First Premier Settlement Offer

[MrsCHX]

I'm thinking this is a hard no but thought I'd ask anyway.

I have a charge off from June 2014 (so no where near deletion). It's $392 and I'd sent them a PFD which I guess they said no. LOL!

They are offering to "settle" the balance (unsure of the settlement amount) by opening a new account.

Bad: The old account will show as "settled", the clock restarts, it's First Premier :/

Good: 0% APR for 12 months, their ridiculous $84 AF is waived for 12 months, it'll show as settled (I know this doesn't affect cs but for future lenders would it make a difference?)

[Creditplz]

I'd just pay the full amount and avoid FPB all together personally.

[Anonymous]

Try for removal.  You might have to pay the full balance, but if they're willing to remove it's worth it in the long run.  Also, get it in writing before you pay, either an email or snail mail.  CO's are notorius for loosing track on paid debts (either intentionally or unintentionally).

[Chris679]

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@MrsCHX wrote:

I'm thinking this is a hard no but thought I'd ask anyway.

I have a charge off from June 2014 (so no where near deletion). It's $392 and I'd sent them a PFD which I guess they said no. LOL!

They are offering to "settle" the balance (unsure of the settlement amount) by opening a new account.

Bad: The old account will show as "settled", the clock restarts, it's First Premier :/

Good: 0% APR for 12 months, their ridiculous $84 AF is waived for 12 months, it'll show as settled (I know this doesn't affect cs but for future lenders would it make a difference?)

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The clock will not restart no matter what you do.  If you settle you will have to claim the difference on your taxes FYI.  I'm sure they will settle w/o you having to open their crappy card if you don't want to pay the full amount.  If you can settle for 50% or so it would be worth it to me but the best I could do years ago was 2/3 the full amount and in your case it would just pay the whole thing. 

[MrsCHX]

Thanks everyone. That's what I was thinking; not worth their horrible card and horrible service.

I will offer a settlement. Since the full balance is only $392; I'm not worried about any taxable difference. If they won't settle i'll just plan on paying it off.

[RobertEG]

The next bes tthing to a PFD is obtaining a settlement along with their agreement not to report any comment referencing the settlement.

If you settle, the reporting of a special comment referencing that it was settled for less is optional on their part.

If they agree to settle and not to report any special comment related to settled, it will then appear in your credit report the same as if you had paid in full.

Thus, I would give a shot at obtaining a settlement with the agreement that they not report settled for less.

You will not incur a tax obllgation with IRS.

The amount of the reduction must be $600 or more before there is an issue of possible tax obligation on fhe settlement.

[Anonymous]

Once again, I agree with RobertEG.

You dont owe the IRS unless the creditor issues a 1099c, and the amount 'forgiven' must be above 600.  There are also circumstances where you would not owe tax on the differrence, such as if you were insolvent, but the issue is complicated (at least to me) and I would recommend reading up on it, or contacting a tax pro familiar with it, only if it becomes an issue for you.

I had five accounts that were 'legally settled for less than full' and it has never been an issue for me.  They all were on my reports for the full seven years.  It was never an issue, but I only applied for CCs and an installment loan, no mortgage or auto app, so I doubt that I was under a manual review.

HTH