I recently received a letter from Merrick. The letter offers me the option to pay 20% of the balance on a CO that is almost 3 years old. Since I am able to scrape up that amount, I am interested in accepting the offer. I know I will get a 1099 for the amount forgiven and that is OK. Any thing else I should take into consideration here?? Thanks!
Try it this way Dear Merrick Bank (or Merrick Bank's JDB, or whoever): I am pleased to accept your offer on the following terms: 1. Settlement shall be full and final with respect to account number (XXXX XXXX XXX XXXX)). 2. Due to the doubtful and disputed nature of the balance in question, no form 1099-c shall be issued. 3. Following settlement Merrick Bank shall provide no further updates to any Credit Reporting Agency regarding the debtor's account, even in response to disputes. 4. Funds shall be provided by the accountholder overnight delivery one business day after an authorized representative signs and faxes this settlement agreement to (YYY) YYY-YYYY. Sincerely, For Merrick Bank Jet0911 By:_________________________ Printed name:_____________________ Position:________________________
Perhaps I can add "...your offer of settlement for the amount of $xxx on the following additional terms:"
In the post-bubble economy more mortgages are going to be underwritten using the RMCR or "full factual" report that reaches back longer than 7 years, rather than on FICO score and a tri-merge of the standard consumer report (at least for those loans over $150k). That being the case, consumers should look to settle or otherwise resolve (read: gather FDCPA violations and sue them, resolving the debt as part of the global settlement) their debt situations, regardless of whether they're in-SOL or not or whether they're showing up on the standard CRA reports or not. At least they should operate that way if they're planning to get a mortgage before the go-go days come back (if they ever will).
I am in Minnesota and where the SOL is 6 years. (Debt is 3 years old). Yes, I was surprised to have them make an offer that I am actually able to afford. They offered to take a lump sum of 20% or 36 payments which totaled almost 30%. Seems like a reasonable deal to me since so much of what they write off is the late fees, overlimit fees and high interest.... I am just happy to be able to get this over and done with!
Just make sure that you're settling this in full and that you're not just resetting the SOL clock. Sometimes, JDBs and CAs will bait you into a small payment under some false pretenses only to have you re-age (i.e. restart) the loan agreement under different terms. Or they'll settle with you and then sell the rest to someone else. Understand completely what they are offering, and make sure it's not just what you think their offering. Don't be so happy to see the settlement that you forget to get everything in writing. Remember what happened at Troy with the horse.
