topic Re: Old debt collection from 5 years ago - better to pay or let it drop off? in Rebuilding Your Credit

Old debt collection from 5 years ago - better to pay or let it drop off?

VinnyVee — Thu, 22 May 2014 21:43:11 GMT

So long story short, some friends and myself moved into an apartment with no credit history at around the age of 19. Of course, we didn't read any fine print and ignored the collection mail and all that other fun stuff, being young and careless. Fast forward 5 years later, and I find myself in a situation to get my credit cleaned up. I've already cleaned up my medical debts with deletions.

However - with the apartment debt I find myself in a bit of a grey area with what to do. They're willing to settle for 50% off what is owed. My big dilemma is that with how old it is, I can't seem to find a solid answer as to whether it would be better to be paid off in some way, or if it's at a point where it would be better to let it drop off in about 2 years.

Different websites seem to differ quite volatilely on the best approach, and I unfortunately couldn't find any posts the seemed close to my situation. If somebody knowledgable would be able to give me their opinion, I would quite appreciate it. Thanks in advanced for the reply/replies!

Re: Old debt collection from 5 years ago - better to pay or let it drop off?

gdale6 — Thu, 22 May 2014 22:18:04 GMT

@VinnyVee wrote:
So long story short, some friends and myself moved into an apartment with no credit history at around the age of 19. Of course, we didn't read any fine print and ignored the collection mail and all that other fun stuff, being young and careless. Fast forward 5 years later, and I find myself in a situation to get my credit cleaned up. I've already cleaned up my medical debts with deletions.

However - with the apartment debt I find myself in a bit of a grey area with what to do. They're willing to settle for 50% off what is owed. My big dilemma is that with how old it is, I can't seem to find a solid answer as to whether it would be better to be paid off in some way, or if it's at a point where it would be better to let it drop off in about 2 years.

Different websites seem to differ quite volatilely on the best approach, and I unfortunately couldn't find any posts the seemed close to my situation. If somebody knowledgable would be able to give me their opinion, I would quite appreciate it. Thanks in advanced for the reply/replies!

Well its personal preference on this. What I normally advise people on something like this is first make sure its past states SOL, if it isnt tread lightly as they can still sue. If its past states SOL make the settlement if they give you the PFD. If you are planning on purchasing a home it will have to be taken care of prior to closing so that is another point to look at. If you are not going to be buying prior to it dropping off and they wont do PFD then I would advise you to wait for it to get older and then make another offer. Welcome to the board

Re: Old debt collection from 5 years ago - better to pay or let it drop off?

SunriseEarth — Thu, 22 May 2014 22:17:49 GMT

@VinnyVee wrote:
So long story short, some friends and myself moved into an apartment with no credit history at around the age of 19. Of course, we didn't read any fine print and ignored the collection mail and all that other fun stuff, being young and careless. Fast forward 5 years later, and I find myself in a situation to get my credit cleaned up. I've already cleaned up my medical debts with deletions.

However - with the apartment debt I find myself in a bit of a grey area with what to do. They're willing to settle for 50% off what is owed. My big dilemma is that with how old it is, I can't seem to find a solid answer as to whether it would be better to be paid off in some way, or if it's at a point where it would be better to let it drop off in about 2 years.

Different websites seem to differ quite volatilely on the best approach, and I unfortunately couldn't find any posts the seemed close to my situation. If somebody knowledgable would be able to give me their opinion, I would quite appreciate it. Thanks in advanced for the reply/replies!

First off, are you past the SOL on this debt?

Are they willing to do a PFD if you settle? If so, you should proceed. If not, settling could be bad for your scores, as it will make the collection look more recent. If that's the case, you may want to wait until the collection falls off before you settle.

Re: Old debt collection from 5 years ago - better to pay or let it drop off?

SunriseEarth — Thu, 22 May 2014 22:18:42 GMT

@gdale6 wrote:
@VinnyVee wrote:
So long story short, some friends and myself moved into an apartment with no credit history at around the age of 19. Of course, we didn't read any fine print and ignored the collection mail and all that other fun stuff, being young and careless. Fast forward 5 years later, and I find myself in a situation to get my credit cleaned up. I've already cleaned up my medical debts with deletions.

