settlement Question ... Sounds like they've been a lot less forthcoming with yours. Arrow sent me a pretty thorough letter and I'm anticipating that they'll be able to validate within 30 days on my account. I just don't understand who is continuing to accrue the interest on this account. Does the CA get that money or do they send it back to the OC? Clearly it's just a gimmick to keep the account actively reporting on my report like a virus, because the Settlement Letter offers to eliminate virtually all of the interest they've accrued since acquiring the account.
