Question paying a collection/charged-off acount - Cap 1

[CreditCuriosity]

So I finally am going to tackle one of the last demons in my bad credit profile, but have a few questions as I go into the adventure..

This is a Capital One Charge off / Collection in the Amt of $6300..Original amount was around 4500ish I believe 6300 is with penalities/interest..  They are willing to settle for around 3800.. I reached out to them today as I had a ceast and desist on this for over a year.

I have questions regarding how this will impact my score and other things going forwards.

DOLA showing on my reports is Nov 2011.

Cap1 still own this debt, unfortunetly it was never sold for whatever reason.  This debt reports on a monthly basis as a Charge-off/Collection under accounts still, not under collections section of Fico, not sure how they do that, but maybe someone can enlighten me on this..  Here are the questions..

1) Ok my questions, since this is reporting on a monthly basis I assume paying this off will not impact my score in a negative way whether I do it in one lump month payment or over a payment plan of say 6 months?  Since it is reporting monthy already, is this a correct assumption it will only help me score as it ages and eventually stops reports?

2) It will show as Payed for Less on the credit report, this should make no difference score wise correct, other then possibly a manual review of future creditors?

3) Will this still fall off after 7.5 from the Nov 2011 DOLA or if I pay it or do a payment plan does it restart the 7.5 year clock?

I Just want to get this past me as I have disputed off most of my other old baddies and such and working on the biggest and badest of them now.. Thank gosh they are only hitting EQ/EX and not TU or you wouldnt see alot of the cards in my signature. 

Thank you for all the advise of the knowledgeable people within this section. on my 3 questions.

Please see the screen shots of how it is reporting.

 

[gdale6]

---

@CreditCuriousity wrote:

So I finally am going to tackle one of the last demons in my bad credit profile, but have a few questions as I go into the adventure..

This is a Capital One Charge off / Collection in the Amt of $6300..Original amount was around 4500ish I believe 6300 is with penalities/interest..  They are willing to settle for around 3800.. I reached out to them today as I had a ceast and desist on this for over a year.

I have questions regarding how this will impact my score and other things going forwards.

DOLA showing on my reports is Nov 2011.

Cap1 still own this debt, unfortunetly it was never sold for whatever reason.  This debt reports on a monthly basis as a Charge-off/Collection under accounts still, not under collections section of Fico, not sure how they do that, but maybe someone can enlighten me on this..  Here are the questions..

1) Ok my questions, since this is reporting on a monthly basis I assume paying this off will not impact my score in a negative way whether I do it in one lump month payment or over a payment plan of say 6 months?  Since it is reporting monthy already, is this a correct assumption it will only help me score as it ages and eventually stops reports? You are right paying it off will not do further damage since its updating every month now. It needs to stop updating for your Fico to begin to recover so the sooner you can get it settled the better it is for you.

2) It will show as Payed for Less on the credit report, this should make no difference score wise correct, other then possibly a manual review of future creditors? Fico doesnt care if its PIF or settled for less the fact that its a CO is what Fico is looking at. A computer wont care either only a human UW may question you on it.

3) Will this still fall off after 7.5 from the Nov 2011 DOLA or if I pay it or do a payment plan does it restart the 7.5 year clock? The DOLA has no bearing on time an item can remain on file. The max term is 7.5 yrs from the accounts DoFD. This is the 30 day late that immediately preceeds the CO. It is a set in stone date and can never be changed legally.

I Just want to get this past me as I have disputed off most of my other old baddies and such and working on the biggest and badest of them now.. Thank gosh they are only hitting EQ/EX and not TU or you wouldnt see alot of the cards in my signature. 

Thank you for all the advise of the knowledgeable people within this section. on my 3 questions.

Please see the screen shots of how it is reporting.

 

---

[CreditCuriosity]

Thank you GDALE... You made me feel alot better about the call I made today to settle this debt...  It is a big portion of money and wanted to make sure I was doing the right thing/approach and you assured me of this..  Will not be fun to pay back, but I take responsability for my past and this is the nastiest of them.. Just hoping they don't try to reinsert it on my TU when it is payed off .. Doubt that will happen since TU removed it quite awhile ago during the dispute process..   I thought I knew the answers and I did, but you made sure my thinking was correct and for that I am happy!

If anyone else has anything to add, please do so as well!

Eventually after it is paid off I am going to GW the EO to death regardless this.. As you can see I still have around 9k of Cap1 products that they continue to provide me credit with, that is only partially why I decided to pay this debt off.  I think they would of done a judgement on me eventually, but one can never know this and they are willing to work with me on a payment plan if I so choose to do that or just take a byte and pay the 3800 settlement in one chunk.. I told them I would get back to them within 30 days with how I want to tackle it, but wanted to know how much they would settle for and my options of payment.

