Settling Credit Card Accounts with a Collection Agency After Charge Off
Credit card accounts have not been paid for a while and now collection companies are calling. I settled one late bill with my bank and I am now tapped out. Can I settle with collectors after charge off?
How to deal with a debt collector after accounts charge off?
—Pay collections
Short answer
Yes. Settling a credit card debt after charge off, once a collection agency is contacting you, is always an option. Sending the account to a collection agency is the most common thing a creditor does with a newly charged off balance, and that agency can negotiate within the limits your original creditor sets.
Key points on this page
- Charge off comes after the first stage of collection calls from your original creditor, which can last six months.
- Creditors have 3 options when they charge off a defaulted account. Placing it with a collection agency is the most popular one.
- Most of this work is done on contingency, so the agency only gets paid if you pay. Your account may sit with one agency for a limited window.
- The agency can only agree to what your original creditor allows, or to what it can go back and get approved.
- You cannot re-age a charged off account. The credit reporting damage was done by your bank, and the collector has no control over it, whatever they suggest on the phone.
- You will have to pick up the telephone to learn your real options. A debt validation request at this stage is often counterproductive to a settlement goal.
Yes, settling a credit card debt after it has been charged off and a debt collection agency is contacting you for payment is always an option. Below is an edited version of an article we published that explains “Charge Off” and what typically happens with your unpaid accounts after they are considered seriously delinquent and the unpaid balance is assigned to an outside debt collector. Settling the debt may be just the opportunity you need to move on with your finances and restore your credit.
For your unpaid credit card to reach charge off, you will have already been through many collection calls from your original creditor. The first stage of collection calls can last six months.
Creditors have 3 options available when they charge off defaulted credit card debt. The most popular option with newly charged off accounts is to send the debt to a collection agency.
Credit Card Debt Sent to Collection Agencies are Mostly Done on Contingency
The amount of time your account remains with an assignee debt collection agency will vary. Let’s assume that the agency that has your unpaid credit card bill will only have the ability to collect from you for 90 days.
The typical debt collector working for your creditor has two ways they attempt to get you to pay; your phone and your mailbox. There are other ways to collect, such as:
- Collection calls to your job,
- Debt collector calls to family members and friends (this does happen – it sucks and is embarrassing).
Lets focus on the most general efforts used by the debt collector who is collecting on your account just after charge off. When a debt collector gets assigned your account, you will often start getting collection calls (at a high volume). You should also get a collection notice in the mail within a week of the agency having contacted you by phone.
You do not have to pick up the collection calls if you are not ready to negotiate a settlement with the agency. My suggestions for speaking to a third party debt collector are not the same as picking up, or making calls out, to your original credit card lender. And you do not necessarily need to send a debt validation request in response to the collection notices you receive in the mail. That is often counter productive to your settlement goals.
Settling an Account with a Collection Agency
Some important details to consider:
- You will have to pick up the telephone in order to learn about your options with the account. I typically recommend that you not limit yourself to written communications with collection agencies.
- You will be speaking to someone who has been trained to push your buttons using the most effective and proven methods for collecting unpaid debt.
- The agency can only work out arrangements for payments that your original creditor allows them to, or where the debt collector can go back to your creditor and get approval.
- You will not be able to re-age the account when settling charged off accounts with debt collectors (the credit report damage is done by your credit card bank, the debt collector will have no control over that).
- Avoid some of the nut job advice on the internet about handling this stage of collection.
- In some ways, you have more payment term options you can negotiate with a collection agency than you would be able to with your bank.
- The collection agency only gets paid if they can get you to pay them (that may not always be the case, but contingency debt collection is the most common model currently).
Charged Off Debt Get Reported to the Credit Reporting Agencies
When this derogatory credit reporting happens the damage to your credit is done. You do not get to re-age charged off accounts. The credit damage from not paying a charge off account can then only get worse if you are sued, followed by getting a judgment against you. The judgment then shows up in the public record section of your credit report. Also, another debt collection trade line may later show up on your credit reports, and this would be considered additional damage.
