@valley_man0505 wrote:
I can't even believe I am saying this, but I am thinking about contacting CrapOne to try to work out a settlement even though SOL is likely coming in 1-2 months. I found a house that I like, so I may push my mortgage plans up a little. This CrapOne CO is now showing as $5648 and is by far my largest derogatory balance. I would be going into my mortgage app process with a mid score barely over 620 (if I can even get it there by then), so I think that gettting this large CO paid would make me at least look a little better to lenders.
Also, I am afaid the if I do wait until SOL is over to contact them, they may file suit at the last minute. I would assume that once they file suit, it will be too late for any reasonable settlement to keep it out of court (I definitely don't need a judment a month before applying for a mortgage). Perhaps if I contact them on my own, I could get a litte better terms for the settlement and prevent them from going after a judgment.
Any thoughts on this? I know paying the balance off won't help my score, but it shouldn't hurt it either as they are updating every month anyway. The only thing I am worried about is what they "settled for lesser amount" notation would do to my score. Would that be any worse than having the balance reporting each month like it is now?
Oh, and before anyone asks, no, I can not afford to PIF. Well, I could, but that would blow my downpayment money and kind of defeat the purpose of contacting them early. However, I think they would likely settle for less since the debt is so old.
Message Edited by valley_man0505 on 01-27-2009 01:56 PM
i'm not one for refusing a deal when there is enough upside, but here I do not frankly see any upside for you.
Crap1 is unlikely to delete this any time soon, even if you pay tomorrow, and your score it's unlikely to change once is paid. also, they might toll SOL with a partial payment just to make things worse for you.
if today you have 1 chance to get by the SOL the date without suit, by alerting them, they might file just to make sure the negotiation doesn't bring them past the SOL line.
Once the suit is filed, you have plenty time to negotiate. I would actually wait to be sued, and once filed discuss with the law firm that you plan to subpoena documents and witnesses, go on for weeks and once they get a judgment let them sweat any money because you don't have any assets and your job is actually in jeopardy right now (it doesn't need to be true to the letter, just sound like it), or they can accept 25% in full settlement before going to court - the offer to be withdrawn once you appear in court (negotiation documents cannot be used in court - so they can't tell the judge you offered them X% already). Fighting in court is not particularly hard, most of the work is done before going in the room - you ask (subpoena) for a bunch of documents plus first hand testimony by the people who open this account and saw it go into default - it's always hard for law frims to rpoduce this much evidence for such small (in relative terms) debts, and costs them money to travel witnesses.
Starting Score: 668