Help with charge off (judgement) settlement PLEASE

[Goodscore81]

So this car situation that I talked about in previous posts is coming to an end.  The company is suing but I wanted to settle before court.  They are willing to settle for 80% of the debt, but are not willing to delete TL.  It's reporting as a Charge off with a balance and also late payements are showing.  To cause the least amount of damage, what do I need to do?  How should I ask them to report? 

[Shogun]

If you have the funds, pay it now, to keep from getting a judgement entered and having a public record on your CR in addition to the CO.  If you pay it, then they have to report it as paid, $0 owed.  The CO is the derog itself, the lates tacked on to that don't matter.

[fezwhy]

Pay it. A judgment on your report will tank your score. It will also make it difficult to get a house or car. a charge off with no balance will be better.

[RobertEG]

If you settle for less than the full amount of the debt, yes, they must update their account to show paid. However, they can additionally report paid/settled for less. I would recommend offering as a condition for settlement that they agree not to report settled/paid for less. That is a negative comment in any credit report, as it informs others that you did not fully pay prior debt you obligated. The creditor took a loss in dealing with you.

Absent that additional reporting, your CR will then appear the same as if the debt had been paid in full.

As an aside, it is stated that they are not willing to delete the account. I presume that also includes deletion of any derogs reported under the account?

[Goodscore81]

Thank you all for the input....

When I talked to the attorney's office, they could not tell me exactly how it would report-Which is complete BS.  They probably won't delete the lates either.  80% of this debt would be $5400.  That is a lot of money to shell out not knowing what the outcome will be.  If they are not willing to cooperate, do you think I should threaten filing bankruptcy?  Do you think that would persuade them to honor my conditions of payment?

[coterotie]

The bankruptcy threat is one they hear all the time and are relatively immune to it.  Do you have the cash available to make a  lump sum settlement?

If so then you can make them this offer:

I can give you 80% but I will have to make 4 monthly payments of 20% each.  In exchange you will mark the debt Paid in full and delete the collection notice from the bureau when paid.

Or I can pay you 60% today with the above stipulations.

If we can't come to this agreement, we'll have to meet in court where the judge will ask you if we tried to come to an agreement.  I think he will look favorably upon my offer which will mean more time invested by you at the courthouse as we likely come to one of the above agreements. 

Which offer do you guys prefer?  Then shut up.  He who talks first loses.  If they give you a counter, then see how it looks and get them to agree in writing and go on down the road.  Once they get a judgement your options and ability to negotiate move quickly to zero.

[Goodscore81]

The lawsuit has been dropped.  I made payment arrangements to settle the account by the end of the month.  To my knowledge the OC will report Paid/Settlement.   How will this affect my scores?  Will I  see an increase since the debt will be satisfied? 

[coterotie]

You likely won't see much of a score change for a little while.  I would suggest that after you make the payment, wait a little bit and see how it reports if negative.  Then start goodwillling them, reminding them how easy you were to work with etc.  You throw yourself at them making the suggestion that they delete the reporting.  See how it goes.