A debt collector may comment how you should be concerned with your credit report and credit score after the account they are collecting on gets charged off, but this is just a collection tactic. Collection agencies will have no ability to change how the original credit card issuer reports to Equifax, TransUnion or Experian that your account was charged off.
There are tactics and timing I share on this site, and when you want to work with me one on one, that will better prepare you for dealing with outside debt collectors. You can optimize your results by knowing:
- How to negotiate a settlement deal that is timed with internal goals the collection agency has, and even that an individual debt collector may have.
- When to pass on an offer to settle that is too high without being concerned your particular debt collection agency will sue.
- What your bank will allow the collector to do (how low a settlement can get and what payment terms are common).
- The tricks and tactics that will be used to get you to pay more than you may have needed to.
- Collection abuse tactics.
If you are struggling with several credit card debts that are past the charge off stage, you should learn about your options and identify resources for handling the accounts before they end up in more advanced stages of collection which can include being sued.
It is important that your next step to deal with your now charged off debt be the step you take to put the debt to rest before the situation can deteriorate further. If you are serious about resolving unpaid debts and want to develop a workable plan, getting started is easy. Just post more about your situation in the comments below, and lets go from there.
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About Michael BoveeMichael started CRN in 2004 with a mission to provide people in need with detailed debt and credit help and education. Michael has participated as an expert panelist in federal consumer protection rule making, collaborated on state law changes governing debt consolidation, has worked as an expert witness in court matters related to the debt relief industry. He is available to speak with you about your financial struggle and helps people resolve their debt problems daily.
I have $10,000 in credit card debt. Mostly, Comenity. I recently lost my job, payments have been late a few months. I cannot afford payments. What are my options? We own our home but I cannot get a loan or borrow against house as a friend purchased for us and we paid him.
You can look to settle with Comenity, the debt collectors they later use, or sell your accounts to. You could save half or more on the balances.
Also, you may want to look into how chapter 7 bankruptcy could help you eliminate these, and other debts.
Wouldn’t that no against my home? Could I lose my home? I can’t tell my husband. He is ill.
I called Comenity to apply for their hardship program. I am terrified to end up in collections. I can manage the smaller payments for one year and hopefully can pay off sooner once I find employment again.
I was afraid to jeopardize my home where I owe private party $80,000. I didn’t think chapter 7 or 13 were really an option without losing more.
What do you think?
I don’t typically like bankruptcy for debts that total 10k or less. Not when you consider you can avoid it by settling for 50% of the balances or less. That means you file chapter 7 over 5k or less, and lose the ability to file for 8 years.
You can often get longer term payment plans than what the banks offer by consolidating debt through a nonprofit.
If you were sued and a judgment entered you could end up with a lien on the home. You can avoid that by settling with them proactively, or in reaction to having been sued.
That lien would not cause you to lose your home. But you would need to deal with eventually.
My parent have $11,000 in Discover credit card debt. Most of the debt is accumulated interest. Actual expenses on the card were about $1500 around 5 years ago. SOL is 6 years. His only source of income is security benefits and wife is disabled. He is 85. Discover has offered to settle for 40%. Should we jump on this offer or let it go to collections?
It will not get much better (the settlement amount) if you let it go to collections. If your goal is to settle and put it behind them, this is a good time to do it. Be sure to get everything in writing before you pay.
I have 4 credit cards with various department stores all being under Comenity bank. I live in NC. Last payment on all of them was Jan, 2012. The total of all 4 combined is $2681. I want to improve my credit score. I already own a home and car so I’m not looking for new credit just would like to know the best way to handle this. Do I call and offer to settle with deletion on my credit report? If so where should I start my negotiation amount? Do I just not do anything and wait until the 7 year mark? Thank you in advance for any guidance you can give me.
If you want to clean up your credit now, rather than wait 3 years, I would suggest negotiating settlements. Call Comenity and find out who they have your accounts out with for collection, or who they may have sold the accounts to, and post those details. I can help you from there.
