large merchant collection account

[jessb]

so, when I was younger an not as wise () I signed a personal guarantee on a merchant account.  I did not own or have any share in the business.  It was my mothers business.  The business went under and I was saddled with 2 different merchant accounts (one Amex and one all the other cards). The total debt was north of 100k.  Luckily, one of the companies wrote it off and it is no longer attached to my credit. Nor do I think it's lying in wait for me somewhere.  I didn't get so lucky for the other one.  The last activity on the account (on my credit) was 2009.  But they just rereported a new, and higher balance...87k!  Yikes.  It only reports to one of the credit agencies. I know the rules for FHA about 1,000 in collections...obviously I'm over...haha.  I can't pay this back, and I don't think they'll sue me for it. The collector pulled my credit and they can see that I don't have much, but i still want it gone.  I would like to buy a house at some point and I'm not sure how to proceed.   I do not owe money to anyone else.  I have had a few late payments, but other than the collection I am an upstanding credit citizen. What can I do?  Wait? BK? Settlement?  Help!

[CAnNY]

Well, when was the DOFD? Also, has the SOL passed for them to sue you in your state? I would bare with the baddie personally at this point if it just shows as a CO. It has been this long, so if its just a CO I would wait it out to fall off in 7-71/2 years. If they sue and win I would file bk then and only then. Hope this helps. In the mean time I would fix all other baddies so when it does fall you will be ready for your new home. That's just my two cents! Good luck!

[RobertEG]

Credit report exclusion of whatever derogs may have been reported on the debt will not discharge the debt.

While it may no longer enter into FICO scoring after the derogs are excluded, disclosure of unpaid,delinquent debt will most likely be requested as part of a mortgage app process, and thus may still be a factor in any future approval of credit.

With expiration of both SOL and partial hiding of the bad debt once derogs on the debt no longer appear in your credit report, perhaps the creditor will become more amenablle to a settlement that you can afford.