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Removing an old Charge Off

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Removing an old Charge Off

I have an old debt, first deliquent is February 2013. It is still showing as a charge off on my credit. I was thinking to send them a letter and request payment in leiu of removal of the charge off. Is there any bad that can come of me sending the letter? Otherwise it should fall off shortly correct? The debt was from when I went through a messy divorce and I had to pay what was vital. No other bankrupties, repo's, or collections on my credit. I have slowly paid back everything but this old charge off, but I would like to move on with my life and get this off. 

8 REPLIES 8
Established Contributor

Re: Removing an old Charge Off

If its reporting monthly it won’t affect you more than it already is. If you pay it it could give your some points and it will still fall off next year.






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Message 2 of 9
Regular Contributor

Re: Removing an old Charge Off

What agency has the debt, some are known to PFD.  Its always good to pay the debt, however if its not reporting monthly you might want to wait until it falls off then pay it.

Message 3 of 9
Valued Contributor

Re: Removing an old Charge Off

HI Busymom,  welcome to the forums!

 


@BusyMomof2 wrote:

I have an old debt, first deliquent is February 2013. It is still showing as a charge off on my credit. I was thinking to send them a letter and request payment in leiu of removal of the charge off. Is there any bad that can come of me sending the letter? Otherwise it should fall off shortly correct? The debt was from when I went through a messy divorce and I had to pay what was vital. No other bankrupties, repo's, or collections on my credit. I have slowly paid back everything but this old charge off, but I would like to move on with my life and get this off. 


 

It depends...

 

When was the last time the tradeline was updated? 

  • If it's being updated monthly, or has been updated very recently, then poking the bear by sending a PFD (pay-for-delete) request won't have much of an effect, if any, on your scores. 
  • If the account has not been updated in a long time,  I suggest you leave it alone and let it fall off.  If you seek a deletion at this time, the debt holder may be inclined to decline your request and/ or update the tradeline on your reports with delinquent status' -- which will negatively affect your scores. 
    • Caveat:  IF the account is still reporting a balance -- Outstanding debts are factored into your overall credit utilization.   Depending on how much you owe, if you pay the debt now, it may help your scores if payment of the debt to a $0 balance significantly reduces your utilization, causing it to drop below a scoring threshold.  This gain in points may be more than the loss of points from updating the tradeline. 

 

Who currently owns the debt, the original creditor or a collection agency?    

  • If the charge-off currently shows an outstanding balance, the original creditor still owns the debt (although collection authority may have been assigned to a 3rd party agency). 
  • If the charge-off is showing a $0 balance, then the account has been sold.    If this is the case, is there a collection tradeline also showing on your reports in addition to the original charge-off? 
  • If the original creditor still owns the debt, it is unlikely you will succeed in negotiating a PFD arrangement; PFDs usually work best with collection agencies.   However, if you tell us who the creditor is, we can give you a more definitive answer as to how they respond to PFD requests. 
  • If the original creditor has sold the debt, then asking for a PFD is pointless, as they can no longer accept payment.  You could, however, try sending a Goodwill letter and request removal as an act of goodfaith.  

 

You're looking at Feb. 2020 for removal from your reports.  If I were you, I'd probably just wait until the account is eligible for an Early Exclusion (EE) from the bureaus.   Upon request, Transunion will typically delete negative tradelines up to 6 months early (so Aug. 2019),  Experian 3 months early (Nov. 2019),  and Equifax 1 month early (Jan. 2020). 

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Message 4 of 9
New Visitor

Re: Removing an old Charge Off

The orginial creditor is reporting it as "failure to pay" each month. It does not appear that it has been sold as the original creditor is the only listed "person". The orginial creditor is Citizens One. 

 

My goal is to ideally pay a portion of the debt and have the charge off deleted. If I can not have that deleted then I guess I should just let it roll off. I figured that it would be better on the creditor's eye to get some of the money and be done with me.

 

Do I need to do anything for the early excustion you refer to?

 

I really appreciate your very detailed response. 