In my late teens, I opened a Capital One credit card and ran into tough times.. I stopped making payments In 2010, I pulled my credit report from all 3 agencies. In that report on all 3 CRA’s, I had a Capital One cc scheduled to be removed in 2011 at the SOL for reporting. 3 months ago, I pulled all three reports and the Capital One account, now owned by MCI (collection agency), is showing a drop off date of 2018. It was re-aged on the year that it was scheduled to drop off of my credit! I sent a request for validation. They sent me a spreadsheet print out that says my FDOD was in 2011 so it’s been updated on my credit reports as “verified”, but how?? That’s a lie. It’s only $501 & I’m sure I could pay it, but if I do I’m afraid it will guarantee it will stay longer. It should’ve been gone years ago! The problem is, I closed the bank account I would’ve made the payments with long past my the date of my last payment, I don’t have any records or bills from that long ago, I can’t find the credit report that I’d pulled with the correct 7 yr SOL date on it that I’d pulled in 2010, and I don’t know when the exact date was of my last payment, so how do I prove the TRUE date first date of delinquency to get this illegal collection deleted? I’m afraid to talk to Capital One OR the collection agency for fear that I will just make it worse or start the clock over somehow. What should I do?
Left a period off after “stopped making payments”. I know it was between 2005-2008 when I stopped making payments.
*Midland Credit Management, not MCI
You can call Midland and explain everything you are telling me. That will not cause any harm.
I would file a debt collection and/or credit reporting complaint with the CFPB against MCI. Review that article for more about why and what to expect.
Let me know the outcome.
I have a total sport account. I did not pay for several months because of unemployment. I forgot to change my particulars so I never received any calls since I had a new number. I’m done paying it now but it’s charged off. Does it mean I will struggle when applying for a job even though I finished paying? Am I black listed? I really need to know
No, you are probably not black listed. Check to make sure they updated your credit reports to show the account is paid to zero and a resolved collection. Let me know if it isn’t and lets go from there.
I have a few accounts that have gone into collections as recent as September, My debt spans across 9 cards in the amount of 10,000 give or take a few hundred. I want to start settling them, but it is impossible to do so many at once until at least February. Is there a likelihood that I would be sued before then?
Post a list of your creditors and the approximate balance on each. If you are already hearing from third party collectors, identify who and for which account.
I can offer the detailed feedback you need once i have those details.
How do subprime credit card companies (I.e first premier, mid Atlantic bank, first savings bank, etc. handle delinquent credit card accounts varying from 300-700 dollars each
They often sell those accounts off to debt buyers.
Besides the obvious damage to credit and future consequences, is the likely hood of a lawsuit from the debt buyer high on such a low amount of debt and with no personal assets other than income of $20000 and benefits (such as unemployment, etc)?
Unfortunately, debt buyers regularly sue to collect on smaller balances like this.
My wife has a credit card with AMEX that just went to Alltran (we got our first letter today). They sent it to Alltran after nonpayment of 120 days. She owes $12,800. We tried to call AMEX to get our options, but they tried to set us up with structured payments. We didn’t like that idea because we’d have to waive literally ALL of our rights to do so.
My greatest concern is being sued and having some of our (very few, but very important) assets taken. For example, we own 1 acre of property outright (no loan).
I understand that our debt is unsecured currently, but I worry about getting sued and losing our property, which is very important to me.
I’d also like to pay for this debt. I’m not trying to be a horrible person when I tell them that I cannot honestly afford another $300/month payment.
She has two other credit cards in her name, both we have missed some payments on over the past 6 months, but we have made the latest 3 payments on time. These are smaller credit cards, one is $1000, the other $3000.
How concerned should we be about a law suit and what is our best option? My wife suggested that we pay the $300 as we can and if we can’t make it one month, don’t worry about it.
We can’t really come up with enough for a settlement, so that’s out of the question. Mortgaging the property to pay for credit card debt seems at cross purposes.
You should be very concerned about a lawsuit when AMEX is involved.
