Score up or down for paying less than owed

R2P2home · ‎02-28-2013

I have been learning a lot from all the great people that share their knowledge in here and thank you for that.i am sure if I went back through posts I could find the answer to this but before I go making a big mistake I have an old second mortgage from GMAC with a balance of 3,200 and they offered 600.00 to settle,now of course there's a catch they will do it as "settled for less than owed" with a 0 balance now I would think it would help because it subtracts from past due balances that shows on my report but will it hurt more because it's less than owed,FYI GMAC will not budge on how they report it either!!!

Shogun · ‎02-28-2013

It will make a difference on a manual review of your CR. Also you have to be aware of the chance of the dreaded 1099C for any debt forgiven in excess of $600.

Starting Score: 504
July 2013 score: EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
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Current scores after adding $81K in CLs and 2 new cars since July 2013
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R2P2home · ‎03-02-2013

Yes they definitely made sure they included about receiving a 1099 on amount owed.Should I try and haggle with them because they have added tax and late fees and on cr it says 3,200 for amt past due but then it says 6,031 for mortgage balance.it just really kills me because the original loan was for a second mortgage of 32,000 we had it all paid off except for 3,200 my credit score at the time was 721 they wouldn't work with me when I needed offering smaller payments when I lost my job now they want to settle for 600.00,I don't want score to drop but GMAC is not budging as far as what they will report!!!

R2P2home · ‎03-02-2013

Has anyone else in here had any kind of luck with GMAC and if they did can you please share your experience because I am getting nowhere!!!!I also have old bad cc debt for Capitol one and it's from 07 should I wait that out or try to settle because I think it may be affecting my utilization-please help!!!