12-06-2012 03:23 PM
i have an offer to settle a $ 8000 line of credit. for $2000 from nfcu. they say they will list the debt as "settled in full for less than the full amount owed". what should i ask it to be listed as? its nfcu and they say they will not delete. what are my best options? im not past the sol. dont want to waste time validating. what could they do?
12-06-2012 04:06 PM
Option B is that they take you to court and get a judgement for the full $8000. Sounds like a good deal they are offering.
12-06-2012 04:47 PM - edited 12-06-2012 04:50 PM
The legal issue is whether, regardless of the amount they accept, they consider the debt as satisfied.
The general meaning of settled is satisfied.
The debt balance must, if considered satisfied, be updated to report $0, unrelated to whether paid in full.
However, the credit reporting system permits creditors to report any satisfaction of the debt on their part based on agreement to accept less than the full amount of the obligated debt. That is done by way of an additional special comment of paid for less.
You can ask, as part of your settlement offer, that they agree not to report that special comment.
Absent the reporting of paid for less, the account/debt will appear to others reviewing your credit report the same as if it had been paid in full.
Their "offer" at this point is what the statute requires of them should they consider the debt satisfied..... paid, $0 balance. So they have offered only what is required.
If they wont delete, I would suggest at least getting agreement not to add the paid for less special comment, which advises others that, in the past, you did not fully repay all debt that you incurred.
12-06-2012 05:46 PM
Careful. You could end up getting sued on a slight formality. Ultimately your goal is to have your reports look good, but settling that much debt for a fraction regardless of what they code it as is a deal. Just as long as the debt is totally wiped away afterward. Also, do you have room for the $6,000 1099-C in your income? Sometimes that's enough to move someone up 10% to another bracket.