I generally do not suggest making a payment that is not part of an overall strategy. You might as well light that $300 on fire if it is not part of something structured.
Mortgaging the property is not always at odds with your desire to keep the home. But it is a no starter right now because you cannot typically qualify for a loan when you have late pays and unresolved collection accounts like this.
Call in for a consult and I can help you look at creative ways to accomplish your goal. You can reach me at 800-939-8357, ext 2.
Hi, I have kind of a 2-part question: I live in Illinois, and fell behind on my gas bill over ten years ago. Eventually my gas (used for heating and cooking) was turned off, probably around 2001. It is now a time-barred debt that has long since dropped off my credit report, and nobody has tried to collect in probably a decade. I managed to get by with no gas until a few years ago when, unemployed and broke, I racked up a huge power bill and stopped paying after ComEd refused a workaround, When they finally disconnected my service, I owed them a whopping $12,000, most of it for late fees and interest, I still live in the property working part time for myself and after 2 years with no power, (meaning it’s probably three years since I’ve paid them anything), I’ve managed to save up about $2,500 in cash. I want to try and use my savings to get the power back on, so part one of my question isL if I try contacting the collection agency who now holds the debt, what do you think my chances are of them settling for $2k, assuming I can convince them it’s that or bankruptcy? I’m sure the debt has been charged off long ago, because I’m basically judgement-proof, with no wages to garnish, no liquid assets. no large bank deposits, and no credit cards to speak of. The company that;s handling the debt is listed as Southwest Credit Systems LP out of Carrollton Texas, and per my credit report are “Collection Agency/Attorney”. Unfortunately, the part about the bankruptcy would be a bluff,, because it turns out that the equity in my home is too high, due to Illinois law being unusually strict. We also have a 10-year SOL for contract debt! My mortgage is only $400 a month, and if I had to sell my condo, I’d wind up homeless, because I couldn’t afford to live in even a shared apartment for that amount, in Chicago, so I’m out of options. As the second part of my two part question, if I DID succeed in getting the electricity back on, what are my chances of being able to re-establish gas service as a “new customer” at the same address after all this time? If the old People’s Gas delinquency no longer shows anywhere, would they still have an internal record of it?, I welcome your ideas, and appreciate any feedback.
I would call the power company and discuss all of the plans and options with them. They are who ultimately will decide whether they are going to deliver power to that unit.
It would likely be the easiest to put the power in a different name if that is an option.
The debt collector may settle with you, though maybe not for that low. But I would want that to lead to your power options being restored, and the debt collector has no power to make that happen, only the electric company would.
Our house burned down and we have been sick but after two years getting back on our feet. I have a job but all they care about is getting letter to say I have paid off debt. This is urgent trying to get me an apartment and all that really matters to them is you pay it off and a letter to my e-mail a notice stating it is closed and I paid it off. It’s urgent because I have this all done in the next two days. I have money but I need to know the fastest way to pay off and have them send an e-mail stating it been paid off. The apartment will be gone in two days. Who do I call? To make this happen fast, talk to manager of the collection agency or go back to original creditor. Also if I pay it off tomorrow on my debit card how do I get that letter stating its paid off. They need to see that or I can’t get the unit. What if they say we will send it to your e-mail and they don’t. Best and fastest way to pay it right then tomorrow and they will be waiting on the letters from each one to state it’s paid off.?? Please advise adapt if you can. I have been sick and taking care of mom, I’m trying to get this apartment tomorrow because I have all the money now, otherwise it will be gone cause these units never go vacant!! Hope you can help???
Who is the debt collector you are dealing with, and who is the original creditor?
Hello, My name is Lynn. I have a question regarding an Chase credit card that was charged of 04/12. This account was then sent to Unified collection company in which I set up monthly payment plans and never missed a payment until the final balance was paid 07/16. My question is, the entire time I was paying on this debt, Chase was reporting my account as CO every month with the balance owed. Is this legal? Is there anything I can do to have that removed? I thought a charge off was a one time hit.
