Settlement Offer

[pt145]

The time has come to settle up with a Collection Account that I've been ignoring for about 4 years now (SOL Is 6 years) . I'm soon to be a new father in May & this has encouraged me to look into buying a house for the first time. This leads me down the path of riding myself of past due obligations.

I left a apartment in November 2008 with 2 months left on the lease, I tried negotiating when I left but they wanted around $2000 ($600 mo + concessions)to break the lease free & clear. This was unaffordable to me so I walked away. In February 2011 I received a letter from US Collections West stating my current balance was $4000 & they were willing to settle if I contacted them. I ignored it. This account is currently only reported to Experian in the amount of $3605 last updated January 2011.

My Goal is to settle this account for no more than $2000, keep it from reporting on on Equifax & TransUnion & bonus have it removed from Experian. When I send my  Settlement / PFD offer should say I'm willing to pay $2000 or should I go lower in preparation for a counter offer?

[rckstrscott]

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@pt145 wrote:

The time has come to settle up with a Collection Account that I've been ignoring for about 4 years now (SOL Is 6 years) . I'm soon to be a new father in May & this has encouraged me to look into buying a house for the first time. This leads me down the path of riding myself of past due obligations.

I left a apartment in November 2008 with 2 months left on the lease, I tried negotiating when I left but they wanted around $2000 ($600 mo + concessions)to break the lease free & clear. This was unaffordable to me so I walked away. In February 2011 I received a letter from US Collections West stating my current balance was $4000 & they were willing to settle if I contacted them. I ignored it. This account is currently only reported to Experian in the amount of $3605 last updated January 2011.

My Goal is to settle this account for no more than $2000, keep it from reporting on on Equifax & TransUnion & bonus have it removed from Experian. When I send my  Settlement / PFD offer should say I'm willing to pay $2000 or should I go lower in preparation for a counter offer?

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Well, PFDs are less successful when you cannot pay in full, but it is always worth the opporunity,, 

However, here is the thing. If you start negotiating, they might just report on the other ones anyway.

I was in a similar position; I was denied a PFD so I just settled for the lowest possible. Its an older account, and if yer scores already support the mortgage prospect the only think you need is to have this debt settled.

I wouldn't worry about putting in too many stipulations. I would send a simple settlement PFD asking for deletion. The more you offer, the better your odds. But if you don't get the PFD, settle as low as you can and then try a GW later.

-scott

[pt145]

Well credit score wise I purchased a car in November 2012 & my scores from the lender were EX680, EQ & Trans were both around 710 not sure on exact number nor am I sure if there were Auto Enhanced (first car besides HSBC motorcycle loan). I think I'd be taking a nice hit if they were reported to EQ & Trans so my median score would be less than ideal.

[rckstrscott]

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@pt145 wrote:

Well credit score wise I purchased a car in November 2012 & my scores from the lender were EX680, EQ & Trans were both around 710 not sure on exact number nor am I sure if there were Auto Enhanced (first car besides HSBC motorcycle loan). I think I'd be taking a nice hit if they were reported to EQ & Trans so my median score would be less than ideal.

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Yeah -- or...

You could not deal with it until you close. That is what your LO would tell you to do anyway... There is still that risk they will report to the other two, but you could just apply for the mortgage, get preapproved, and they will require that is settled prior to closing..

only caveat is they will likely know you are apping and will take less cause they know you will have to pay it.

you are in a scenerio that has many outcomes.. I would personally just call up and see what they will settle for, sans PFD and roll the dice with a GW later... the less action on the account; the less likely they are to report... they use reporting as a means to procure payment.. if you pay, they have no reaosn to report to the other two.. just like if you pay, they will have no reason to care if you app for a mortgage

they might, or course, but that might be a risk you need to take

-scott

[pt145]

Well yesterday I drove over to the Apartment Complex with a hope that they still owned the debt. I worked my way through the rabid receptionist to a gentleman in middle management. I told him I was a former tenant that wished to settle a debt, he immediately referred me to the CA. I fibbed & told him I didn't want to deal with them due to a bad experience. He asked if I was disputing the debt or wished to settle, I told him I had $2,000 to settle the account and have it removed from my credit reports. He called the CA requested my original balance and current balance ($4300). He left the room to speak with his boss, after about 10 minutes he returned. He stated that they have a contract with the CA  to collect debts & they were going to accept the offer of $2,000 to settle & remove but I had to pay the CA so they could get there cut. He gave me the Ext. to a manager at the CA said to tell her the deal & to verify the settlement with him via e-mail.

