OK, I'm a newbie, so here's one for you all... The SOL is 5 yrs written in my state. My wife has a Installment loan (ComFed) from '97, but started 7 year cycle in 11/99 with no payments since. The bank charged-off the loan and sold it to a law firm (collection agency) that occasionally calls, but we never talk with them. The original loan was for $8k, with $4k charged-off and reporting as "Account charged off/Past due 90 days. $8,227 written off" The last time it was reported to EXP was in 1/02, EQ 10/99, TU-never. In my desire to purchase a house I have done some major credit clean up, including negotiating pay to remove neg TL and sent validation to CAs. But this one is our biggest hurdle in terms of amt and recency. I met with a bank rep last week and they mentioned that I could obtain a new sig loan for $10k (because I currently have a $7k sig loan w/ them showing 2 yrs on time pays) and I could use the funds to pay off the first loan and the charge-off. I did not give info to the bank about the charged-off loan, I just spoke in "hypothetical circumstances". Or, I could just validate, or something else. I would like to save the $4k and not take another hit on my credit with a new $10k loan.... Any suggestions? Mike Playing the game...
CMA: It is my personal policy that you should never incur new debt simply to remedy old debt. That said: I think you should negotiate partial payment for full deletion if you can do this without taking out the loan. If not, I would go the validation route and make them prove that you have an obligation to pay them. The thing about the validation, if the original contract you signed did not stipulate that the debt is repayable to Whatever Co and It's assigns, this firm that bought the debt may not even legally be able to collect. Under these circumstances I really don't think they would be able to validate.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ My policy: Never negotiate for a settlement without first demanding and receiving complete VALIDATION. You can always negotiate later it that fails. LB 59