However - with the apartment debt I find myself in a bit of a grey area with what to do. They're willing to settle for 50% off what is owed. My big dilemma is that with how old it is, I can't seem to find a solid answer as to whether it would be better to be paid off in some way, or if it's at a point where it would be better to let it drop off in about 2 years.

Different websites seem to differ quite volatilely on the best approach, and I unfortunately couldn't find any posts the seemed close to my situation. If somebody knowledgable would be able to give me their opinion, I would quite appreciate it. Thanks in advanced for the reply/replies!
Well its personal preference on this. What I normally advise people on something like this is first make sure its past states SOL, if it isnt tread lightly as they can still sue. If its past states SOL make the settlement if they give you the PFD. If you are planning on purchasing a home it will have to be taken care of prior to closing so that is another point to look at. If you are not going to be buying prior to it dropping off and they wont do PFD then I would advise you to wait for it to get older and then make another offer. Welcome to the board

Looks like we're on the same page here! Heheh

Re: Old debt collection from 5 years ago - better to pay or let it drop off?

VinnyVee — Thu, 22 May 2014 22:25:26 GMT

gdale6, thanks for the welcome!

Yeah, i'm definitely outside of the SOL, and I don't plan on getting a home in the next 2 years here. Apparently according to the CA they're in contract to not offer PFD with the OC. So as it stands, its looking like It's better to wait until it falls off than to try to breathe new life into something that hasnt been touched since late 2009. Thanks gdale6 and SunriseEarth!

Re: Old debt collection from 5 years ago - better to pay or let it drop off?

Shogun — Thu, 22 May 2014 23:40:45 GMT

It's 5 years old and not getting any younger. It's past the SOL. It would be in their best interest to take the deal and run with it. If not, let it age if you have nothing big to app for. Then when it's on it's last leg, offer them 10% to be done with it, take it or leave it.

Re: Old debt collection from 5 years ago - better to pay or let it drop off?

VinnyVee — Thu, 22 May 2014 23:58:58 GMT

Shogun, I'll keep that in mind. From what I've deduced from everything I've read is that at this point if they wont delete it, then I would be wasting my time and money as well as possibly letting them renew the age of it staying on my account. We're going to try to offer a PFD in writing from them, and if not then it will be a no go for us. Thanks for the feedback!

Re: Old debt collection from 5 years ago - better to pay or let it drop off?

Whitneyy — Fri, 23 May 2014 00:08:58 GMT

Who's the collection with?

Re: Old debt collection from 5 years ago - better to pay or let it drop off?

VinnyVee — Fri, 23 May 2014 00:12:38 GMT

It's with National Credit Systems

Re: Old debt collection from 5 years ago - better to pay or let it drop off?

VinnyVee — Wed, 28 May 2014 17:21:51 GMT

OK - I hate to bump this thread, but the CA just gave me a call and said that on my CR it would state that the amount was paid in full and close the account as opposed to saying it's settled and leaving it open with a balance of $0.

With all that said - would this situation be worthwhile, if there's enough of us to help settle for the 50%, and would that also renew the 7 years that it takes for this account to drop off? Anybody input would be appreciated!

Re: Old debt collection from 5 years ago - better to pay or let it drop off?

Shogun — Wed, 28 May 2014 17:28:59 GMT

@VinnyVee wrote:
OK - I hate to bump this thread, but the CA just gave me a call and said that on my CR it would state that the amount was paid in full and close the account as opposed to saying it's settled and leaving it open with a balance of $0.

With all that said - would this situation be worthwhile, if there's enough of us to help settle for the 50%, and would that also renew the 7 years that it takes for this account to drop off? Anybody input would be appreciated!

Might look better under a manual review, but as far as your scores go, it wouldn't make a difference if it was settled or paid in full. So not much of a help there.

The CRTP which is what mandates how long this can remain on your CR has nothing to do with the CA, so paying them, not paying them won't make a difference. This is set by the DoFD from the OC. They cannot legally change the DoFD, if they were to do so it is a major infraction according to the FCRA.

Re: Old debt collection from 5 years ago - better to pay or let it drop off?

VinnyVee — Wed, 28 May 2014 17:37:17 GMT

Awesome. As per usual, thanks a ton Shogun!