Discover settlement offer

valley_man0505 · ‎12-16-2008

A few months ago, a CA contacted me in regards to an old Discover CO. I DV'd them, and, eventually, Discover responded to the DV with actual photocopies of the checks I used to make payments on the account when it was open. So, it is definitely mine and it ia also in SOL.

I have not heard anything from them since they sent the verification until yesterday when I received a settlement offer direct from Discover (it seems that the CA is not involved at all anymore and they never reported--Disc is reporting). The offer said they would accept 25% of the outstanding balance if I accept the offer within 15 days of the date of the letter. Of course, the date on the letter was already a week ago, so I don't have much time. Obviously, this a deal I would like to take advantage of (especially considering how many times I have been summoned to court for other debts this year where I ended up having to PIF). However, money is very tight right now since it is Christmas and also because my girlfriend has been out of work for 2 weeks due to an emergency surgery, so I have had to pay her bills and support her infant son for the past few weeks and it will take a while to get caught back up.

How should I handle this? Would they be satisfied if I called to accept the offer but I had to wait until mid-January for the payment, or will they actually need payment within 15 days of the date on the letter for it to be valid? They gave me a number to call to accept the offer and I know that conversation will consist of them doing everything possible to make me pay right over the phone.

Also, any additional wording I should look for in the settlement to make sure I am protected? It says that the account will be satisifed with acceptance of the offer and they will report to the CRA's that the "account was settled for less than the full amount" (I'm not too crazy about that notation, but is there anything different II could even ask for?). Perhaps it would be better if they just didn't update their reporting and I just held onto the proof that is was paid to submit with manual credit reviews. The CO occured 5 years ago, and they haven't been updating their reporting, so I am worried that updating it will bring my score down even though it is a positive update. It is scheduled to fall of in 2010 I think.

Any advice would be appreciated.

Anonymous · ‎12-16-2008

One thing you could do is negotiate with Discover and offer a settlement with 2 monthly payments. Pay half this month and the remaining in mid January to satisfy the deal. You will need to do lots of persuasion for this. Most creditors or CA would be pretty lenient when it comes to breaking up the settlement into 2 payments within a month. If you can somehow give them a good will payment for this month, I think they might bite. Keep in mind that if they were to break it up into 2 months, they might increase your 25% settlement to lets say.. 35% if you were to do a 2 month plan. There is always room for negotiation when it comes to creditors and collection agencies.

Also, rather than having them report settled for less, perhaps you can also negotiate for a reinstatement of the account? Hope that helps a bit.

valley_man0505 · ‎12-16-2008

chopbrocoli-I'd love to try for reinstatement of the account. Unfortunately, the timing does not make that too likely. I have 10 different med collections that are showing up on my reports (they should drop off any day now, though

). I also have a judgment that I am hoping to get rid of. I convinced the judge to reopen the case since I found out afterwards that the lawyer sued me even though his client (NCO) had actually closed the account months earlier. My hearing is Monday. If I had those med collections and judgment gone, maybe I would have a chance to ask for reinstatement. Who knows, maybe I could still get lucky.

Ned505 · ‎12-16-2008

V_man,

I completed two 50% settlements this year, and a 25% settlement seems quite good. I have not heard of a OC initiating the deal, though. That's new to me.

I would try to negotiate the time with them. Get it in writing. I would suggest calling them and asking for a correspondance address and fax number.

Yes they will try to get you to "pay on the spot" but don't. Fax them an "acceptance" letter. Reference their offer letter and such, and put the date(s) and amounts you will pay.

Example: I accept your offer, blah, blah, as referenced in your letter dated xx,xx,2009, and I will send you payment according to the folowing schedule:

Jan, xx, 2009 $ xxx

Feb xx 2009 $ xxx

Secured funds will be provided in the form of cashiers check's......blah

Ask them to delete the Trade Line.

Always ask. You should always ask for more,

Good Luck.

Message Edited by Ned505 on 12-16-2008 05:57 PM

Anonymous · ‎12-17-2008

Paying off in full is so much better on your credit than settle for less than full.

Settling less than full shows up on your credit report for 7 years and affects your score negatively.

One weird/good thing about discover is that they will wipe out your delinquency history even if you settle.

It happened to me. I settled and couple months later, it was not listed under negative item on my credit report and they reported everything as being on time or current. I'd say if there's a big difference between the full amount and settlement amount, I'd take it but you must remember that it will show up on your credit report.

Anonymous · ‎12-17-2008

rudals1281 wrote:
Paying off in full is so much better on your credit than settle for less than full.
Settling less than full shows up on your credit report for 7 years and affects your score negatively.

One weird/good thing about discover is that they will wipe out your delinquency history even if you settle.
It happened to me. I settled and couple months later, it was not listed under negative item on my credit report and they reported everything as being on time or current. I'd say if there's a big difference between the full amount and settlement amount, I'd take it but you must remember that it will show up on your credit report.

The account in question is already a CO, settling isn't going to change that. It is going to remain a negative account for 7 years anyhow, whether settling or paying in full. PIF always looks better on a manual review tho.