I was quite suprised how nice their internal collection team was and wanting to work with the person being me in this case... Much different than a JDB.

[RobertEG]

A statement that it is a Charge off / Collection is a general statement that one or the other has occured.

It means that the creditor is required to report the DOFD to the CRA within 90 days after reporting of either their having taken a charge-off or referred for collection.

That DOFD, and that DOFD alone, sets the begin date of the 7 years plus 180 days maximum credit report exclusion period for the charge-off  or for any colleciton that might also or later be reported.

While the posted data from the credit report does not explicity show the DOFD, it is apparently April/May 2013 based on a review of the payment history profile.

Thus, the exclusion date for the CO and any reported collectin would be no later than approx the third quarter of 2020.

If you settle the debt and thus pay less than the full amount, the creditor may elect to report paid/settled for less to your credti file, which, while not affecting your scoring, looks bad in a manual review.  You can, as part of your settlement offer, request their agreement not to report settled for less, thus making it appear in your credit report the same as if you had paid in full.

The perild with a payment plan is that if you should default on its terms, it will most likely reset the SOL on their ability to sue.

You should be sure that you can live up to any payment plan.

Keep in ind that, while they have not yet reported a collection or sale of the debt, they could do so at any time, which opens the ability of a collection to be added to your credit report.

[CreditCuriosity]

---

@RobertEG wrote:

A statement that it is a Charge off / Collection is a general statement that one or the other has occured.

It means that the creditor is required to report the DOFD to the CRA within 90 days after reporting of either their having taken a charge-off or referred for collection.

That DOFD, and that DOFD alone, sets the begin date of the 7 years plus 180 days maximum credit report exclusion period for the charge-off  or for any colleciton that might also or later be reported.

While the posted data from the credit report does not explicity show the DOFD, it is apparently April/May 2013 based on a review of the payment history profile.

Thus, the exclusion date for the CO and any reported collectin would be no later than approx the third quarter of 2020.

If you settle the debt and thus pay less than the full amount, the creditor may elect to report paid/settled for less to your credti file, which, while not affecting your scoring, looks bad in a manual review.  You can, as part of your settlement offer, request their agreement not to report settled for less, thus making it appear in your credit report the same as if you had paid in full.

The perild with a payment plan is that if you should default on its terms, it will most likely reset the SOL on their ability to sue.

You should be sure that you can live up to any payment plan.

Keep in ind that, while they have not yet reported a collection or sale of the debt, they could do so at any time, which opens the ability of a collection to be added to your credit report.

---

I appreciate the additional info as well.. I highly doubt they will sell it at this point as I paid a $25 goodwill gester payment tonight to keep it with them and to buy me 30 days... Yes this could come back and byte me in the butt possibly ressetting the SOL's if I defauly upon our agreement, but that will not happen as I am considering paying it within the next 30 days for 3800ish as mentioned above.. I prefer to just get it out of the way vs. a payment plan although it will hurt the ole checking/savings account.

Interesting never knew I could ask them to report paid in full, guess it doesn't hurt but I will surely ask them to report this way, but by no means are they obligated to I would assume..  Hoping as stated to GW the EO since I have other long standing accounts with them in good terms, maybe my positive history currently with them will get them to remove it early, one can only wish/hope.

Btw I think from another report I saw DOFD was sometime around May 2012 if I am not mistaken so sometime into 2019 I would assume...  

[CreditCuriosity]

So settled with them last week well technically this week, but ya you get the picture.. It hurt, but behind me..

 

[Rebuilding69]

Grats

Sounds like money well spent.

[Rebuilding69]

Forgot to ask, what did they update the status to? Paid/Paid in full, or Settled for less?

[CreditCuriosity]

It will show for settled than less ... Reallly only impact me possibly on annual review and as you can see from my signature I have pretty good cards as it stands now, so don't foresee alot of trouble obtaining future credit.. It was just a 10k giant remaining above me head report to two of the bureaus each and every month and a threat of a possible judgement that would of hit me.. It is off and not impacting utiilization anymore either which is nice as it was never sent to a CA and Cap1 owned it so it impacted utilization at 6300 a month, so not having that show anymore will be easier keeping below <10% util , although I managed to do that anyways.

It was a win-win for both Capital one and myself.. Glad to have it behind me!  It will take 22 days from the 3rd for the to report it to the CB's being the two to show it paid 0 balance and paid for less...  It will fall off in time, but will be GW'ing the heck out of them.. Actually just pc'ed my Venture one in my signature to another QS as the rewards outweigh it today as well..  

[CreditCuriosity]

BTW.. Suprised it showed up on my Experian already as paid... My score took a 20 point jump, didn't expect that at all.. So sitting at around 698 Experian..  Nice unexpected suprise instantly.