Settle or PIF?

[Anonymous]

After spending a considerable amount of time on the phone today asking how much is would be if I paid a settlement amount. I got some settlement offers for the highest accounts that we owe. 

My question is, would it be worth taking it? Here's what we are looking it:

Cap One (closed but as long as I keep making payments to Cap1 they aren't selling it):

$859  can be settled for $645

$502 can be settled for $350 

Comenity Bank Acct sold to a CA:

$1050 can be settled for $850  

We aren't looking to buy a house for at least a few years. But we may need to buy a car in 6 months BUT we could probably pay cash for one. And since we are back at the bottom.. once we pay off those debts (the highest) then we will start again with a secured card. 

[Anonymous]

If it's between settling and PIF definitely settle. I would strongly encourage you to open lines of communication and try to PFD on the accounts though that's the best option.

[tomfromrictmame]

How are these accounts reporting?  Good standing or are they reported as derogatory? How much are you currently paying to each?

[Anonymous]

They are all derogoratory. With the comenity bank account, it JUST got sold to the CA so it's not reporting yet. Actually yesterday, I just received the letter in the mail.. although I already knew about it before hand. It just shows that it was sold on my credit report. 

[RobertEG]

If you settle for less, they must update the balance to $0, but can optionally include the special comment of paid/settled for less than the full debt.

That statement, upon a manual review, informs others that you have a history of not paying the full debt that you obligate.

That is never a favorable comment.  If you repeat that pattern, then lending to you will result in a loss.

You can, as part of a settlement offer, include the provision that they agree not to report any comments or status that reflects paid/settled for less.

Your credit report will then appear the same as if the debt was paid in full.

Additionally, if the difference between the full debt and the amount paid is greater than or equal to $600, they must issue a form 1099c with the IRS, who will then consider the cancelled difference as income to the consumer, which may result in it being taxable.

[tomfromrictmame]

I would without haste, contact Comenity and offer to PIF if they pull it back from the CO and delete it.  If it means you cannot pay or settle the Cap One charges then so be it.  The CA is about to become the most harmful of these items and you want to avoid CA's at all cost.

[Anonymous]

Ok, I'll call tomorrow. I called Comenity at the beginning of October and they said they had already sold it and transfered me to the CA. 

The same CA also got another Comenity account but I already settled and paid that debt last week.