Critique My Plan to Pay Judgment?

[Anonymous]

First things first, thanks to this forum I have raised my scores over 100 points in the last few years and have been reaping credit card rewards and have decent credit for the first time in my life. So, thank you! I completely wrecked my credit reports after college when I fell behind on student loans and it has taken me a long time to get things back on track. I have one big baddie left on my reports and would love some feedback on my plan to correct it. 

I owe ~6k to a university in Oklahoma. It is listed as a civil claim judgment filed in 2013. It is on my report until 2020. There is a collection agency, National Credit Mangement, out of St. Louis that calls me every few months regarding this judgment. (I have not had contact with them besides seeing their number pop up and googling who they are. They are not on my credit report anywhere either.) I will not be able to get this vacated to my knowledge. I now live on the east coast and have cash available to pay the full balance. If possible, I would like to negotiate a lower amount. My plan is to call the courthouse to confirm the total amount then call the school to negotiate a lump payment. I would like to ask to pay 4k to settle it. I do not want to call the collection agency unless the school refuses to accept any payment and refers me to them. Here are my questions and concerns:

• Is it possible that the amount has increased since 2013? I have 6k, no more, to pay this off. This is the thought that keeps me up at night the most.
• In the case of judgments, is it likely the school still owns the debt or was it sold to the collection agency? Only the state of Oklahoma is listed on the judgmenet as the plantiff on my report
• Is attempting to negotiate a lower payoff a bad idea? 
• My cash is currently in an online savings account. How can I prep it for payment? Should I plan on using a cashier's check? Autodraft? What is safest for me?

I want to get this taken care of this month. Although I know that letters/emails or any sort of paper trail is ideal I don't want to draw the process out any more than it needs to be. The last date I pulled my free reports was in March, 2016. The judgment details have never changed in the last two years I've been watching my reports. My credit karma and other free monitoring sites have not updated this account at any point in the past. Is there anything I am missing? What would you do differently?

Thanks in advance! 

[RobertEG]

The court, in its judgment, usually posts the amount of the principal balance awarded, and also permits the accrual of interest.

The court does not modify/update the posted public record to track the current debt balance (principal award plus interest accured after the judgment).

It is not likely that the court will provide you an updated accounting of the total current debt.  That is left to the parties to determine based on the terms of the judgment.

The judgment credtior may or may not still be the owner.  If/when you begin settlement negotiations, they will inform you of the current owner.

Negotiating a lower settlement will certainly benefit your wallet.

There are, however, two factors to keep in mind.

First, if you settle for less, the judgment creditor has the right to report that fact to the CRA by a special modifier comment of "paid/settled for less," or words to that effect.

That is always a potentially negative comment in any manual review, as it advised others that you have a past history of not paying the full debt that you accrue, and thus lending to you may result in a net loss.

As part of any settlement negotiation, you can attempt to gain their agreement not to report any comment relating to paid/settled for less, thus making your credit report appear the same as if you had paid in full.

Second, the difference between the full amount of the debt and the settlement amount is considered by the IRS to become "income" to the consumer, and may be taxable if it is $600 or more.  If you were insolvent at time of payment, you may qualify for an IRS exemption from income, but you will have to make that showing to the IRS to avoid taxation of the difference.