Settling vs Paid in Full

[Anonymous]

Hello

I have an account with chase that will be 180 days delinquent tomorrow and will go to charge off.  It's not much and I was stupid to let it slide but whatever the damage is done. 

So basically, they have closed my account and it shows delinquent reportings for the last 5 months.  I finally contacted them yesterday and they offered me a 50% settlement but the account will state settled or they offered to give me a $175 credit if I brought the account current or paid in full.  If they brought it down another $175 I might just pay it in full if they will send "Paid in Full" instead of "settled" to the bureaus.  The line of credit was only for $1400 and I can pay it in full but I am curious to know if the damage to fico has already been done due to the account being closed and all of the delinquent reports so a settlement wouldn't hurt me and I'd save money or if paying in full would have a significant positive impact on my fico and credit report?

this is going to be charged off after tomorrow so time is of the essence here and I would really appreciate some advice.

[Anonymous]

When they say "Bring the account current," does that mean that they won't close it, or are they closing it either way? If they are going to close it either way I would pay the 50 % settlement amount since the delinquency will be on there any way. The damage is done. If they will let you keep it open, pay it off and use it to rebuild. Maybe if they keep it open they will be willing to remove some of the late payments from your credit report.

[Anonymous]

it's already closed so basically I'm either shelling out $1600 for "paid in full" to be on my credit report or $800 for "settled" in order to keep it from being charged off on the 1st of the year.

[Anonymous]

I don't see any benefit to paying the full $1600 then. A closed account is a closed account. The lates are already there.

[Anonymous]

okay. well hopefully they'll go down a little bit.  If i settle tomorrow will I receive a 1099 for the "gift" for this year or next year?

[MarineVietVet]

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@Anonymous wrote:

Hello

I have an account with chase that will be 180 days delinquent tomorrow and will go to charge off.  It's not much and I was stupid to let it slide but whatever the damage is done. 

So basically, they have closed my account and it shows delinquent reportings for the last 5 months.  I finally contacted them yesterday and they offered me a 50% settlement but the account will state settled or they offered to give me a $175 credit if I brought the account current or paid in full.  If they brought it down another $175 I might just pay it in full if they will send "Paid in Full" instead of "settled" to the bureaus.  The line of credit was only for $1400 and I can pay it in full but I am curious to know if the damage to fico has already been done due to the account being closed and all of the delinquent reports so a settlement wouldn't hurt me and I'd save money or if paying in full would have a significant positive impact on my fico and credit report?

this is going to be charged off after tomorrow so time is of the essence here and I would really appreciate some advice.

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Hello and welcome.

Per FICO scoring, "Settled" is not the same as "Paid in full". In fact, FICO reads all "settled" accounts as charge-offs. However the notation "Paid in Full" does look better to some creditors.

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[Anonymous]

considering the circumstances will "settled" be anymore damaging than a closed account that is delinquent or should I do what i can to get that "paid in full" reported on a delinquent/closed by creditor account?

[MarineVietVet]

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@Anonymous wrote:

considering the circumstances will "settled" be anymore damaging than a closed account that is delinquent or should I do what i can to get that "paid in full" reported on a delinquent/closed by creditor account?

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At this point all you have are late payments (not to diminish the impact of a 180 day late) but if you settle that will be another major derogatory added to your report.

Get it in writing that this will marked "Paid in full" and at some point in the near future I would start a GW (Good Will) letter writing campaign to have those late payments removed.

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[Anonymous]

thank for the help. I spoke with them last night and then again this morning. I'll call them again this afternoon as they appear to be crediting my account a little bit more as time passes.  If they will credit my account by taking off enough late fees and finance charges in which i only pay the principal amount I owe or a bit above it and will agree to report "paid in full" then I will do that.

The other option that they're worried about is that I'll default and it will go to collections(I have not intentions of this happening and have the cash to settle or pay in full but I'm just feeling out what's the best thing they can offer me and what's my best route to go.

My other three cards have no late payments and I will pay those down or off in the next month or two after renegotiating the apr's and credit limits(I paid wells fargo 5k on a card that had 6500 limit) after I paid them they dropped my limit to $1500.  Ha

[MarineVietVet]

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@Anonymous wrote:

thank for the help. I spoke with them last night and then again this morning. I'll call them again this afternoon as they appear to be crediting my account a little bit more as time passes.  If they will credit my account by taking off enough late fees and finance charges in which i only pay the principal amount I owe or a bit above it and will agree to report "paid in full" then I will do that.

The other option that they're worried about is that I'll default and it will go to collections(I have not intentions of this happening and have the cash to settle or pay in full but I'm just feeling out what's the best thing they can offer me and what's my best route to go.

My other three cards have no late payments and I will pay those down or off in the next month or two after renegotiating the apr's and credit limits(I paid wells fargo 5k on a card that had 6500 limit) after I paid them they dropped my limit to $1500.  Ha

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You definitely don't want that. Then you would have a totally new negative showing up.

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".