Settlement of chargeoff with Discover card?

[ScottL]

I have an old charge-off from Discover from 2012 when I was going through a divorce. Long story, but this bill went unpaid.

It is now been 3 years, and I called to see my options. She said they would do a settlement of $1700 (balance is near $6000) and they would accept payment of $141 for 12 months.  Then it will show paid for less than owed, etc.

my question is in regards to my credit score and getting approved for future loans.  How bad is this 3 year old collection affecting me now? Will paying off in a settlement increase my score at all?  or will it not have any impact whatsoever when a creditor is lending me credit?

any chance of getting it removed with a GW letter after paid by chance? anyone done this before with Discover?

[Anonymous]

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@ScottL wrote:

I have an old charge-off from Discover from 2012 when I was going through a divorce. Long story, but this bill went unpaid.

It is now been 3 years, and I called to see my options. She said they would do a settlement of $1700 (balance is near $6000) and they would accept payment of $141 for 12 months.  Then it will show paid for less than owed, etc.

my question is in regards to my credit score and getting approved for future loans.  How bad is this 3 year old collection affecting me now? Will paying off in a settlement increase my score at all?  or will it not have any impact whatsoever when a creditor is lending me credit?

any chance of getting it removed with a GW letter after paid by chance? anyone done this before with Discover?

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I would certainly take that settlement deal. Paid is always preferrable to unpaid, regardless of scoring effect.

The unpaid balance is most likely skewing your UTI and you would most certainly benefit scorewise if thats the case.

[RobertEG]

If they accept a settlement, I would first counter with requesting their agreement not to report paid/settled for less to the CRA.

If you settle, regardless of the amount, the debt is discharged, and they must update the balance to $0.

However, if you settle for less, they can additionally report a special comment of paid/settled for less, which posts that fact in your file for all to see.

That informs others that you have a past pattern of not paying the entire debt that you obligated.  That means the creditor took a loss in dealing with you.

That is never a favorable comment when a future creditor is making a lending decision.

You can attempt to obtain their agreement not to report that special comment.  Your credit report will then read the same as if you had paid the debt in full.

[ScottL]

anyone have any experience with Discover?  any chance they will do that and just mark it as paid?

[ScottL]

bump

[LShan82]

I don't know how they will handle it, but I do know that Discover would not settle with me and took me to court. I had a judgement on my report for 7 years. You definitely don't want it to get to that point.  So take the settelement, and maybe do a good will letter? 

[ScottL]

she did tell me its been too late for them to do anything, i guess its past that point time wise? but she did say if i enter into an agreement and make a payment, the time starts over? 

She emailed me the agreement, i have not signed it or made a payment yet. But it does say in the agreement that it will be updated as paid for less than owed.  Any chance I can still get this changed before i sign the agreement?

also, if time does start over. once i make a payment or pay this off and its showed as paid, does that mean i have to wait another 7 years for this to go off my credit, or would it still be 7 years from the beginning?

[ScottL]

called her back and asked if i could have it show as "paid" and she advised me that is illegal. if i want it to say that, i have to pay it in full.

[gdale6]

COed derog accounts can only remain on fle fr a max of ONE 7.5 year run and thats it even if you pay it off and as for it to say paid if full you would have to settle in full though I would just settle and take the settled for less, Fico doesnt care only human underwriters may ask about it. As far as SOL if you enter into a payment arrangement and then re-default on it then that resets the SOL and they can once again use the courts to obtain a successful judgment but nothing resets unless a new default happens.

[deweydecimizer]

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