The charge off should only count once against you. The fact that the account charged off is typically going to appear on your credit for 7 and one half years from when you stopped making regular payments (before you started making schedule payments to the debt collector).
Not much you can do to remove it early, but your credit can better improve now that it is resolved.
Michael,
I have separated from my husband almost a year ago who completely destroyed my credit. While I was in school he took control of the money (my mistake) and allowed several cards to go unpaid. He even racked up 7 missed payments on my car, not all at once so that it wouldn’t get repossessed, but nonetheless destroyed my credit. Since leaving him I have paid off every credit card that I own and have been making large payments son student loans. My credit score has shot up 150 points within the last 8-9months. I had one small collection from a cable company for $60 that has since been paid and removed. The only derogatory account remaining is a charge off from Target for $2500. I have been leaving that for some time as it hasn’t become a collection and was trying to pay off other things as well as getting my own place, and paying attorneys fees. I doubt I will get any money from him to pay for this account. I believe this is the only reason that I am not constantly being denied for credit cards as other credit factors of mine are positive.
I do not wish to pay the full $2500, especially if getting rid of this account isn’t going to help my score and my likelihood of opening a credit card. (I don’t need a card but was working on continuing to build my credit score back up to the almost 800 that it was before him). I could definitely do a couple of large payments or even a lump sum with a maximum of $1000. Is it likely that TD Bank/Target will remove this charge off for that amount?
The account was charged off a couple years ago but my stupid soon to be ex-husband would pay randomly after it was charged off a small $25 thinking that would help. The last date of payment was 02/2015, it was last reported on my credit as of this past month.
Any advice on what to do and/or working with this company or bank is greatly appreciated!
TD bank settles for half or less in many situations. They will not remove it from your credit reports though. Not even if you paid them the full amount with fees and interest. But that is okay. You credit is improving and the paid collection is not going to throw off your efforts.
I received the denial letter from the card I applied for. The only reason it states for denial is the charge off. Is it worth trying to settle the charge off and at least have them report it is paid or will the credit card companies still see it as a charge off and deny me because of it? Trying to determine if it is worth spending the money to pay off the charge off or just ride it out until it is removed.
For me it would depend on how soon Target is set to drop off your credit reports.
If Target is going to fall off in a year, and I am not going for a mortgage, I would wait it out. If I had a couple years or more to wait, I would probably settle this and wait 6 months or so after the zero balance is showing on my credit, and then make my next move to rebuild.
I have tried to make sense of what different sites are saying. Will the charge off fall off 7 years after it was declared a charge off, after the date of last payment, or after they stop reporting it to the credit agency?
If my credit report only shows date of last payment but not the date of the charge off (which was before the date of last payment) can I dispute it?
Count 7 and one half years from when you stopped sending in regular payments. If you stopped paying for, say 3 months, then made a payment, and stopped from there on out, it is still when you stopped making your regularly scheduled payments.
You can dispute an inaccuracy on your credit reports, but sometimes I would not suggest it.
Hi Michael,
In need of some advice from an expert. In April 2015 I was laid off from my employer and was no longer able to pay on my AMEX. The last payment I think I made was in May 2015 and was not able to do much since unfortunately.
The current balance is a little over $8,300. Amex had tried to collect and settle for 60% back last year, but I didn’t not have that at the time either. It went from them to GC Services and now to a collector called First Source. First Source has been calling, but I have not been in a place to settle.
Are you familiar with them and the best way to negotiate?
Also, I don’t think it has hit my credit report (checked last week) and I am keen on preventing that if at all possible. I am sure that will change soon as they sent a letter asking for a written dispute a little over 30 days ago, but I decided not to contest and give it the run around.
I would like to settle this debt before it can hit my credit report and lower my scores.
Any advice is welcome and greatly appreciated!
I am familiar with First Source. They are a larger debt collection agency. Call me to talk over why settling with them may be best, or why, depending on your ability to settle, you may have to wait, but end up paying more to resolve this in the long run. You can reach me at 800-939-8357, ext 2, or by submitting the talk to Michael form in the right column of this page.
