If you don't include it in BK, it remains a collection TL, even though it's paid. That makes two negatives. I'd IIB. You're already filing anyway, right?
I'm not sure it matters for automated systems, a bad TL is a bad TL. When someone is reviewing your CR, it's much easier when all of my bad TLs fall under one umbrella - the BK. I literally went "right through" on my mortgage apps because every bad TL read IIB.
