Susanna, This is my opinion on this AND PLEASE take this as JUST my opinion....I am certainly NOT an expert here!!! You have 3 choices and all 3 have different possible outcomes. 1) Let it charge off. Then, you will most likely end up with a judgment. This will cause you much more problems than you have now. 2) Take the settlement. You will have a pretty significant ding to your report. Also, you COULD get stuck paying taxes on the 60% that you did not pay on. This could be considered income for you. 3) Pay 24 months at 0% interest to get the account in better standing. You could end up with a paying as agreed status with a 2 year old 150 day late. Looking over it, it really seems that option 3 is your best option here. I know you are worried about defaulting on the agreement and being back at square one, but if you could borrow the $$ from MIL to pay the settlement, would you be able to borrow on a monthly basis as needed if you could not make this payment? At 0% interest, I don't see that you have a lot to lose taking this route. I also think it is your best option to try to come out of this with a better rating. The 150 day late will lose its impact before a judgment will!!! Good luck!!!
Someone made a reference to a "Full Deletion." What is that exactly? Does the CA have the ability to do that or does it have to come from the OC? If an OC reported a Coll. to the 3 CRA's can they just have the negative mark taken completely off the CR as if it (and the account) never existed?
But from the sound of it(please correct me if I am wrong) you can't take advantage of either? Just seems that the payments are easier than the a lump sum.
Javan, I can borrow money from MIL for a lump sum settlement. Could probably borrow for monthly payments as well until I get new clients or a job. My credit is ruined either way... I have an AMEX chargeoff which gives me an R9 rating for 7 years. So, the question is do I want to be rid of MBNA totally, or do I want to rehab credit with them...
Thank you, Gillian. You have helped me a great deal. Tonight I am making the decision so that I can get this taken care of tomorrow. I will feel better once this is over and I can get back to my life and my kids' problems
Thank you, Javan. And thanks for all your help, too. I feel like I've been a pest here, but it's the indecision and fear that drives all the angst. Everyone who has responded has been really great. Hope I can return the favor sometime...
I'm CONFUSED...I can't get MBNA to give me a rate lower than 11.99% on my QUANTUM...and they WON'T give me a BT for much more than a couple of months... You get 0.00% for 2 years???
George, I am sure that MBNA would like to get ALL their money paid back on such a large sum of money owed, which is why they are extending this offer...and if I'm late on just one little payment, guess what? The interest rate goes back to 24%...When you don't have a job and have to borrow money to make the payments every month, this deal of paying back 20K over 2 years feels like an enormous weight. You need to step out of your shoes for a moment and see it from another's point of view...
Have you made your decision? Have you replied to their offer? I think I remember you saying you were gonna make the decision today.
BE strong and BE confident! I congratulate you on your integrity. The fact that you are dealing with this head-on and not running away(ie: BK) has earned my respect!
I need some clarification on one point -- I've read here that after 24 months, your credit report recovers from "baddies" -- even though the negatives may stay on the CR for 7 years. Is a "settled" notation better than a chargeoff? Or, will that hurt the same? (I know that doing the payoff with a 150-day late is the best option for CR...but I already have an R9 due to Amex chargeoff). I HAVE made a decision, just last minute details...
Also, one more question... Does anyone know if a "settled" account with a zero balance stays in the negative section of the CR. If so, for how long?
My settled Discover account is shown as Paid in Settlement/Never Late with a $0 balance. It appears in the positive section of my Experian report (it was deleted from all the other reports). However, i believe it is still viewed negatively by lenders.
Yes although it was a little strange. I had disputed the items with TU and EQF and they came back verified. During the second round of disputing, Discover sent them a update to change the notation from R5 to R1. Both CRAs opted to remove the listing alltogether. BTW, my paid chargeoff from ATT Univ appears in the negative section of my report.
mmm, interesting. Do I understand that there's some worth strategy here? You settle with a creditor, you dispute it right away, and hopefully, they will not respond to the dispute because they have their money, and so the account is deleted(?) IS that what you did?
Gee, I can't believe this. I am being told that once I "settle" my account for 40% they will change my rating from an R5 to an R9!! And, your telling me that Discover changed your rating from an R5 to an R1. You are one lucky man! Too bad I'm not dealing with Discover. Nice guys over there...