Hi Michael,
After a divorce and a spinal surgery that left me disabled over 3 years ago, I was stuck with half of the family debt ($50 grand) and a total income between SSI and alimony of $62500. I have one child that is in college that I help as I can (he works, helps me) but became overwhelmed with credit card payments, extreme medical bills and living costs out on my own. I signed on a year ago with Harbor Legal Group out of Colorado for a debt consolidation and pay them $600 a month. What they explained to me and what has happened in a year are 2 very different things. So far, they have only reached one agreement with one of the smaller cards for about half. Looking at my account, my $600 payments seem to go in their pocket vs settling with the credit cards. My contract is for 4 years. They had first told me that around 6 months they hoped to have 3-5 settlements. Looking at my credit report as my score continues to dive, most credit card companies have charged off the amounts. I receive no phone calls or threats from them. I am thinking that filing bankruptcy may have been the better choice as I am struggling to pay the $600 per month to them. Is there a legal way I can get out of my contract with Harbor as they don’t seem to be doing what the plan was? Should I look into bankruptcy? Thanks, Dianna
Call me for a consult Dianna. You can reach me at 800-939-8357 ext 2, or submit the talk to Michael form you see in the right column on this page and we can email back and forth to set up a time to talk things over on the phone.
You have to pass a 65k-ish income means test to file chapter 7 in Colorado (2 person household). If you are a one person household you may not be able to do chapter 7.
If you still want to settle debts you may be able to, but I would want you to try everything to get your money back if there were advance fees charged by the settlement outfit.
You can absolutely cancel with the settlement company.
Hey I got myself into tough financial trouble after moving about two years ago and have gotten a steady salaried sales job so money is much more stable. I just settled with my biggest balance card and am having a family member loan me the money. I know I’m going to have a retail and one more credit card go to collections. They’re much lower in balances (800 & 3500) and with finding out how much I can negotiate with them am I able to settle on a lower amount and make payments or do they just negotiate for a lump settlement? I know I won’t be able to loan anymore money from family and really don’t want to and don’t like that I did.
How long ago did you last pay those 2 accounts?
Who are the accounts with?
Who is collecting on them now?
It is often best to settle with a single lump sum amount, but there are instances where you can settle and break it up into payments. There are some creditors, and debt collectors, that I would avoid talking payment plans with.
Another chase for I believe 2500, maybe less not sure to be honest. But haven’t paid in at least 6 months. I can’t do another lump sum because I have no money saved from paying off my debts and I really don’t want to keep hitting family up for it. I have two cards (Nordstrom retail card and a Capital One) that are on the verge of collections and I want to try and keep those from going. Nordstrom will work with me and Capital One I want to keep alive because it’s my oldest card and first card but I think if I could do the minimum payments it would just take forever so I anticipate that going to collections soon. I would love if a collection company would say we’ll take 50$ of the balance and do monthly payments but not sure if they do that or will.
I would avoid settling with Chase using payments and just wait until I could save up to settle for a lump sum.
I would try to tackle Capital One, and with payments, after they charge it off. They cannot go beyond 3 months payments with settlements prior to charge off, but can go longer after that. Just know that talking low monthly payments typically means you are not able to negotiate much or any savings off the full balance owed.
the second chase card actually called me yesterday. We settled from $31xx to $1810 and my brother is lending me $1500 but told the collections he would only give me $1250 so when he’s able to transfer me the money I’m going to go back and tell them I was able to get $1500 and want to pay the full up with that. What’s $300 (I’m hoping they’ll see it that way). I just fear with Capital One that it’ll be too much of an initial payment to keep it alive after all the fees and interest has built up. I need to actually call them and talk to them about it. Also sorry for the delayed responses I’m not getting notified when you write back.
Capital One is far less flexible than Chase. I would put them first then circle back and deal with Chase if it were me.
