topic Re: Closed and settled account -refuses to zero out in Rebuilding Your Credit

Closed and settled account -refuses to zero out

Anonymous — Wed, 05 Sep 2018 12:46:53 GMT

So what am I doing wrong here? I have a closed Kohls Account (not in collections), I called to discuss payment arrangements, they offered me a 60% settlement which I took AND paid as agreed and they acknoweledged such. It was my understanding that when I paid the 181 according to the settlement that the account would then say I owed no more, and the balance listed below would go to zero. Its been MONTHS since I did this, I called the company, they now say that the balance will never go to zero until I pay the other 181. Well, what exactly was the point of the settlement? Why don't the months of June and July reflect the months I made payment on the settlement? why does it say FP (fail to pay)? I've called the company, I have disputed with all 3 bureaus and this still persists, just like this on my credit reports. What do I do next? I just want it to say that I have a zero balance and that I have nothing past due because we "settled". (I am trying to attach my settlement letter from the company but it won't allow me to. Anyone who wants to see it, to collaborate that I've paid the settlement I'll send it). Where do I go now?

Re: Closed and settled account -refuses to zero out

Anonymous — Sat, 27 Oct 2018 16:23:39 GMT

(Mod Cut-Please remove your name and account number and any other personal info then it can be reposted)

Re: Closed and settled account -refuses to zero out

RobertEG — Wed, 05 Sep 2018 14:27:32 GMT

You can, if the creditor fails to update the debt balance to $0, bring civil action and force them to do so.

However, you must first file a dispute with the CRA contesting the accuracy of the reporting. See FCRA 623(c).

If the dispute outcome fails to provide correction, you can then bring civil action and get the matter reviewed by the courts.

Re: Closed and settled account -refuses to zero out

Anonymous — Wed, 05 Sep 2018 14:59:26 GMT

Thank you. I will pursue this route next. The results of my dispute with the last credit agency just came back yesterday, with no change, still says I have a 181 balance. Next step is to hire an attorney? which court - state or federal? I know it doesn't seem like a lot of money - but its the principle of it. If when I called, they said I had to pay it all, I would have gladly done so.

Re: Closed and settled account -refuses to zero out

Anonymous — Fri, 07 Sep 2018 02:07:09 GMT

You can try to submit for dispute again and also include the letter from Kohl's as supporting evidence. Might be worth a shot and a lot less troublesome then taking legal action. JMHO!

Re: Closed and settled account -refuses to zero out

Anonymous — Fri, 07 Sep 2018 02:51:05 GMT

@Anonymous wrote:
You can try to submit for dispute again and also include the letter from Kohl's as supporting evidence. Might be worth a shot and a lot less troublesome then taking legal action. JMHO!

I second this. Taking the legal route can be time-consuming and cost a lot of money, especially for a $300 retail card.

Re: Closed and settled account -refuses to zero out

Anonymous — Fri, 07 Sep 2018 03:37:13 GMT

You paid a partial amount of the balance not the balance in full.

You don't have to pay anything further but you never fully extinguished the debt. This is why your bureau is showing a balance >0. Its probably easier to just pay the $181 vs fighting and going the legal route.

Re: Closed and settled account -refuses to zero out

Anonymous — Fri, 07 Sep 2018 03:50:46 GMT

@MixedNuts - That is incorrect for the balance to still show an amount. If the debt is settled for an agreed upon amount and paid to satisfaction, the balance must be updated to $0 since the debt has been discharged.

Re: Closed and settled account -refuses to zero out

Anonymous — Fri, 07 Sep 2018 03:58:08 GMT

This debt has been settled to a lower amount than the total debt. While the customer doesn't have to pay anything further (attempting to further collect on the account would violate the settlement agreement), it doesn't mean that they've fully paid off the debt. Again this is why it isn't showing as $0

If the customer pays the $181 it will lower the debt to $0. Yes they're settled but they haven't fully paid back the debt.

Re: Closed and settled account -refuses to zero out

Anonymous — Fri, 07 Sep 2018 04:07:40 GMT

@MixedNuts - that's incorrect. Balance should report $0 if settled and paid.

@OP, if a second dispute with Kohl's letter isn't successful, you can also file a complaint with CFPB.

Re: Closed and settled account -refuses to zero out

Anonymous — Fri, 07 Sep 2018 04:37:45 GMT

@Anonymous wrote:
@Anonymous - that's incorrect. Balance should report $0 if settled and paid.

@OP, if a second dispute with Kohl's letter isn't successful, you can also file a complaint with CFPB.

I agree with Cole, MixedNuts. Here's an example:

Re: Closed and settled account -refuses to zero out

Anonymous — Fri, 07 Sep 2018 11:44:47 GMT

@disstreetcoolkid200 - Thanks for sharing how you've seen it reported. I guess I might be wrong here.

@OP -I think I misread the original post last night and I'm a little confused. Was the 60% settlement on the original charged off balance or the Credit Limit? I don't understand how you can settle and pay for 60% of balance and then have to pay the 60% again. Did the $181 you already paid get returned?

