Hello - thank you for reading
Trying to rebuild my credit and change my negative/low scores. I have "some" money - what is the short, bullet point version of settling?
Unfortunately, there is no short, bullet proof procedure for settling.
Accepting the debt as satisfied by accepting payment of less than the full amount is always discretionary on the part of the creditor/debt collector.
It is an offer.
The best outcome is to offer a settlement for less with the additional agreement that they delete their current reporting of the adverse information.
However, those are usually hard to obtain, so a fallback is needed. You may receive no reply at all, so are in limbo.
Chances of obtaining CR deletion are usually increased if the offer is to pay in full.
If they wont accept CR deletion, the next best thing is to at least secure their agreement not to report the paid for less to the CRA.
That informs others that you did not fully pay the entire obligated debt. Absent the reporting of that special comment, the status will be paid, and it will appear the same as if paid in full.
Lingering is the issue of other alternatives they may have. It is wise to know the SOL status of the debt prior to entering into negotiations, as they might have the alternative to continue to pursue the entire amount in court. If the account is still with the OC, they have the option of securing a debt collector, which could result in the addition of a collection to your CR, and thus the need to pursue two CR deletions.
So further damage potential is also an issue, and holding out for both settled for less and CR deletion might be a bit risky.
Thank you Very helpful information. I have pulled my CR on MyFico and through credit monitoring on USAA. I remember there was a reporting agency that did show the SOL but I do not see it on the copies I have. What is the best way to know the SOL status?
The story is the same as some I'm sure - divorce, moving blah blah...I have some but limited money and want to make thebest use of it. I thought my attempt and wanting to make a situation right would be welcomed but I am seeing that the OC and CA really don't care. So why offer the settlement? What is the benefit to me? Really? My score is already damaged.
So with limited funds, do I split among the outstanding and settle and be done or PIF only what i can? Goal is to boost my score and get out from under the past.
Thanks again :-)
The best way to go is PIF! Settlements remain a baddie on your CR
The benefit is eliminating an apparently legitimate debt.
Not paying may lead to further credit damange by reporting of a collection, or possible judgment. It is doubtful they will just give up.
Even when eventually excluded from your CR, it remains unpaid, delinquent debt, and others might still become aware of it, and deny credit on that basis.
A future creditor may, for example, simply ask if you have any old, unpaid delinquent debt.
Additionally, the creditor or debt collector can continue to pursue collection, provided their actions remain legal. While you can send a cease communication letter to block direct communications to you, other acts, such as continued credit report inquiries, may continue.
No telling when old, unpaid delinquent debt can come back and bite you.