I spoke with the CA told them of the settlement & made arraignments to come in that afternoon. When I arrived at the CA I reviewed the settlement agreement, it stated settled in full and made no mention of the deletion so I asked it be added. I told her that the apartment manager agreed to deletion upon payment & it should have been relayed to her. She stated that it was not possible, the company has a contract with the credit bureau to report information & it can't be removed, etc. I threatened to withhold payment based on the fact that her client agreed to deletion, she stated he misspoke incorrectly because he was unfamiliar with the reporting process. After a few minutes of mulling this over I handed over payment in hopes of going back to the apartment manager with information that this is indeed possible & she was just being stubborn. Hopefully they only update to EX & not the other 2 CRA, risky business....

I guess now I'm going to draft a good will letter to the apartment manager & try to be convincing enough to get him to (firmly) request deletion of the account. Can any of you nice folks help me with some suggestions? 

[Eterion]

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@pt145 wrote:

Well yesterday I drove over to the Apartment Complex with a hope that they still owned the debt. I worked my way through the rabid receptionist to a gentleman in middle management. I told him I was a former tenant that wished to settle a debt, he immediately referred me to the CA. I fibbed & told him I didn't want to deal with them due to a bad experience. He asked if I was disputing the debt or wished to settle, I told him I had $2,000 to settle the account and have it removed from my credit reports. He called the CA requested my original balance and current balance ($4300). He left the room to speak with his boss, after about 10 minutes he returned. He stated that they have a contract with the CA  to collect debts & they were going to accept the offer of $2,000 to settle & remove but I had to pay the CA so they could get there cut. He gave me the Ext. to a manager at the CA said to tell her the deal & to verify the settlement with him via e-mail.

I spoke with the CA told them of the settlement & made arraignments to come in that afternoon. When I arrived at the CA I reviewed the settlement agreement, it stated settled in full and made no mention of the deletion so I asked it be added. I told her that the apartment manager agreed to deletion upon payment & it should have been relayed to her. She stated that it was not possible, the company has a contract with the credit bureau to report information & it can't be removed, etc. I threatened to withhold payment based on the fact that her client agreed to deletion, she stated he misspoke incorrectly because he was unfamiliar with the reporting process. After a few minutes of mulling this over I handed over payment in hopes of going back to the apartment manager with information that this is indeed possible & she was just being stubborn. Hopefully they only update to EX & not the other 2 CRA, risky business....

I guess now I'm going to draft a good will letter to the apartment manager & try to be convincing enough to get him to (firmly) request deletion of the account. Can any of you nice folks help me with some suggestions? 

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Unfortunately "agreements" mean very little unless in writing. That's why the contract you read stated that the collection will be considered paid in full - but conveniently left out that the CA would delete the report.

Your firepower was the payment - which is now in the hands of the CA. You should not have provided payment and should have just left the building then and there. Now, you are at their mercy, considering that you've already given them payment.

I really cannot think of anything positive to tell you, unfortunately, in the world of financial services, its very important to have any "special" terms or agreements in writing - as word of mouth holds very little credibility, since it all spirals down to a game of he-said, she-said.

Hope the middle manager guy helps you out, but again, the money is already in the hands of the CA, and the contract did not state they needed to delete the report.

[pt145]

I didnt think it was in my best interest to walk out since I was still within the 6yr SOL, It had to be settled maybe for more maybe for less, I'll never know now. She didnt budge a bit even though I bluffed about leaving & paying my CC's. It is what it is, not a perfect world. 

[guiness56]

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@pt145 wrote:

I didnt think it was in my best interest to walk out since I was still within the 6yr SOL, It had to be settled maybe for more maybe for less, I'll never know now. She didnt budge a bit even though I bluffed about leaving & paying my CC's. It is what it is, not a perfect world. 

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I agree with what you did.  In a perfect world for rebuilders, they would have given a written agreement and had it deleted.  Sometimes they just won't.  She was correct in stating they have a contract with the CRA and the CRA says an account can't be deleted due to payment alone.  It is done all the time but, in an instance like this, you do what you feel is the right thing to do.

You settled the debt, you don't owe any more on it, and you can breathe and not worry about getting sued.