Can anyone answer my question please?

[Anonymous]

Hello everyone, I had a question and wanted some advice before I made a decision. I received a letter in the mail today from my credit card company. They are offerning a settlement of a 45% break. I have been working on my credit since October and I have four new accounts that need attention. Everything else will be dropping off by 2012 so I'll wait it out. My question is should I settle with this company and then send a GW letter or should I still send a PFD for the full amount. I really want to take care of this because I saw a small drop in my TransUnion score and believe this is the reason. Can anyone give me any advice please???????

[StartinOver]

I won't be able to help you, but I will let you know that the others will respond that they can better help you if you are more specific as to information about the creditor.

You will want to list who the OC is and if there is a CA and if both or one is reporting. What is the DOFD. Was it medical or other type, etc. They just need facts before the can answer general questions. Good luck.

[Anonymous]

If you accept the settlement they will still be able to try to get the remainder.  You would need to make sure the agreement ( in writing) states the amount you pay will end your financial obligation for the debt.

With a settlement they probably would not accept a GW.

Ask them up front if you PIF will they either erase all negative annotations or delete the TL.

How old is this debt?

[Paxx]

First, A settled collection is the same as an unpaid collection as far as how fico figures your scores.   Second. If the letter is from a CA and both the CA and OC are reporting, I would try to contact the OC 1st before doing any settlements with the CA.  Fix the problem with the OC and the CA will go away. If your account has already been charged off you need to work with the CA.

If you can afford, the best bet would be  to PFD. The larger the amount of your PFD the more likely they are to work with you and remove your tradeline.  Best case scenario is to PIF but they are trying to settle for almost half so  you may be able to get away with a PFD for 75% - 80%. However, if you can't afford to PFD and need the settlement it may be your only option.. Just make sure you get it in writing.

Once you settle you have no more leverage. Remember, the OC/CA want their money so they are willing to do more for you if you still owe and are wiling to pay.  If they already have their money there is no reason for them to do you any favors. 

[Anonymous]

First, A settled collection is the same as an unpaid collection as far as how fico figures your scores.   Second. If the letter is from a CA and both the CA and OC are reporting, I would try to contact the OC 1st before doing any settlements with the CA.  Fix the problem with the OC and the CA will go away. If your account has already been charged off then you need to work with the CA.

 If you fix the problem with the OC, the CA will not just go away.  If they are already reporting and you pay the OC, the OC only has to have the CA update to a paid collection.  The only way this would happen is if you ask the OC to remove the account from the CA.  It does not happen automatically.    Just because an account has been CO'd does not mean you have to work with the CA.  If the OC sold the debt to the CA, then, more than likely, yes, you would need to work with the CA.

If you can afford, the best bet would be  to PFD. The larger the amount of your PFD the more likely they are to work with you and remove your tradeline.  Best case scenario is to PIF but they are trying to settle for almost half so  you may be able to get away with a PFD for 75% - 80%. However, if you can't afford to PFD and need the settlement it may be your only option.. Just make sure you get it in writing.

Once you settle you have no more leverage. Remember, the OC/CA want their money so they are willing to do more for you if you still owe and are wiling to pay.  If they already have their money there is no reason for them to do you any favors. 

[Paxx]

You would simply provide proof (documents from OC etc.) to the CA that you paid the account in full with the OC and so there is no longer a dept to collect. 

My wording may have sounded as if it would simply poof  and be gone when you pay. No, that''s not the case. but the end result would be the same. It may take some correspondence between yourself and the CA however.

[Anonymous]

If the CA was already reporting, they may continue to report whether the debt is paid or not.  Even if you provide proof that you paid the OC, the CA only has to update to paid.  They do not have to remove the account.

Some may remove it as a GW gesture but they do not have to.

The only time this may work is for a medical debt.

[Paxx]

I was hitting credit repair pretty hard about 18 months ago so there may be some cobwebs.

It doesn't make any sense that  CA could continue to report even though there is no longer a dept to collect on. CA is collecting on behalf of OC until the OC CO the account and considers it as bad dept. When that happen the OC sells the debt and then it belongs to the CA at that time. As we all know, collection accounts can be sold between agencies. I personally had one that switched hands around 5 or 6 times and each time it touched a new agency they reported. My report didn't have 5 different agencies reporting for the same collection, it only had one, the most recent along with the OC.

I remember reading back when I was rebuilding and repairing that you settle with the OC always if possible. If the OC still owns the debt there is no reason for the CA to continue to report - the collection is already paid and settled.  If the OC sold the debt to the CA then yes, they both will continue to report after one has been paid because the CA actually owns that debt.

Could be wrong, like I said, a lot of cobwebs.

[Anonymous]

Yes, you always settle with the OC if possible and have them pull the account from the CA.  If they will not do that the CA can legally report.

Also, even if the OC works with you, all they have to do is forward the money to the CA and have them update the account.

And you again are correct.  One CA and the OC can report on any given TL.  When a CA no longer has the account in their files, they must remove it.  If the OC was paid and the CA still has the file, they can report.  The OC must pull the account back from the CA.

It would make sense to most people that if you paid the OC the CA no longer has anything to collect and must remove it.  But as I said, all they legally have to do is update to a paid status.

Many times people confuse what is done during the HIPPA process and normal every day collections.

[Paxx]

Thanks for clarifying.

This board never ceases to amaze me. Every time you think you know just about it all, you find something else you didn't know