Should I settle my wife's credit card debt with 1st financial bank?

[Anonymous]

I've done my best to find some answers on the forums, but am struggling to figure out how to pay off some of my wife's debt.  Basically I'm trying to fully understand the pros and cons of paying in installments vs. paying in full.  As well as what happens if I settle with the bank directly for a lesser sum than we owe.  

My wife and I are newlyweds and I have been working to help her rebuild her credit and pay off debts.  I was fully aware of the debts going into the marriage, but she was very embarrassed to get help.  I've paid off her student loans and we just finished paying off her car.  My problem is in trying to figure out how to pay off her credit card with 1st financial bank.  Currently she owes a little more than $10,000 and has not made a payment in over 3 years.  I knew there was a significant amount on the card, but was not aware she was not making the monthly payments until recently.  How should we go about tackling this debt?  The bank has sent her a few letters now with debt settlement offers.  The amount differs by how many payments are made but offers a one time payment of $6,000.00.  After discussing the stress the debt has added to our lives, my parents have offered to help pay off the debt as a way of allowing us to start our lives fresh.  (Sidenote: I have some of the greatest parents of all time)  

I've been reading these forums and trying to determine the best way to pay this off.  If I am able to pay the $6,000.00 with a PDF from the bank stating this will be accepted as "paid in full" what will happen to her credit?  The answers seem to vary although I may be looking in the wrong places.  Is this the best way or should I do my best to pay it off in full over monthly payments?  I also am not sure how to properly pay the bank if an agreement is reached.  Any help pointing me int the right direction would be greatly appreciated.    

[guiness56]

Paid or unpaid collections from a 3rd party CA are scored the same by FICO as they are only seen as collections.  On a manual review a paid collection will look better.

A settlement, as long as it says paid in full, is better than a settled for less.  This is because they can come after her for the deficiency balance if settled for less.  They could also issue a 1099-C for the remainder which will become income for the year the 1099-C is received.

To give you the best advice, we need to know the DoFD and the SOL in your state.  Is the OC and CA reporting?

In many states, making a partial payment can restart the suing SOL.  In others, a written acknowledgment is needed.  In 2 states when the SOL expires the debt is extinguished.

Any CC debt that is CO'd and is reporting a balance and the CL is hurting the score. 

A PFD is a pay for delete and if accepted the entire TL would be deleted.  If it is the oldest account her AAoA could suffer.   However, if it stayed the negative of the CO would still be there.

The best thing for a collection is to have it removed.

When at all possible, it is better to pay the debt in full and not enter into any payment plan.

I don't know if this answered any questions.  If you have more please ask.