Message 5 of 9
Regular Contributor

Re: Removing an old Charge Off

Since they are updating monthly, yes send them a settlement offer for deletion, it might work since its so old.  If they dont accept then try full pay for delete.  If they dont accept that, then you have to make a choice of paying letting your score recover from them not updating until it falls off, or just letting it fall off.    

Message 6 of 9
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New Visitor

Re: Removing an old Charge Off

What do I need to do for the early excusion to get it removed?  Here is a copy of the letter I was going to send: 

 

"Dear Account Manager:

 

This letter is in response to your credit report entry on February 2013 related to the debt referenced above. I wish to save us both some time and effort by settling this debt.

 

Please be aware that this is not an acknowledgment or acceptance of the debt, as I have not received any verification of the debt. Nor is this a promise to pay and is not a payment agreement unless you provide a response as detailed below.

 

I am aware that your company has the ability to report this debt to the credit bureaus as you deem necessary. Furthermore, you have the ability to change the listing since you are the information furnisher.

 

I am willing to pay $xxx as settlement for this debt in return for your agreement to remove all information regarding this debt from the credit reporting agencies within seven calendar days of payment. If you agree to the terms, I will send certified payment in the amount of $xxx payable to Citizens One in exchange to have all information related to this debt removed from all of my credit files.

 

If you accept this offer, you also agree not to discuss the offer with any third-party. If you accept the offer, please prepare a letter on your company letterhead agreeing to the terms. This letter should be signed by an authorized agent of Citizens One. The letter will be treated as a contract and subject to the laws of my state.

 

As granted by the Fair Debt Collection Practices Act, I have the right to dispute this alleged debt. If I do not receive your postmarked response within 10 days, I will withdraw the offer and request full verification of this debt.

 

Please forward your agreement to the address listed above."

 

 

Which is basically a blank I found online

Message 7 of 9
Member

Re: Removing an old Charge Off


@BusyMomof2 wrote:

What do I need to do for the early excusion to get it removed?  Here is a copy of the letter I was going to send: 

 

"Dear Account Manager:

 

This letter is in response to your credit report entry on February 2013 related to the debt referenced above. I wish to save us both some time and effort by settling this debt.

 

Please be aware that this is not an acknowledgment or acceptance of the debt, as I have not received any verification of the debt. Nor is this a promise to pay and is not a payment agreement unless you provide a response as detailed below.

 

I am aware that your company has the ability to report this debt to the credit bureaus as you deem necessary. Furthermore, you have the ability to change the listing since you are the information furnisher.

 

I am willing to pay $xxx as settlement for this debt in return for your agreement to remove all information regarding this debt from the credit reporting agencies within seven calendar days of payment. If you agree to the terms, I will send certified payment in the amount of $xxx payable to Citizens One in exchange to have all information related to this debt removed from all of my credit files.

 

If you accept this offer, you also agree not to discuss the offer with any third-party. If you accept the offer, please prepare a letter on your company letterhead agreeing to the terms. This letter should be signed by an authorized agent of Citizens One. The letter will be treated as a contract and subject to the laws of my state.

 

As granted by the Fair Debt Collection Practices Act, I have the right to dispute this alleged debt. If I do not receive your postmarked response within 10 days, I will withdraw the offer and request full verification of this debt.

 

Please forward your agreement to the address listed above."

 

 

Which is basically a blank I found online


 

I'm quite late to the conversation but I'm wondering does anyone have any opinion on this letter?  

@BusyMomof2 - Did you send this lettter?  Did you have any luck?

Message 8 of 9
Legendary Contributor

Re: Removing an old Charge Off

I would not impose a 7 day period as stated in paragraph 4, as it is very short and could result in lack of adequate processing and review time.

I would also leave out paragraphs 5 and 6 in their entirety.

 

Contract law covers any agreement on their part without any need to place restrictions in your offer.

Additionally, if more than 30 days has expired since their dunning notice, then you no longer have debt validation rights under FDCPA 809(b).

 

I would keep it simple, and confined to your offer without unnecessary restrictions that may annoy or delay.

Message 9 of 9
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