Please help with unique charge off with original creditor.

[Anonymous]

Hi everyone! I lurk here often and have learned a lot, thank you! I have a unique situation, I have searched but haven't found anything definitive to help me decide how to proceed with getting rid of this debt. I would love input, advice, experiences, etc. Here it is as concisely as possible:

Jan 2007 I needed urgent dental work and was approved through Unicorn Financial for the funds, so I used that. I naively didn't calculate what the monthly payments would be, lol...

I fell behind on payments and eventually was treated so badly by one of their reps that I told him to go F himself and quit paying all together.

Jan 2008 Account charged off

Mar 2008 Unicorn Financial was acquired by Chase Health Advance. My account was reviewed, including audio transcripts of the aforementioned a-hole. I received an apology and was assigned a much nicer account collection guy. I made an agreement with him to make smaller payments, which I did for quite some time.

July 09 - Husband was laid off. I sent a hardship letter and have been making tiny GO payments ever since.

I have a little chunk of money from our tax return and would LOVE to find a way to settle this debt!

The way it reports on my credit reports is Balance: $7528, Amount Past Due: $2544

Can I do a PFD offering a much smaller amount than $7528? I can afford 25-30% of that in one lump sum. What special considerations will I need to know about since I'm technically still working with the original creditor? Or *AM I* even  technically working with the OC since it was an acquisition situation? Are PFDs typically only successful after an account has gone into default? Although this account is totally screwed up, I'm not currently in default due to my monthly GW payments...

If PFD isn't a realistic goal, what's the next best thing? PIF isn't possible for me anytime in the near future, a debt like this would conceivably take me several years to pay in full.

WHAT WOULD YOU DO?

[IOBA]

You can call them up and ask for a settlement.  

Be clear on the amount you can pay.

Be clear on where the money came from (in this case, your tax refund).

Be clear that your husband was laid off and it's not financially feasible to be able to make the payment that was agreed upon.

Be prepared to answer questions about current income and expenses.   They may ask how you are making ends meet.

Something that helped me once -- I told the rep that I had a choice -- to feed my kids or to pay them money.   I told her my kids belly's would win.   (I was asking for a lower interest rate and lower monthly payment after loosing a huge chunk of income.)  It worked.  I mean, it was later approved by a "team".

[RobertEG]

You are technically still in default.  You have unpaid debt for which you did not meet the contracted terms of payment with the OC.

Setting up terms of agreeent for partial payments of the debt means they wont sue you for the full amount as long as you make the agreed payments.

But you are still in arrears of unpaid debt.

A PFD offer is certainly a possibility, but it appears that they now have you under an agreement to pay in installments.

With that agreement in place, in my opinion, especially when viewing the amount of the unpaid debt, their incentive to accept a PFD for less than the full amount of the debt has diminished.  They have a stronger case now should they bring legal action.  Give PFD a shot, but I dont anticipate them biting on the offer.

Option is to continue to make the monthly payments you have agreed to, and wait for the 7 1/2 year period from DOFD to expire, and thus deletion of the CO from your CR.