I am in the process of negotiating a settlement with FirstSource for an FIA credit card account. The account has been charged off and sold to FirstSource. The amount owed including fees etc is $20,866.56 and the settlement amount is $7,000. I want to make sure everything is correct in the settlement letter so the OC or another CA doesn't come after me later for more money. Also, what should I expect to be updated on my credit report by the CA and the OC? Thanks for any help! The letter reads as follows: We are writing to you regarding your FIA Card Services, NA Account. In our telephone conversation today, you requested that our office fax you written confirmation of your agreement to settle the above accouont. This letter, therefore, confirms that, as settlement, you have agreed to make six payments to this office in the total amount of $7,000, with the following amounts and due dates for each respective payment: Payment Due Date $1166.67 12/30/09 $1166.67 1/30/10 $1166.67 2/30/10 $1166.67 3/30/10 $1166.67 4/30/10 $1166.67 5/30/10 Upon receipt and clearance of your payments as agreed, we will notify our client to update its records accordingly regarding this settlement. If you you have any questions, please do not hesitate to contact our office at xxx-xxx-xxxx. Make your check or money order payable to Firstsource Advantage, LLC. Payments only should be sent to our mailing address: PO Box XXX This is a communication from a debt collector. This is an attempt to collect a debt and any information obtained will be used for that purpose. Sincerely, First Advantage, LLC A Professional Debt Revoer Agency
Looks good to me. That is a great settlement amount! Way to go! Did you ask them by chance if they will remove the negative lines from your CR?
This was actually their first offer - I was thinking about asking for more. Does this letter cover me with both the CA and OC? In other words, if I agree to this, does anyone else have a right to come after me for the remainder of the balance? They said they were going to update my Credit Report with the line "Settled in Full" I was going to ask for "Paid as Agreed" does it really make much difference or do you have any suggestions? Thanks!
I would ask for a non-disclosure clause. Both parties agree not to disclose this agreement or the details therein with any third party. Then after you've paid them, you dispute the collection entry in your credit report and it should come off as they've agreed not to disclose this information with anyone (so they can't confirm the dispute). If they do confirm the entry, then you can sue them for a breach of contract. It can't hurt to ask. What can they say, "no?"
The NDA (non-disclosure agreement) does sound interesting. This will re-age your credit line to the last date of activity so the 7 year fall-off date clock will restart. Some of the senior members should have a way to get around this but my experience has been a charge-off shown as paid is still a R-9 only now the balance is zero. Never saw that a zero R-9 ever helped over an R-9 with a balance. Just my experience of course. Congrats on a great number.
So you have it in writing that they will update your credit reports if you pay them? That is a rich one indeed! My settlement letter would be an intent to sue letter accompanied by a ready to file federal complaint charging them with violating the Credit Repair Organizations Act and an offer of settlement in the full amount of the debt. If they didn't want to agree to that within 15 days I'd file the case and see how fast they wanted to agree to the settlement. I'd also want a strict non-disclosure clause in the settlement agreement as suggested by another poster. Then I would do just what you have already been advised to do. I'd dispute it with the credit bureaus and if they respond to the dispute I'd sue them again for breach of the settlement contract. If necessary I'd sue them everytime they turned around but not to worry because they would be highly unlikely to make the same mistake twice in a row. A friend of mine just settled a federal case against FIA card services and I have a recording of his calling me and telling me about the settlement he made with them. Regetfully, he settled for such a small amount that it might not even cover all his expenses when it is all said and done but that is his problem. He said he just got tired of squabbling with them but the truth of the matter is that he had them over a big barrel and could have administered a real whipping if he hadn't given up.
I would just like to say THANKS! for the great information you all have provided. I will certainly be following this forum as I work through these credit problems.
Not sure if it was mentioned you should have the "Original " credit card number on the letter from them. FIA also has a habit of changing card numbers some make sure that all the numbers reference the same account on your report. Great settlement,
Two things to consider here. First of all, this will NOT reage the reporting period (not legally, anyway). The seven year period is based on the date of the delinquency, not the date of the payment. The more serious consideration, however, is that you may receive a 1099 for the forgiven amount and will have to pay taxes on it. You need to prepare for that. You also need to verify what "update their records accordingly" actually means. Does it mean that the debt is settled in full, or can another CA come after the balance after the OC updates records to show that you've paid $7K.
