Baby steps

[gdtobefree]

I guess the first step is to do thie one by one.

I have learned my lesson about CA's, no matter how many you remove the score won't go up a lot until some of the CO's are gone.

I am going to ask this bluntly (because I have a tendecy to mess things up),

I am starting at a 508.

GMAC opened 3/03 co signed for a freind, friend let it get repoed, I was never asked to take over notes or vehicle, sold at auction and the charge off balance in my report is 11753.00 DOFD is 5/2006

Payment history showing CO Dec 07, 30 may 06, 30 june 06, 60 July 06, 30 aug 06, 30 sept 06, CO oct 06.

Someone in baby steps direct me in the right direction, How do I get this off or in a better status to where it doesn't affect my score?

If you suggest a letter, can you provide a copy? Please?

[granny031350]

Is the person you cosigned for taking care of this deficiency balance?  Or are you stuck with it now?  I think if you are stuck with it you might offer them a settlement for less than owed and when you do that ask them to update your credit report to reflect a positive TL and/or delete completely.  Also remember to ask them NOT to send a 1099-C to the IRS (difference when debts are settled for less can be counted as income for tax purposes).  As to the letter,  this is what I found.  You might want to reconfigure it to fit your needs. 

Collection Agency
1212 Maple St
City, State Zip

Re: Collection Account for Original Creditor Account #: 00000xxxx

Amount: $25.00

To Whom It May Concern:

This letter is to inform you that the validity of this debt is disputed. I am not sure of the account number, as I have never heard from you regarding this account. The account number I have is the one listed on my Experian credit report – which omits the last few digits.

In the spirit of compromise, I am willing to pay this account IN FULL (or settlement percentage) if you agree to immediate deletion of this account from any and all credit reporting agencies (Equifax, Experian and TransUnion). The purpose of this settlement is merely to have this item removed from my credit files. It is not to be construed as an acknowledgment of liability for this debt in any form.

If you agree to the terms and accept this agreement, certified funds for the settlement amount of twenty-five dollars ($25.00) will be sent to Collection Agency in exchange for full deletion of ALL references regarding this account from my credit files and full satisfaction of the debt. As certified funds will be used for payment, there shall be no waiting period regarding the deletion of this account from the credit reporting agencies.

Collection Agency agrees to delete ALL information regarding this account from the credit reporting agencies WITHIN TEN CALENDAR (10) DAYS following receipt of payment as specified above and will not discuss the terms of this settlement with anyone, excluding your client on this account. If contacted by any third party, including credit-reporting agencies, Collection Agency will not acknowledge that any settlement offer was made, accepted or executed and will, in fact, deny knowledge of any such account.

If you agree to the above terms, please prepare a letter on your company letterhead explicity agreeing to the same terms as the above settlement offer and have it signed by an authorized representative of Collection Agency. It will be implied that this letter shall constitute a legally binding contract, enforceable under the laws of my state.

Your response must be postmarked no later than 15 days from your receipt of this settlement offer or this offer will be withdrawn and I will request full validation of this alleged debt, as provided for by the Fair Debt Collection Practices Act.

Please address all correspondence regarding this account to:

You
123 Any Street
City, State Zip

[gdtobefree]

I am stuck with it! What do you think I should offer? 10 %

BTW Thank You for your detailed response.

Message Edited by gdtobefree on 01-30-2008 10:09 AM

[granny031350]

Well affordability is key here but I would go really low to start because you wouldn't want to start high and end up with something you can't afford.  I know when I had a couple of Ford deficiency accounts, we ended up settlement one 14,000 account for 2500.00  So I would offer no more than 10 percent to start.  (maybe 5 percent)

Message Edited by granny031350 on 01-30-2008 10:13 AM

[Anonymous]

---

granny031350 wrote:

... I think if you are stuck with it you might offer them a settlement for less than owed and when you do that ask them to update your credit report to reflect a positive TL and/or delete completely.  Also remember to ask them NOT to send a 1099-C to the IRS (difference when debts are settled for less can be counted as income for tax purposes).  As to the letter,  this is what I found.  You might want to reconfigure it to fit your needs. 

This is a letter for a PFD, which is what you want.  You do not want them to update your report because it will show it was a repo paid in partial settlement.  Even if it is paid in full, it still hurts your score.

This is the entire PFD thread:

http://ficoforums.myfico.com/fico/board/message?board.id=generalcredit&message.id=2659

Do NOT ask them not to send the 1099-C to the IRS.  They are required to send one if the amount written off exceeds $600.  You don't want to ask them to commit tax fraud, although some creditors just don't bother filing.

[granny031350]

well I made that a part of my condition when I settled an account for less and they agreed.  I think they just wanted their money.

[gdtobefree]

OMG you guys a re so awsome, you don't know how much a really really appreciate your info.

Hoptehical question?

What if they send me back a letter saying they won't take the 10 % and want 75 % or something like that?  Or "NO WAY GO FLY A KITE"!

[granny031350]

well that would be an issue and is why you should be ready when you fire off the letter.  10 percent of 11,000 plus would be around 11000.  IMO the older the debt, the less it takes to settle. 

[Anonymous]

Keep in mind that this is a new debt. You have a long wait for SOL....they can file suit at any time. You might do better doing a PFD with full payment!

[gdtobefree]

I can't afford to pay the whole amount