OK, I had an account with an electric company that went to collections. I was stupid and never responded within the initial 30 days and it just hit my credit report. I have sent a validation letter, and of course it was validated. It is only $244. I have followed up with a PFD and even called and they absolutely will not do it. So, the date of last activity on this is October 2010. I am about to try to get an FHA mortgage in 6 months. Do I leave this thing until time has passed and I might get more leverage, or should I pay it and have them mark the report "paid". I know as soon as I pay it that DOLA will now be 4/2012 and hurt me. What do people do in this case?
Sometimes PFDs just aren't possible. You might also want to look more into utilizing a non-disclosure agreement, as this is something the CA might be open to. The basic concept is you pay the CA on the condition that they not disclose the arrangement to anyone including the CRAs. Then you can dispute the account through the CRAs after paying.
That is not a bad idea. I wonder if I send a cease and desist and basically cut off all possible ways to collect, if they would be willing to actually do something to get their money. I am seriously doubting they will sue me over $244, but I could be wrong.
No, they won't sue over $244. Heck, I had a charged-off cellphone account for $585, and it is now past SOL, more than 3 years ago--and guess what? I haven't been sued. In fact, after the SOL passed, the cellphone company sold the debt to a junk debt buyer (Midland) which periodically sends letters asking for me to settle the debt for 20% off of the inflated total. These letters go straight to my trash can. The only difference is that I am living in a rental apartment, and I have lived here for many years, and plan to continue living here. My credit problems are not an issue, because they do not re-check a tenant's credit report during lease renewal. You, on the other hand, are trying to BUY a house, and with mortgage underwriting standards being very tough, the lender may require that you pay off the debt in order to qualify for the loan. So it may be best to try and settle the debt for a lesser amount, such as 50% with a written agreement up front that this is settlement in full--i.e. you no longer owe anything once the settlement is paid.
BCohen: You don't know how little a specific company will or will not sue for. I've seen companies sue for far less than $244, and companies not sue for 3,000. Whether or not a particular company will or will not sue is dependent on a number of factors. Not just the amount.
