Chase account about to CO, should I accept their settlement? And a judgment question

[Anonymous]

I am in Illinois.  I am attempting credit repair and pulled my three CRs.  I have 13 negative tradelines (charge offs, past due, etc).  All but three are over $1000.  Most have a DOFD within the past two years so I am still within the SOL from what I understand.

Two questions I need advice on:

1) I have an $8000 balance on a Chase credit card that has been closed but is days away from being charged off.  I have two years plus of lates on this one (90, 120, 180 days) on this account and one payment October 2010. Nothing since then.  I called yesterday and Chase has verbally offered a settlement offer of $3000 for which they will mark the account Settled.  Knowing this is about to be charged off, does it make sense to take the settlement or let it charge off and negotiate with the CA at some near future point?  I do not have enough to PIF but can get the $3000 to meet the settlement plan.  Chase refuses to pay for delete or even put their offer in writing.  What to do?  They are calling back tomorrow.

2) I have a judgment of $2200 from June 2010 that was paid in full in October 2010. It was for unpaid townhome assessments.  I contacted the court today, and they have confirmed the judgment was satisfied and vacated.  Is there a way to have this removed from my CR since it is paid?

Thanks for any advice.

[llecs]

Welcome to the forums!

1) Whenever you have a CO, the creditor will mark your report late from 30 days on up and will eventually CO it. When that happens, they can still report a balance, increase interest, and continue to report lates every month. At this point, whether they mark it as an unpaid CO or your settle it, the score impact is exactly the same since it is already updating monthly. So, if there's really no difference between now and a month from now, you now have some time to act on it. In fact, if they bring in a CA, that CA will likely be assigned. That CA won't report but would call and bug you. Eventually Chase will sell the debt and that's when the CA can report.

If I had that, I would continue PFDs for a total of 3-4 times. If no was the answer each time, then I'd pay it (or settle) and start GWing later. The sooner you PIF or settle the sooner your score would rebound (because they will continue to add lates monthly). I absolutely would not settle unless I had it in writing, and I'd settle with one payment.

2) Bumping for others.

[Chopbrocoli]

There are some options you can take. It all depends on your situation though. You can ask to see if you can be put on to a hardship program. If possible, see if your account can be re-opened contingent upon payment in full. If you settle directly with Chase, you escape litigation, 3rd party collections, or having your account handled by debt buyers. 

Keep in mind, depending on your financial situation (ie: employment, assets, payment history, etc) as well as the banks current financial performance, Chase may:

a. Assign your account to a 3rd party collection agency (if they have not done so already). If this happens, it is possible that a collection account will be added to yourreport. 

b. Obtain judgement against you: If this happens, you face additional litigation costs and fees that they tack on. As well, you will deal with un-flexible settlement offersfrom the attorney

c. Sell your debt to a debt buyer: If this happens, you will probably have the opportunity to settle for less with the debt buyers. However, you will have anothernegative tradeline with the debt buyer. Keep in mind you can always PFD or GW the debt buyers. 

2) If your judgement has been vacated, then the public record should be deleted off your credit reports.  However, you can always get a letter from the court and forward it to the CRA's in order to delete the public record. 

[Anonymous]

First, thank you for the suggestions so far, but I have some details that I think may help clarify this situation.

-I am working directly with Chase (the OC)

- I've already had late pays reported on this account continuously since April 2010 (except for 3 payments between October and December 2010).  I was in a hardship program already and I messed that up with the non pays.

- I think this is about to charge of, bc of the 6 months of non pays and not following th hardship plan. 

-I don't have the money to PIF right now and will not for a long time

-I requested 2 times for her to put their settlement offer in writing, but was told that they don't even have a letter for that.

Does that change at al what you're suggesting?  What if they still refuse to put it in writing?  What are my options at that point? 

I have 12 other negative tradlines at this moment, but this is the big one.

[Chopbrocoli]

Thats weird. Here is an example of a settlement letter from Chase: http://www.leavedebtbehind.com/debt-2/debt-settlement/chase-sample-debt-settlement-offer-letter/

See if you can get it in writing. As well, counteroffer and see if  you can settle for less than their initial offer. If she refuses to send you a letter, see if you can speak to a floor supervisor or speak to a different representative. Cheers!

[Anonymous]

I just spoke with Chase. 

When the person that I had spoke to/worked with initially again balked at giving me any of the settlement terms/conditions in writing she forwarded me to her supervisor (she had claimed on Tuesday that this kind of letter didn't exist). 

The supervisor let me know that my $3000 settlement (for a $9500 balance) had been approved, but that "their letter was getting revisions" and was unavailable from his office. He told me that my only hope to getting any of this in writing was to contact their legal department and discuss that with an attorney at that office.  He told me (and it was being recorded) that the $3000 settlement would close out the account as a zero balance and "settled" on my CR.  When I attempted to come back wih a lump sum of $2000, instead of 3 payments totalling $3000, he consistently told me that he couldn't change or begin any other settlement offers, since the first had been approved.

I plan on speaking with the legal department tomorrow morning to go over my options.  Any advice on how I should go about this?  Is a $3000 settlement on a $9500 balance good?  Having researched a bit more since Tuesday, I attempted a $2000 lump sum settlement and he told me that this kind of sum could only be approved by legal.

The supervisor also mentioned that the amount that I need to pay to stall the account being charged off is $153.  Is there any reason I should be considering paying this now?  I haven't made a payment since December and I m days from having it be charged off.

[Anonymous]

Bump!  Please help - I am literally waiting for them to call me back!!!

[Chopbrocoli]

Personally I would accept the offer. I honestly don't see Chase screwing screwing you. See if you can ask for them to record the conversation. As well, get the representatives ID # and a confirmation number for the transaction if possible.

[ginger81]

Same thing happened to me with chase, but for far less $.  They wouldn't send me paperwork, etc, and I kind of settled last minute too.  They said they would fax me confirmation of the transaction, but I never got that either.  But it did all work out.

However, what I didn't know was that the $ you saved by settling got added to my "income" for tax purposes, and I received a 1099 form in the mail the next year months after I had already filed taxes and just blew it off.  Just recently I got an IRS letter saying I owe back taxes because of the debt being forgiven.

I'm not sure what kind of tax bracket/situation you have, but getting at 1099 for like $6k would definitely **bleep** up my taxes.  I didn't know any better and of course they don't tell you that, but it would be good to ask about it when you talk to them.

Personally, I would try to avoid it getting CO and just get it taken care of.  I didn't do that with some other cards and it's been a big pain to deal with them now.  You won't have the lates reporting anymore, etc.

[ginger81]

OH, and furthermore, if you settle with them, down the road there is a really good chance you can just get the tradeline deleted after some time passes.  I fired off some emails this week to them and hope it works out.  Good luck!