Charge off CC question

[Anonymous]

So my soon to be wife just got an offer from a CA to settle her debt for 60% of the orginial debt.  My question is, should I tell her to attempt to contact the CC first or take advantage of this offer?  Any suggestions would be appreciated.

[RobertEG]

Who you can pay depends on whether the OC still owns the debt, or whether they sold the debt to the debt collector.

Does the OC account report a $0 balance?

If the debt is paid without a PFD agreement, it wont make any difference, since payment of a debt does not, in and of itself, result in any CR deletion.

If the OC still owns the debt, the next thing I would look at is how many deliquencies/derogs were reported by the OC? 

Take, for example, and OC account with reported 30, 60, 90, 120-day lates and a charge-off.  That is five derogs, three of which are major.

The CA is one major derog.

The issue is where will your PFD get the most bang for the buck if you take that path.

[Anonymous]

The amount shown owed to the OC shows a 0 balance, so I am assuming it is worthless to work with them.  What is the chances of the CA doing a PFD for the offer they have submitted to us?  The CA is Global Acceptance Credit Agency.

[RobertEG]

Predicting how a debt collector will view a PFD offer in combination with a settlement offer is impossible to predict.  It is a double request for concession on their part.

Concession one is that any acceptance of either a GW or PFD offer from a consumer is a violation of their credit reporting agreement with the CRAs.  In their credit reporting agreements, they agree not to delete prior credit reporting based on payment of a debt.  It is not illegal for them to do deletions in exchange for or after payment, it is recognized as a distortion of the integrity of the credit reporting system.  Some debt collectors strictly abide by their reporting agreements, while others will overlook it in exchange for $$.

Concession two is that you are asking them to accept less than the debt you legitimately owe.  If the debt is still within SOL, then they have the option of taking legal actilon to attempt to secure the full amount.  Who knows whether they are litigation-prone.  If outside of SOL, then yolu have a defense against any legal action, minimizing the risk of a PFD offer.

[QueenBean]

...as a side note....60% seems really high if they aren't an agent of the OC.  If they bought the bad debt, I'd start at more like 25% if  I were going to go the settlement route.  good Luck

[RobertEG]

I would agree that 60% might be high, providing SOL has expired.

Legal action on their part can ask for 100%