Baddies about to fall off recvd settlement offer

[cardionrs]

Needed advice. I'm in the process of rebuilding my credit and need some advice. The only baddies I have on my credit report are: a bk from 2005 due to fall off in 2015 and a old HSBC account that's current brought by Lnvn Funding.

Iv been applying for credit and got approved for BofA secured card, jcrew, and express next. Just received the card this week and its already showing up on my credit watch alerts with credit limits. I haven't used it yet. So, today I get a letter from Northland Group Inc for the old HSBC debt with an offer to settle for less than half of the balance due. This debt is due to drop off my credit report aug 2014.

I know if I pay it will start a new cycle, adding another 7 years of negative marks on my credit... so not sure how to approach this.

[guiness56]

Paying that debt will not start the 7 year reporting over.  It will still be removed based on the original creditors DoFD.

I would negotiate a PFD with them.

[RobertEG]

+1

I would not look at it as the "debt falling off."

I would look at it as the inability of others to become aware of the unpaid, delinquent debt by simply pulling your credit report and seeing an active collection on the debt.

When the collection becomes excluded after 7 years plus 180 days from the reported DOFD on the OC account, the collection can no longer appear in credit reports pulled by others.  However, the debt remains unpaid.  While the collection was still included in your credit report, and showing the debt as still beiing under collection, the stats of the debt as unpaid is readily apparent.  Exclusion of the collection shields it, but does not discharge it.

There are several ways that a future creditor can still become aware of the unpaid debt, such as a manual review of your CR, and seeing no indication therein that the debt was ever reported as paid, or by simply asking in their standard app process for a listing of any unpaid, delinquent debt.  That is a reason why debt collectors still pursue unpaid collections, even after CR exclusion.

Satisfaction of unpaid, delinquent debt after CR exclusion of prior adverse items, such as a reported collection on the debt, is still of potential benefit.

The fact that the debt collector no longer has their collection showing in your CR, and that the debt may also be outsider SOL,  may be incentive for them to settle for a much lower amount, and thus clear any potential future damage from having an unpaid, delinquent debt.