Re: Closed and settled account -refuses to zero out

RobertEG — Fri, 07 Sep 2018 16:53:03 GMT

If the creditor clearly agreed that the payment was a settlement of any remaining debt obligation, then they must promptly, per FCRA 623(a)(2), update the current balance to $0.

However, if the creditor did not clearly agree that a given payment would discharge any remaining debt obligation, then the new balance would be updated by subtracting the payment amount from the prior balance.

The support for any dispute, complaint, or civil action asserting a requirement to update the balance to $0 thus must be supported by some evidence that the creditor agreed that the amount discharges the debt.

What is the specific agreement reached before payment was made?

Re: Closed and settled account -refuses to zero out

Anonymous — Fri, 07 Sep 2018 23:40:06 GMT

This happened to me in New York with a settled debt

the account should show zero since OP has no future liability. Settled means debt is satisfied and creditor has no claim. I sent a compliant to creditor as well as CRA’s and said suit will be filed it the account wasn’t corrected. It was quickly updated to zero

Re: Closed and settled account -refuses to zero out

AndySoCal — Sat, 08 Sep 2018 02:06:20 GMT

The link below should help get the information to Experian for your dispute. It shows you various ways to send them information

https://www.experian.com/blogs/ask-experian/credit-education/faqs/how-to-dispute-credit-report-information/

Re: Closed and settled account -refuses to zero out

Anonymous — Mon, 22 Oct 2018 21:02:20 GMT

I'm bumping up this old thread to give an update and further vent my frustration. Yes I know its just $181.00 balance, why not pay it...but I'm here to tell you that "Settled for less than the full amount" doesn't mean anything to Kohls. As referenced earlier.... I went to the CFPB with this issue, and the following quotation is from the letter Kohls wrote to them, where they flat out refuse to zero out the balance, even after acknowledging that I did pay the 60% as we agreed to. They continue to use the word "settle" but maintain that the balance will continue to report. I tried... I'm done... I've been defeated with this one:

Dear Ms. Hudson,
I am writing in response to your complaint filed with the Consumer Financial Protection Bureau
(CFPB), which was forwarded to my attention in the Executive Office of Kohl’s for resolution.
While Kohl’s has an established partnership with Capital One N.A., we provide the in-house
servicing for your Kohl’s Charge account. As it is my intent to provide our customers with quality
service, I appreciate the opportunity to address your concerns.
In your complaint, you state that you called Kohl’s and set up a settlement agreement to pay
60% of your balance, in three 3 payments and the account would indicate on your credit report
that it was settled for less the balance. Once you completed the payments your credit report
was still showing a balance, when you called Kohl’s to discuss the balance you were told the
balance would remain on the account until you paid it off; however, that was not your
understanding of the word “settled”. Additionally, you request that Kohl’s remove the remaining
balance on the account and remove the entire tradeline from your credit report.
We have confirmed that the information previously furnished to the Consumer Reporting
Agencies (CRAs) is accurate; updating the information as requested will create an inaccurate
representation of your account with us. The integrity of the credit reporting system relies on the
validity of information furnished and therefore, we respectfully decline your request to remove
the balance and the tradeline from your credit report. Please allow me to explain further.
We do not remove past due payment history or an account from the customer’s credit file in
return for payments, whether it is a settlement for less than the total balance or a payment in
full.
Enclosed for your review are billing statements

Re: Closed and settled account -refuses to zero out

RobertEG — Mon, 22 Oct 2018 22:14:51 GMT

That may be what they wrote to you in response to the CFPB complaint, but the real issue is what has or will the CFPB rule on the issue......

Settled means what it says...... the debt is settled, and there is no longer any debt obligation. No debt = $0.

Simple. I would be shocked if the CFPB were to state otherwise.

FCRA 623(a)(2) then mandates update of the current balance to $0.

Regardless, you can get definitive ruling as opposed to an admin interpretation by the CFPB by filing a civil action and getting a binding judgment from the courts.

Re: Closed and settled account -refuses to zero out

Anonymous — Mon, 22 Oct 2018 22:31:33 GMT

Agreed with Robert (not that he’s ever wrong lol). When an agreement is made for satisfaction via settlement, the original outstanding balance is irrelevant - the settlement amount becomes the new and complete liability. When it’s paid, the debt is fully satisfied and holds a zero balance.

I don’t see what Kohl’s thinks they have for grounds to stand on against this.

Re: Closed and settled account -refuses to zero out

Anonymous — Tue, 23 Oct 2018 01:08:08 GMT

This was Kohl’s response to CFPB, and they (CFPB)closed out the case based on the response. They were no help here. So, how does one escalate this further? For principle more than anything.

Re: Closed and settled account -refuses to zero out

Anonymous — Thu, 25 Oct 2018 12:42:11 GMT

File a civil suit. Most attorneys will do this on a contingency basis. What state are you in? I may be able to help you find someone.