Is It Better to Settle of Pay

Discussion in 'Credit Talk' started by Killer, Nov 28, 2000.

  1. Killer

    Killer Guest

    Is it better to pay the whole balance on a collection or charge-off? One amount is too large and I know I can only afford a settlement. However, two balances are small. Should I pay the whole amount on the small balances? When I later dispute, will the creditor less likely to respond if the balance was paid in full? Citibank and Chase told me if my balances were zero on my collections/charge-offs they would approve. How do you think they will look at settlements vs. paid in full?
     
  2. Momof3

    Momof3 Well-Known Member

    Killer

    Concerning the 2 small amounts, how old are they? I have heard if they are older and you pay them some agencies won't respond to verification, although I am sure some will til the end of time. Also could you possibly when making offer to settle debt get them to report this as "Paid in Full", maybe include that with your offer?? Kristi's site has many settlement offers, maybe you can piece one together to fit your needs. I wish I could give you better advice.

    Mom
     
  3. Killer

    Killer Guest

    RE: Killer

    The 2 small amounts are scheduled to come off in summer of 2002 and are not uncollectable. However, they only total $500. Since Citibank and Chase say they will approve if paid, I want to pay them. Also if they are paid I think I can borrow money from credit union to clear the large one. The large is collectable and not scheduled for deletion until 2005! And it's a whopper!
     
  4. sam

    sam Well-Known Member

    RE: Killer

    Keep in mind paying them, will bump the 7 year timer of last activity legally.

    You want to negotiate in writing, for the entire removal of any trade line activity for the immediate settlement of account for $xx. (Get it in writing on their letterhead first before paying).

    It would be awful to pay a collection, and have to wait 7 more years from date of payment.

    Correct me if i'm wrong, but thats what i was told by a credit repair man.
     
  5. Momof3

    Momof3 Well-Known Member

    RE: Killer

    Oh yes your secret whopper, just kidding. Well with the small ones maybe you can ask for deletion in exchange for payment, I must tell you it isn't go well for me right now with hubby's 246 collection, but I am still trying, they refused to delete but I sent another letter and also received a tip from a fellow poster she had same problem and finally adressed her letter to head of collections they agreed and responded quickly, so it may be worth a shot atleast you could try.

    Mom
     
  6. Momof3

    Momof3 Well-Known Member

    sorry wrong sam

    The cannot restart start the clock with a payment, it starts from last day of activity and ends 7 years and 180 days. The FCRA revised their guidelines the only "clock" it in can restart is the SOL".
     
  7. Momof3

    Momof3 Well-Known Member

    opps sorry meant to say delinq

    I mean FIRST DAY OF DELINQUENCY, sorry I just read activity and wrote it
     
  8. RichGuy

    RichGuy Guest

    Not Very Wrong

    Debts that went delinquent before about 1997-98 are grandfathered, and making payments on them can allow creditors to legally reset the clock. It's right there in the revised FCRA, although the calculation involves 455 days from some date I don't remember. Sam was essentially right. Saying he was wrong was essentially wrong.
     
  9. Momof3

    Momof3 Well-Known Member

    RE: Not Very Wrong

    I was speaking for debts after the 1997 revised guidelines.
     
  10. Momof3

    Momof3 Well-Known Member

    Krisiti, maybe you can shed so

    Maybe you can add your thoughts to this one???



    Mom:)
     
  11. RichGuy

    RichGuy Guest

    Relevant Advice

    Killer's two small debts are scheduled for removal in 2002, and therefore had last activity in 1995. Sam's advice was relevant to this situation, and was in no sense wrong.
    Speaking of an entirely different situation was fine, but did nothing to prove Sam wrong.
     
  12. Momof3

    Momof3 Well-Known Member

    I wil; save you the trouble K

    This was your reply when Roni was concerned about his very issue:

    Regarding the dates of before and after 1997

    Please read this in full to understand it. The problem with most of these issues is that people skim over it and miss critical points.

    Because the commencement of the seven year period is now described with some precision by the statute, it is our opinion that none of the subsequent events you listed -- sale of the charged off account by the creditor to another creditor or collection agency, or a payment on or dispute about the account by the consumer -- changes the allowable period for a CRA to report a charge off.

    3. Since Sections 623(a)(5) and 605(c)(1) provide new rules for calculating the 7-year period that became effective in 1997, do charge off accounts now have different obsolescence periods depending on when the charge off occurred?

    Yes. Section 605(c)(2) states that the section "shall apply only to items of information added to the (CRA) file of a consumer on or after" 455 days after enactment, or December 29, 1997. Therefore, a charge off reported to a CRA on or after that date is subject to the new commencement-of-the-delinquency method of calculating the obsolescence period set forth in Sections 623(a)(5) and 605(c)(1).

    (Heres where it applies to you Roni)
    On the other hand, a charge off reported to a CRA before December 29, 1997, is not covered by the new provisions, as discussed in (Kosmerl, 06/04/99).

    If a credit account was reported as a charge off before 1997, the Commission's view has been that it can be reported for seven years from the date the creditor actually charged it off.

    What that means is that rather then reporting it for 7 years plus 180 days under the ammended FCRA it is simply reported from the actual date of charge off. Even if you pay a debt that was charged off prior to 1997, that does not permit the creditor to report it for 7 years from the date you last paid. That has never been the case.

