Received a letter today from Bank One saying they are going to charge off my Circuit City card. What exactly does that mean? Am I better off to let go to third party collection and negotiate with them?
If an original creditor sends it to a collection agency, that usually means TWO negative entries on your credit report, not just one. Which do you think is better, especially given that you will have to live with it for another 7 years?
BK is supposed to be a better notation than CO, but CO does not neccessarily mean that it will go to a third-party CA immediately. If this is your only negative account, declaring BK for this one account seems like trying to shoot a mouse with a machine gun. Try to work with the OC *NOW* before they have to CO it...
I think I may have something stupid. At the beginning of the year I signed up with a debt settlement company. 1: Because I did not have time to deal with the debt. 2: I did not have the nerve. They feel it is better if my 9 remaining accounts go to collection. I guess my thoughts are my credit is screwed up anyway, how bad can it get? and in 7 years it will all go away. I have learned my lesson--no more cc.
If this is a for-profit CCA, chances are they are not looking out for your best interests, but their own profit margins. Even some CCAs which claim to be non-profit, are actually for-profit CCAs, falsely claiming to be non-profit organizations. (See the second link regarding FTC Testimony on CCAs.) Some information on CCAs which may help you are provided by the FTC. FTC STAFF WORKS WITH CREDIT COUNSELING AGENCIES TO ENSURE DISCLOSURE OF COUNSELORSâ?? DUAL ROLE OF ASSISTING BOTH CONSUMERS AND CREDITORS http://www.ftc.gov/opa/1997/03/nfcc.htm FTC Testifies about Credit Counseling Abuses - Testimony Says that Some Firms Are Deceiving Consumers http://www.ftc.gov/opa/2004/03/credittestimony.htm
Is the CCA doing "ANYTHING", or did they only provide you with the advice to not pay anything, let them go into collections, and disappear? Them advising you to not pay anything seems a little shakey; their logic is probably that as a CCA the creditor may be more willing to play ball with the CCA if the accounts are in collections, or are soon going to be ("We'ld rather get something, instead of nothing."), but something about that advice doesn't sit well. Have you checked the BBB about the CCA? www.bbb.com lets you do an online search for information on them. But if these creditors, or the CA's which they may decide to sell the accounts to down the road think that the amount of the accounts is worth suing you for, you'll have a lot more problems, and they'll take more than just 7 years to clean up. Since judgements can be renewed in most states until they are satisfied in full, the governing statute of limitations can almost be indefinate, if the creditor or collection agency decides that they want their money bad enough.
