Need some expert advice on my current situation, please.

[Anonymous]

About 6yrs ago I had to stop working due to medical issues. At the same time I became late on my bills and before I knew it they were all in collections and now charged off. One more year it will be 7yrs. Well I am finally better and have started to gain some income again. I have kept all the letters the collection agencies have sent me. A lot of them are offering me a negotiated discount amount to settle my dept. My question is how or what is the best way to communicate with the collections agencies to make sure I can pay the discounted amount and have the account reported as paid off and settled? I just don't want to agree to a discounted amount and then they turn around and bill me for the rest. Which will also re-open the account and then I would have to wait another 7yrs or so to have it removed. I still can't pay the original amount because I just started to gain income and I would have to wait probably another 3yrs to get the money and finally pay it off. If they will settle with the discounted amount I can pay everything off now and be done with it. It's a total of 6 accounts and about $4000.00(discounted amount) total for all to be paid off. I've read that it's better to communicate through letters and not telephone. Also what exactly should the letter say? Do I ask for a receipt and a letter stating the dept has been paid? If anyone can help I would be very grateful and I thank you. I just want to move on and take care of these accounts. It will also help my credit. Thank you.

[Anonymous]

Paying off collections will not help you scores. FICO sees paid & unpaid as the same!  If the DOFD is 7 -7.5 years ago then they must delete from your CR.  Make sure that you have hard copies from all 3 CRAs showing the OC and any CAs reporting the same debt!!!!!.

Once an account is COd. The creditor and a CA can continue to report the same debt until CRTP is past (approx 7 years)  If a CA reports paid/settled or anything like that you will see your scores go down if it is updated by them.

If you pay a CA you would first DV them CMRRR  and then if they answer then you would send them a PFD.  If the accept then they will delete BUT the OC will not!

Look at your CR for the drop date. EQ and TU will say something like....will remain on CR until  month/year

All

If any of the collections are medical use the HIPAA process to pay or have deleted.

http://ficoforums.myfico.com/fico/board/message?board.id=rebuildingcredit&thread.id=27537

Abbrevs that we use

http://ficoforums.myfico.com/fico/board/message?board.id=rebuildingcredit&thread.id=584&jump=true

What is your SOL?  If you are past SOL and almost CRTP    I would sit tight & start with new credit.

They all offer to settle when they have no way to sue you.

SOL by state

http://www.bankrate.com/brm/news/cc/20040116b2.asp?caret=8

frequently requested thread    this is full of info. listed by abbrevs.

http://ficoforums.myfico.com/fico/board/message?board.id=generalcredit&thread.id=6834

Please ask as many questions as you need.

Message Edited by HappyDays on 01-30-2009 01:23 PM

[Anonymous]

Thank you very much for your info. I didn't realize that my score would go down if I paid these old accounts off. As far as the 7yr credit reporting act law goes. I thought in order for them to remove the report it had to be paid off and if it remains UNPAID even if it's been 7yrs it still remains on your report. Well at least that is what I've read at other credit forums. I'm a little confuse now. My SOL was back in 2007 and does the SOL go by where you currently live or where the credit originated from (like where you sent the bill)? 

[Anonymous]

SOL  goes by where you received the credit OR where you live now. Usually it is where you live now unless the other SOL is much longer. 

Other state laws might come into play  like, I live in Ct. and CAs can NOT file suit. They must hire a Ct. licensed attorney to do so. This means that they have to pay big bucks sooooo they do not sue unless you owe a lot.

The reason that scores go down when dealing with any baddies....they might not have updated in several years and now when any payment is made they will.  FICO looks at the report date and if it is newer then last reported...down they go.

CRTP is federal law and states that a CO (iincluding a reporting CA) must delete in approx.7 years.

SOL is state law and deals with the time in which any creditor can file suit. Some states use DOLA to set SOL. In other words if the CO was 2000 and you made a payment to the OC or the CA in 2001  then the SOL may be reset BUT not the CRTP.

CRTP v SOL

http://ficoforums.myfico.com/fico/board/message?board.id=generalcredit&thread.id=17466

Public records have different times that they can report...judgments,liens etc.

Credit scoring 101 will give you more info.   It is the first thread

http://ficoforums.myfico.com/fico/board/message?board.id=generalcredit&thread.id=6834

If your SOL was ran out in 2007 then they can file a lawsuit but can not win.....because you are past SOL!!!

Message Edited by HappyDays on 01-30-2009 02:54 PM