    Many people confuse what the original FCRA meant in terms of "Reporting time" Even before 1996 the account was supose to still only be reported for 7 years from date charged off but there was no provision that protected you from additional actions extending that time. That is why the NEW FCRA made it painfully clear to CRA & creditors that one date must apply.

    If the creditor attempts to extend the reporting time on an already charged off debt because you made a payment a few years later, just refer them to Clarke W. Brinckerhoff Attorney-202-326-3224 who writes the opinion letters on this issue for the FTC. He specifically states that debts charged off before 1997 should be reported for 7 years from actual charge off date and no extending of that time is permitted.

    There may be some critics that disagree but I personally wrote to the FTC and asked this same question and got the answer I am giving you now.

    As always, not legal advice, just my opinion!
    Kristi
     
  13. sam

    sam Well-Known Member

    RE: Relevant Advice

    All of my debts are also in the same range (sorry guys im old :)

    I just remember being told about the old rule, i'm not going to charge off anything new.

    Here's another question. MidLand (Associates collections) Put an Collection account on my report, with an O5 (90+) this year. Since I have never paid them, and date of last activity is in '95 DOES that mean it will still drop. Looks like they are trying to lay a 7 year turd on my report. Equifax "VERIFIED" the collection positive.

    bleh.

    thanks
     
  14. Kristi

    Kristi Guest

    RE: I wil; save you the troub

    Thanks Mom!
    That would have been very long to type again. I had forgotten that I replied earlier so thanks for looking up that thread.



    Momof3 wrote:
    -------------------------------
    This was your reply when Roni was concerned about his very issue:

    Regarding the dates of before and after 1997

    Please read this in full to understand it. The problem with most of these issues is that people skim over it and miss critical points.

    Because the commencement of the seven year period is now described with some precision by the statute, it is our opinion that none of the subsequent events you listed -- sale of the charged off account by the creditor to another creditor or collection agency, or a payment on or dispute about the account by the consumer -- changes the allowable period for a CRA to report a charge off.

    3. Since Sections 623(a)(5) and 605(c)(1) provide new rules for calculating the 7-year period that became effective in 1997, do charge off accounts now have different obsolescence periods depending on when the charge off occurred?

    Yes. Section 605(c)(2) states that the section "shall apply only to items of information added to the (CRA) file of a....
     
  15. Momof3

    Momof3 Well-Known Member

    yes found it after I asked

    I just wanted to explain what I was talking about and that pretty much sums it up. i just wanted everyone to be aware of their rights you know.

    mom
     
  16. Killer

    Killer Guest

    RE: I wil; save you the troub

    Ok Mom will now re-state all that in English!LOL...I have 2 small uncollectable debts I wish to pay. I want to pay them for 2 reasons: 1) Chase and Citibank says if they are zero I can have a card 2) I think I can get a loan from my credit union to pay a large collectable debt if the uncollectable debts are zero. The small debts were charged off in 1996 and are due for deletion in 2002.

    Here are my questions:

    Will paying in full vs settlement make a difference?

    Will paying in full or settling re-start the 7 year clock for deletion?
     
  17. Killer

    Killer Guest

    RE: I wil; save you the troub

    Oh I meant to say that I plan to dispute the debts once I pay in full or settle, hoping the creditors will not respond. Will it be better to have paid in full in hopes of no response from the creditor?
     
  18. Momof3

    Momof3 Well-Known Member

    KRISTI am I explaining this r

    Will paying in full vs settlement make a difference?

    Not quite sure of that, I would say that if you agree to settle for an amount other than the total, have them agree in WRITING prior to paying to mark this PAID IN FULL or you can shoot for the deletion possibly.

    Will paying in full or settling re-start the 7 year clock for deletion?

    Now as far as I have been told and with the article that Kristi posted, I would say if these chargeoffs happen prior to 97, which they did in this case, then the 7 year clock would began with the day of the charge off and not restart with payment, atleast that is how I read and understood it to be. But I hope Kristi will reply and maybe explain this better??

    Killer I just want you to be absolutely sure about this before you do anything that would possibly risk that clock restarting.

    Waiting for Kristi's reply.

    Mom
     
  19. Kristi

    Kristi Guest

    RE: KRISTI am I explaining th

    As long as the rating is improved it does not matter whether you pay it in full or not. If a creditor will list it as "Paid in full' with previous delinquency removed then paid in full is great. If not, settled for less with no previous delinquency is your next best bet. Paid in full will mean ziltch if the rating remains negative.

    Momof3 wrote:
    -------------------------------
    Will paying in full vs settlement make a difference?

    Not quite sure of that, I would say that if you agree to settle for an amount other than the total, have them agree in WRITING prior to paying to mark this PAID IN FULL or you can shoot for the deletion possibly.

    Will paying in full or settling re-start the 7 year clock for deletion?

    Now as far as I have been told and with the article that Kristi posted, I would say if these chargeoffs happen prior to 97, which they did in this case, then the 7 year clock would began with the day of the charge off and not restart with payment, atleast that is how I read and understood it to be. But I hope Kristi will reply and maybe explain this better??

    Killer I just want you to be absolutely sure about this before you do anything that would possibly risk that clock restarting.

    Waiting for Kristi's reply.

    Mom
     
  20. Killer

    Killer Guest

    RE: KRISTI am I explaining th

    OK..so paying these will not re-start clock! So I am going to pay them. Since they are small, I will pay in full. I will try and get a written agreement for total deletion. If not I will try for a change to R1 status or O1 whichever is applicable. Wish me luck!
     

Share This Page