PFD = New SOL?

[Anonymous]

I have an credit card collection item (only thing left) for $750 that is due to fall off of my credit report Jan 2012. If I send them a PFD letter for a settlement of $400, does that restart the SOL clock?

[bruiseviolet]

I don't know- but from my past experience- collection agencies are so "money hungry" they will take almost anything within reason that you offer to settle for- just to get the money from you and be done.  It usually works really well- even though I don't think it's 'promoted' around these parts. LOL

My advice-  make sure you get it in writing that they will delete and also what the settlement amount is-  and when you pay send them a money order-  DO NOT send them anything with your account numbers- don't send a check and do not do a check of credit card / debit card over phone.  I made that mistake with the first one I did- and the next week- they took out over $300 from my checking account.  Obviously it was unauthorized and they had to refund it- but it was still a hassle and i ended up paying $30 to put a stop payment on my account- just in case they tried to do it again.  It was such a hassle.  Never made that mistake again!

[rckstrscott]

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@bruiseviolet wrote:

I don't know- but from my past experience- collection agencies are so "money hungry" they will take almost anything within reason that you offer to settle for- just to get the money from you and be done.  It usually works really well- even though I don't think it's 'promoted' around these parts. LOL

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I think it is a pretty accepted practice to send PFD letters on this forum, in fact, most people advise that is the best way to handle a collection account. I will say this, not every collection company is as money hungry as you make it seem. PFD is still fairly hard to achieve. Sounds like you have had success in the past, and that is good, but I don't know how wise it is to build up the expectation that it will just go away if you toss money at it.

If you pay it, PFD or not, from my understanding it will not reset the reporting limit, meaning it will still fall off at the time is supposed to. If you PFD, and have success, it will be removed. If you just paid, and the balance is updated to PAID, it will fall off when the reporting period is up.

SOL doesn't apply to credit reporting, that only relates to the law and how long they can legally come after you in court. I assumed you meant the 7 1/2 year credit reporting window.

[Anonymous]

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@Anonymous wrote:
I have an credit card collection item (only thing left) for $750 that is due to fall off of my credit report Jan 2012. If I send them a PFD letter for a settlement of $400, does that restart the SOL clock?

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Each state is different and In a few states it could restart the SOL.  Word your PFD so it reads that you are offering to pay without acknowledgement of the debt.

[Anonymous]

I checked state law for both MS and NC since I moved and each states SOL runs out after 3 years. I just didn't want to send a PFD letter and then they say ... not no, but HELL NO ... and next thing I know I'm being sued for the full amount plus some. I just want to cover my butt. I think I'll go with the PFD letter, but not acknowledge the debt .... I'm still a little shaky on it though because I see that as a "If it's not yours, why did you pay it" question at my hearing. lol .... I'm looking to buy a house in a few weeks and I'm sure during underwriting it'll be looked at and questioned and probably have to be paid before closing. I just didn't really want to come out of pocket for the full amount for something that was so close to falling off of my credit report.

[bruiseviolet]

PFD means that you will pay them the money owed- and that they have to remove it from your credit report.  Because on a credit report a collection is a collection no matter if it's paid or not-  so it won't effect your score just to pay it.  That's why so many do PFD- because they get the balance paid and they have it removed from their credit report right away- which increases their score because it's one less collection account appearing.