Old BoA charge off - Texas

[CreditJim]

I've been rebuilding my credit and managed to have my one collection removed and I've had many lates on one credit card removed. The one final remaining baddie is a charged off BoA credit card from 2008. I used a local credit repair firm to help me with these baddies and with the BoA account they requested validation (I'm guessing) from BoA. They eventually replied after 60 days with a copy of a bank statement from Nov 2008 and saying BoA is still collecting on the account (it hasn't been passed to anyone else) and the balance is $848.93. They are saying that they're recommending they make an offer of $200.00 for a paid in full status. I can afford to pay the entire outstanding balance, I'd just rather shoot for a paid for delete, or have the entire account removed. I opened the account in CA in 2007 but have now lived in Texas for the past year and a half. Are there any better recourses I should try to deal with this rather than just having it reported as paid in full? It was charged off in Sept 2008. I'm desperate to have this last final baddie removed so that I have a completely clean report.

[RobertEG]

I dont  know what they sent to the creditor, but debt validation requests under FDCPA 809(b) only apply to debt collectors, so any validation on the part of the OC was totally discretionary.

They apparently used a DV since credit repair organizations are exempted from any assistance in preparing a direct dispute on behalf of a consumer, and thus they could not prepare a direct dispute to challenge the debt.  Kinda makes me question their value at this point.

Regardless, their advice to PIF is not without merit, providing immediate satisfaction of the debt serves your needs aside from any issue of CR deletion.

For example, if about to app for a mortgage, then payment of the delinuent bad debt may be a creditor pre-condition, aside from any FICO score issue.

Additionally, since it has not yet been referred to a third party debt collector, payment may avoid the additional reporting of a collection to your credit file.

It thus depend upon your current needs, and a guesstimate of what the creditor might do.

With a charge-off having been taken in 2008, and the account opened in 2007, the DOFD is most likely in late 2007 or early 2008, giving a normal CR exclusion date of sometime around mid-2015.  You can always make a PFD offer.  They can always refuse, and bring in a debt collector.

[CreditJim]

Robert, thanks for your detailed reply, that helps a lot. Sounds like I may be better off just paying in full at this point. I really wished there was a way I could PFD. I plan on applying for a mortgage in around Jan/Feb 2014 so I have some time to try to take care of this, but was hoping to get a decent boost in my scores which have stagnated with this baddie on there (TU is 664). My CU did say that this card would have to be taken care of before they offered a mortgage.

I'm gussing I may have awoken the sleeping beast in terms of BoA not brining in a debt collector all this time, so it may be prudent to resolved this quickly now. I guess I'll just have to GW, GW, GW to see if I can do what most can't with BoA!

[chasmith]

Congratulations on your progress.

This BOA item is out of SOL, TX SOL is 4 years and you can assert it as a defense once you've been a TX resident for six months.  So they can't sue to collect.

If it was charged off six months after it went delinquent, it should fall off in 2014.  Check the DOFD on file with the CRAs and add 7 years plus six months, that's the latest it can fall off.

In negootiating for a PFD or settlement, use those points, don't mention you have any pressing need.  You could also try for a "non-disclosure" vs. a delete.  A non-disclosure specifically preventing them providing any information to any CRA means they cannot verify if you dispute the item, and the CRA must delete it.

I doubt you'll get a PFD but it's worth a shot.  Otherwise a paid CO or a "Settled for less" CO probably have the same impact and will have aged a year by the beginning of 2014.  So if they won't do a PFD I would try to settle for as little as possible and get it done soon.

[CreditJim]

Thanks chasmith. I really do appreciate people's help on this forum. I just checked and the DOFD was May 2008, so by my calculations the latest it could be reported would be November 2015. It looks like the CO was 11/01/2008. So realistically I'm almost 3 years away from it dropping off.

Being necassary to have it reported as PIF for obtaining a mortgage aside, am I likely to see any change to my scores once tgis is reflected, over the coming year? Or in all likelyhood will it not impact my scores at all. I know I have to sort it anyway, I was just wondering.

[chasmith]

I don't know that it has to show paid in full, I think it needs to show paid or settled so there's no threat you would need to pay it later.

Your score gets you entry to the lending system and affects your rate.  Then manual underwriting will look at the open collection and want you to pay it even if your score otherwise is OK (and the scores you report seem to meet minimum standards but won't get you the best rate).

Some people recommend not paying out of SOL collections because the payment redates the item - not the DOFD but the recency factor.  But once you pay or settle the CO it shouldn't get redated any further (as it sits now BOA can and probly is periodically updating it) and its impact will gradually age off.  A CO is a major derogatory so it will have some effect improving your score in a year but probably won't have fully aged out of impact by the time it falls off in 2015.  So the best outcome is a PFD, otherwise I would settle or pay it soon to start aging its score impact.

[CreditJim]

Thanks - your reply provides me with a very clear understanding of how it works. I just checked and the last time BoA reported it was 11/05/2012 so I think you are right, that is probably why I'm not making any real progress with my scores now that I've sorted the lates and collection. Thanks again.