I presume that the loan is now delinquent, and that the OC has reported some type of adverse items, such as monthly delinquencies and/or a charge-off?
With the statement that their lawyer is now "handling the account," is he/she a debt collector, or merely calling as a legal rep of the OC?
I see several possible options on the part of the OC, over which the consumer may have little or no control, such as bringing legal action if still within SOL, charging-off the debt if they have not yet done so, the reporting of a collection if the atty is a debt collector, or selling the debt to another debt collector, who would then be likely to report.
Making a PFD offer is, of course, always an option. It is an attempt both to satisfy the debt, and to delete any adverse items reported to your credit file.
But acceptance is totally up to them, and if they have other options, they may take them. Meanwhile, you sit in limbo, having made an offer that they can refuse or ignore, and other options than can choose to take.
Holding out for the home run of both debt satisfaction and credit report deletion is a personal risk dependent upon what options you guesstimate they might take.
Since the debt is relatively small, they may not wish to take their own risk of agreeing to credit report deletion based on payment, which is an action contrary to their credit reporting agreement with the CRAs.
Personally, I see the potentiall risks as out-weighing the benefits of holding out, and would pay and then pursue request for GW deletion of whatever adverse reporting remains in your credit file.
