So here is my story: I'm 27 and am currently in what seems like an endless hole of debt. It is only 7,300 which to some people may not be much but to me is overwhelming. I use to have a good job and always paid my card off in full each month. After loosing my job I still managed to make minimum payments for about 2 years without a job and without any unemployment compensation. Eventually I ran into a wall where I was unable to pay on time one month. This started my downward spiral. The minimum payments were simply too high and I was never able to catch up. I basically went into panic mode and avoided their calls for almost 6 months. I think I talked to them maybe once. I received calls at least every day. Eventually they informed me that my account would be transferred to a CA. I then began to receive calls from a CA by the name of United Collection Bureau. I have spoken to them a couple times. One of the first things they told me was that my account is still owned by citi but is now being handled by them. After reluctantly answering one of their phone calls, without any real negotiation on my part they told me they'd be willing to settle for $5,000. I've never dealt with anything like this and was kind of surprised they'd just knock off $2000 dollars like that. This was somewhat relieving, however, I informed them that this was not possible since I have no job and no real assets (I live at home and am back in school). I told them my parents were also struggling and there was simply no way I could just come up with $5,000 dollars RIGHT NOW. I told them "I would talk to some people" and try to come up with it (even though I knew I probably couldn't). About a month or two went by without me answering their calls. During this time my parents found out about my debt (UCB sent me a letter in the mail that was intercepted by my parents)(I was trying to handle it myself because I knew my parents were struggling as well). They convinced me that this was something I needed to handle ASAP (I knew it was too but the anxiety was overwhelming). I called them back yesterday for the first time in months. I had no real intentions of paying anything but was more or less just trying to gather information on what my options were. The lady who has been handling my account is actually quite pleasant on the phone. After some talking she told me to hold so she could talk to her "boss" about another possible option. She came back and told me that "today and only today" (since it was the end of the month...not sure what that means) they would accept a settlement of $4,053. I told them that was nice and all but I still didn't think that would happen. I told them I would talk to my parents and call them back by the end of the day. I am smart enough to realize that if she lowered my settlement that much with no actual negotiation that her "today and only today" speech was most likely bullshit. In other words I didn't call them back. Long story short, I am completely new to all this and just very confused. My parents are now saying they'd be willing to lend me about $3,000 but I still don't know what is best. I have read so much conflicting information on the internet and need to be pointed in the right direction. My biggest concern since I am still young is repairing my credit. I want to get this over with and walk away with as little damage to my credit as possible (I actually have no idea what my credit score is...should I check?). Should I settle for the amount they have given me? Will settling for a lower amount hurt my credit even more? What's this about validation? Some people say I shouldn't answer their calls, some people say I should. What should I do? At what point will they sell my debt to a CA? Is this good or bad? What should I do? Should I use a debt consolidator? So many questions. If someone could just even offer a little information that would be great.
My dad just printed out something he found on the internet called a "Pay for Delete (settlement)" Letter. He thinks I should send this in. It basically states that if I pay the settlement ($3000+ less than the full amount), they'll agree to drop all negative credit history. This seems too good to be true for me. Is this something that is actually possible? Again, my biggest concern is not dodging the settlement through court or whatever, it is to get out of this with as little damage to my future as possible.
Welcome to Creditnet! Hopefully we can help out with your situation a bit. Here are a few quick thoughts... First, most of the damage to your FICO scores has already been done. Paying off or settling the debt won't necessarily do anything to improve your credit scores unless you're able to remove the account altogether in return for payment. So, I would definitely send a DV letter first. You want to make sure you're paying the right party. Also, settling for a lower amount won't hurt your credit scores more, so settle for as little as possible. If I were you, I would avoid the phone and keep all my communication in writing. You want the documentation anyway. And finally, a debt consolidator isn't worth the time or money. Can you share with us what your PFD letter says?
