Dec
I live in Texas.
I have an account in collections that is past 120 days past due. However, at this moment, I have not reached a settlement agreement with the company.
I was informed by the collections agent that only a charge off (and there by making a settlement to pay less than the full amount) would result in the entry being present on my credit report for 7 years.
However, I got my credit report, and it says that the "Estimated date that this item will be removed is: xx/2014." Does this mean that–in terms of damage to my credit–that there would be no additional harm to making a settlement for with the agency?
Also, any additional advice on how you've dealt with credit card debt from your personal experience is greatly appreciated.
The damage was first done to your credit when you were 30 days late on your account. This entry will be removed from your credit report 7 years from the time you were 30 days late and never brought the account current whether you pay it off or not.
Paying the account off the normal way at this point will not increase your credit score. If you have some spare cash and want to settle the account, the best way to do this is make them an offer in writing, and ask them to remove the negative entry from your credit report in exchange for payment. Collection agencies buy debts from creditors for pennies on the dollar, so start with offering 30% of what they are asking for. Not all collection agencies/creditors will agree to do this, but some will.
6 Responses so far to "What's the best way to deal with collection agencies on credit card debt?"
December 2nd, 2008 at 7:12 am
The damage was first done to your credit when you were 30 days late on your account. This entry will be removed from your credit report 7 years from the time you were 30 days late and never brought the account current whether you pay it off or not.
Paying the account off the normal way at this point will not increase your credit score. If you have some spare cash and want to settle the account, the best way to do this is make them an offer in writing, and ask them to remove the negative entry from your credit report in exchange for payment. Collection agencies buy debts from creditors for pennies on the dollar, so start with offering 30% of what they are asking for. Not all collection agencies/creditors will agree to do this, but some will.
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December 2nd, 2008 at 7:36 am
if the collection agency told you it would leave a mark for 7 years then let it charge off.
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December 2nd, 2008 at 8:06 am
Hello. The item stays on your credit for 7 years from the last date of activity/charge off date. It should only stay on there from the date it was charged off. Make sure they give you a letter stating they are accepting settlement as balance in full. I recently had a client that did not get a letter and after a paying a large settlement amount..they still came after him for the remainder of the debt. Also, if you are saving more than 600 off the debt, you will have to report that at tax time. They are supposed to report that to the IRS. The IRS looks at as you are saving more than 600…which adds to your income. Just something to keep in mind.
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December 2nd, 2008 at 8:27 am
Do not, do not and do not have any communication with collection agencies, as they are nothing buy leeches. Once you get a charge off, it will stay on your credit report. Believe me, from personal eperience, you will start receiving credit card offers soon enough again. Try not to repeat the same mistake, cause it is a viscious cycle.
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Personal experience.
December 2nd, 2008 at 9:05 am
Don't pay anything since the seven years have started. If you pay a little at a time the seven years will begin on the "date of last activity". So, for example, if you pay on it for two years and then pay it off then it will be seven years from when you paid it off or 2017!
But then you have to worry if they are going to court to get a judgment. That judgment will be on for seven years depending on the state in which you live. Then they may be able to renew the judgment for up to ten years from the first judgment. Then the debt will be on your credit report until 2018! If you don't pay this debt it then look out for that judgment!
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December 2nd, 2008 at 9:32 am
creditinfocenter.com
buddhibbs.com
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