Settlement Letter from CA

[Anonymous]

I had a Capital One card that was charged off. Capital One is still reporting to the credit bureau and the balance is being calculated into my utilization. I recently received a settlement letter from a collection agency (CBE Group) offering a settlement for 70% of the balance. This account is causing my utilization to be 64%, but if this were not there it would be under 10%. I am prepared to pay this, but want to make sure I do it the right way.

Since this letter is from the CA, if I pay this, will Capital One then have to report a $0 balance? Should I assume it will be reported as "settled for less than amount owed?" I'm assuming Capital One still owns the debt, so would it be better to call them directly? Also, since the CA is not reporting yet, can I be sure that they won't report after payment is received?

[kbl7td]

I literally just dealt with this same thing today. Cap one is reporting the debt, however they use an outside agency to collect. That agency then reports to cap one that they have collected and then cap one will report the 0 balance. 

BTW that is exactly what they settled with me for %70, they wouldn't go any less, or do a PFD. 

If you call cap one directly they will tell you to do the the collection agency. 

[Anonymous]

Thanks so much for your reply! Did they tell you how it would be reported? I'm assuming it will be "less than amount owed."

[kbl7td]

I'm assuming that as well, not as good as paid in full, however it should still look better than unpaid. 

[Anonymous]

Its in Your hand now that whether You wish to remain involved in the matter as it may drag for uncertain time or wish to get cash for settlement. One advantage of settlemets is that It would relieve You of the tensions and worries of however the matter continues.

[RobertEG]

The creditor is bound by agreements you reach with their authorized debt collector.  That is what an assigment of collection authority is.  If they agree that payment results in satisfaction of the debt, the debt collector must notify the creditor that the debt balance is zero, and the creditor must update their account balance to $0.  JUst be sure that the agreement specifies that the debt is satisfied in full and you should have no issue.

As for the mechanics of the settlement, best bet would be to get two concessions from the debt collector as part of your setlement negotiations.

First, that they wont report their collection to a CRA, and second, that the OC wont report an additional special commment of paid for less.

Hopefully, they can get agreement from the OC to such a conditioh.  The debt will then appear from a review of your CR the same as if paid in full.