Repossession in 2007 - NEED ADVICE

[esmer0924]

Okay, here is the worse thing on my credit, Any suggestions on how I can fix this.  It was a car I had that got repossessed from me.  There is still a balance $11,938.00 that they say I owed since the car was sold much lower than what I still owed.  I just received a letter from another company asking me to pay and to see if I qualify for a hardship lower payment.  I don't have the letter in front of me at the moment to add more info about it. 

Vehicle Loan Account

American Honda Finance

Status as of Feb, 2008

Date opened Dec, 2006

Date of last activity Sep, 2007

Date closed Dec, 2007

Loan type Automobile

Largest past balance $24,368

Account Type Installment Account

Account holder Joint Account

Scheduled Payment Amount $509

Industry Credit Unions and Finance Companies

Credit Unions and Finance Companies

Balance $11,938

Charged off as Bad Debt

30 days late – 0 times

60 days late – 0 times

90 days late – 0 times

The Worst Delinquency reports the worst missed payment status that has been documented on this account. Your FICO® score evaluates how recently that missed payment occurred and in general, the more recent, the more impact it has on your score. However, the fact that it occurred is still predictive of future payment risk and could be considered by your FICO® score.

Descriptions [?]

• Unpaid balance charged off

Contact Information [?]3625 West Royal La
Suite 100
Irving, TX 75063
(800) 533-0580

[RobertEG]

My first impression is not directed so much at "fixing" past damage, but rather at avoiding future damage.

You still have an unpaid debt.

I am a bit surprised that the OC account progressed to the stage of a charge-off without the prior reporting of monthly delinquencies, but nonetheless, you do have a CO reporting, as well as the repo.  They all cumulatively afftect your score. 

The debt is still unpaid, so you have two looming concerns...... the debt being referred to a debt collector and thus the reporting of a collection in addition to the already reported adverse items, and additionally the threat of legal action for recovery.

I would focus on those two items before focusing on removal of the old shrapnel.

What is the statute of limitations for debt in your state?  Has it expired?  Have you heard rumblings for any debt collectors?  Did the party who recently contacted you send you a dunning notice, and thus assert their position as a debt collector?

More info would be needed about the current status....

[esmer0924]

From my understanding Texas has a 4 year SOL and the first delinquent payment was October 2007 so the SOL was October 2011.  That is if I understand this all correctly.  Once I arrive at work in an hour or two I will add the information I have from the letter I received from another company to give more insight.

[esmer0924]

The letter I received was from Northstar Location Services, LLC

Saying the balance is $10,934.37

The above account has been referred to our office by Honda Finance Services for collection.  Your account is listed as delinquent with a total amount due of $10,934.37.  In addition, we are offering a hardship settlement in the amount of $4,373.75.  To find out if you qualify, contact our office at 1-866-677-2551 to discuss this payment option with one of our trained representativies.

Federal law requires that we inform you this communication is from a professional debt collector.  This is an attempt to collect a debt. Any information obtained will be used for that purpose. This collection agency is licensed by the Department of Consumer Affairs, the City of New York License # 1179143.

Unless you notify this office within 30 days after receiving this notice that you dispute the validity of the debt or any portion thereof, this office will assume this debt to be valid. If you notify this office in writing within 30 days of receiving this notice that you dispute the validity of this debt or any portion thereof, this office will obtain verification of the debt or a copy of judgment and a copy of such verification or judgement and mail you a copy of such judgment or verification. If you request this office in writing within 30 days after receiving this notice this office will provide you with the name and address of the original creditor, if different from the current creditor.

[llecs]

It's a dunning letter from a CA who is also offering a settlement. If you can take it, I'd jump at it. You might have tax consequences on the balance, but you'd save thousands nonetheless. I'd send them a modified PFD...pay-for-not-reporting where you'd get it in writing from them agreeing that you'd pay it in exchange for not reporting.

Don't call them. Keep everything in writing.

[esmer0924]

Thank you for your advice.  I will try to come up with a way to pay it but it's been really hard for me right now.  This item is the one that is really hurting my credit the worse.

[llecs]

If you haven't paid since the repo, and it's been 4 years, then the only thing to worry about is the CA reporting and increased balance due to interest. Settling it might stop its reporting if done soon. However, many CAs are open to a PFD-arrangement and it might be possible to get a PFD in the future if you wanted to wait.