Settling on Collections - Payments vs. Lump Sum Payment

[js0319]

I have always been advised not to make payment arrangements with collectors, but never really understood why I shouldn't make payment arrangements. 

If you settle an account for $1,000 (and the CA is giving you the chance to make payments), are there any repercussions by making payments vs. paying in a lump sum?

[pizzadude]

I think that the reasoning is that it just gives CAs more leverage against you.....like if they misapply a payment, or decide not to mark it as paid, or tack on more fees.....

Fewer transactions with CAs will result in a lower chance of something getting messed up......

Regardless of what you choose to do ~ make sure that you get the terms in writing from the CA before you make any payments.

[js0319]

So, it doesn't do anything as far as changing DOFD or extending the amount of time the account will show on your CR?

[pizzadude]

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@js0319 wrote:

So, it doesn't do anything as far as changing DOFD or extending the amount of time the account will show on your CR?

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No, the DOFD is the first time you were deliquent on the original account, without becoming current, before it was charged off, and can't be changed.

Any collection accounts will have their credit reporting time period ( CRTP ) based on the DOFD of the original account.

[js0319]

If TU is reporting that the account will be listed on my CR until 5/2014, would it be safe to say that the SOL has already past (it's 4 years in my state)?

[pizzadude]

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@js0319 wrote:

If TU is reporting that the account will be listed on my CR until 5/2014, would it be safe to say that the SOL has already past (it's 4 years in my state)?

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Do you have a copy of your Equifax report ?  It will show the DOFD ~ unfortunately TU and EX only show an estimated date of removal.    It's possible that 4 years since the DOFD has elapsed, but you really need to find the exact date to be certain.

[js0319]

EQ is showing DOFD is 6/2007, and "date major delinquency first reported" in 7/2008. So which one is it?

[aot2009]

Remember to request PFD. 

+1 on the 1 payment, avoid many transactions just way too complicated for something that you can just take care of in 1 payment.

[pizzadude]

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@js0319 wrote:

EQ is showing DOFD is 6/2007, and "date major delinquency first reported" in 7/2008. So which one is it?

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The CRTP is based off of the DOFD.    So any collections associated with this account should drop no later than 7.5 years from 6/2007, which would be approx 12/2014.

[aot2009]

Unless it's paid in full and you live in NY which would allow you to have it removed in 5 years.