Collection accounts

[torndollar]

Hi,

I have 2 collection accounts that will fall off next year. Should I pay them or will they stay on my report for 7 more years if I pay them? I am getting some pretty good settlement offers (70% or more) in the mail.

Please help! I am trying to increase my score so I can buy a house next year and I am concerned about these 2 accounts.

Thanks!

[My_dog_FICO]

Torn,

I'm just a newbie here, but from what I've found out is that with any CA, you should first send a DV - Debt Validation letter. Send it CMRRR - Certified Mail, Return Receipt Requested. I sent one today and it cost about $6. The CA then has 30 days to respond (+5 for mail delivery). Note: Do NOT sign the DV. Some bad CA's may use your signature on another form if they are unscrupulous.
If they do validate, and you do owe the debt, send a PFD - Pay For Delete. This is a letter that does not state that you are admitting to the debt, but if you were you would be willing to settle for $X.XX as long as they delete the item from your credit report. Since I'm a newbie, I don't know how well this works - yet. I'm sending a few of these out later this week for DH - Dear Husband.
If they do not validate in 30 +5 days, then you can request that the CRA remove the listing from your credit report. Send in the letters that you sent to the CA and a copy of the RR with a letter stating that the CA could not validate the debt so therefore it is inaccurate data on your report and by FCRA regulations, the CRAs must remove.

In my opinion, if you're getting 70% off on the debt settlement, then the CRA is someone desperate. Either they bought the debt for pennies or something else is amis. You state that the debt will fall off in the next year? If so, chances are the SOL (statute of limitations on the ability to claim a debt) has expired and they do not have a legal claim to the debt. In your initial DV letter, request they also provide the Date of Last Activity (date you last made a payment or the OC - Original Creditor last marked your account as being in good standing). If you search google for your states SOL you should be able to determine if this is a past-SOL debt. If it is, you need to ask someone else here on the board what to do next - I haven't figured that part out yet.

Please take everything I've said here as just a suggestion. By no means should you be taking action based explicitly on what any one member of this forum says. My best advice is to read read read the posts. If you really don't know what to do and don't want to go it alone, look up naca.net for an attorney in your area. Many do not charge initial consultation fees.

[Anonymous]

what is your SOL?

http://www.bankrate.com/brm/news/cc/20040116b2.asp?caret=8

more detailed

http://www.fair-debt-collection.com/SOL-by-State.html#7

If they are already about 6 years old they are not hurting your scores that much. Be SURE of you SOL before doing anything.

IMO if you do not have the money to pay or you do not want to pay, you MUST be past SOL. Then you are save!!!!!!!  just let them fall off CR.

If you want to pay do so with a PFD!!!  you want it off CR.    if past SOL you can PFD at a much lower amount because they can't sue you for any amount!!!!!

[torndollar]

Thanks everyone for the advice. I have another question after going to the links posted. What's a "contract" account and what's an "open" account?

[Anonymous]

Open- open ended like a credit card
Contract- Fixed term and amount (installment and other signed contracts)

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@torndollar wrote:

Thanks everyone for the advice. I have another question after going to the links posted. What's a "contract" account and what's an "open" account?

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