I just saw this. Was trying to login to capital one and they’ve moved it to collections already it looks like. It’s going to have to be a waiting game now. I guess i screwed that bit up. It’s gonna be a while until they get any sort of settlement from me with settling up my two chase cards. Hopefully I can get some money saving.
He Michael. I have a judgement against me made Nov 2011 for almost $7000 plus interest and costs with Asset Acceptance, LLC. I would like to get this handled. I live in Georgia. What would be the best way to start negotiating with them? I obviously do not have $7000 but my family is willing to help up to $2000. Any advice would be appreciated.
You are likely going to need to pull together more than 2k. How long would it take you to gather up half the balance owed today? Judgment interest can go as high as 12% in Georgia. Assume the balance you owe is closer to 10k now, so you need roughly 5k.
I could maybe come up with 5k in a month or two. Maybe sooner.
I would not make an effort to settle until I had access to about half.
I have a page up dedicated to settling with Asset Acceptance.
If you want help call me for a quick consult at 800-939-8357, ext 2, or fill in the talk to Michael form in the right column of this page and I will coordinate a time to talk with you via email.
I have two Bank of America accounts with 0% Iam struggling paying them now, the 0 will be up in October….Iam now on disability so I have a very set income of 1400 a month…talk with the debt settlement company boa uses, on paper she said there is s just no way to recover from this with what Iam bringing in now…so Iam not late yet but am going to haft to be now..the payments with interest on them are impossible, should I just do bankruptcy? I have tried to call boa was on hold for 30 minutes had tonged off the phone so I never spoke to anyone..any help would be greatly appreciated…I don’t know what to do….
What are the balance on the BofA accounts as of today?
Do you have other credit card debts, and if so, how much do the additional accounts add up to?
Hello Michael,
I currently have two charged off credits cards. One with Wells Fargo for 900 and the other one with capital one for 300. I opened these when I had just turned 18 in 2012. obviously not knowing how to be responsible with credit cards . I only had them for about a year before I could no longer pay them. I just turned 22 and really don’t want these credit cards to haunt me forever, I’ve read online that even when you pay off debt sometimes collections don’t take it off your credit report? Or you pay more than you owed and I don’t know if it’s worth it to pay these credit cards off if it’s going to cause me more problems. I am willing to pay these cards full I just don’t want to be in credit card debt . (I have student loans to worry about) I haven’t called around because I don’t know where to start and how collections really works to be honest. So if you can lead me in the right direction and maybe some tips that would be greatly appreciated thank you so much.
It is not just sometimes, but nearly all the time, that paying a collection account does not get it removed from your credit. That is normal. But they do update the credit reports to show you paid, and that will help you rebuild your credit.
This very page is full of information. Read deep into the comments for tips and advice. You can check out many of the videos on our YouTube channel for tips and strategy. Here is a good one about timing your negotiation efforts with collectors to start you off.
I am trying to buy a home and I had some collections that needed to be paid off before closing. My mortgage company pulled our credit in May. As of May one of my debts had been removed from one reporting agency because it has been 7 years since the debt was incurred. As of June the debt was removed from all reporting agencies. My mortgage company is saying the debt is still showing as an open account with JH port and we need to pay it or get it removed before we close. My questions are:
1. How can this be?
2. Can my mortgage company still make me pay the debt even though it is not showing on my credit report?
Any input would be greatly appreciated!
It was nice to speak with you on the phone today Lydia. Please post an update after you get things over to the lender.
I have a Capital One Credit Card in collections with Scott and Associates, P.C. out of Carrollton, TX. They account charged off in 07/2015. My last payment was 05/2015. The charge off amount was for $5895. This has been placed on my credit report and updated on 07/03. On 07/04 – Scott and Associates, P.C. Sent me a letter with an intent to sue. The letter states that I have three options 1) Call them 2) Pay off and settles for around $5460 OR make monthly payments of $246.
What are my options for neogtiating settlement of the debt? I can’t pay the full amount at this time. I ideally do not want to make monthly payments of $246 for the long term. I know that I could pay this off completely in March of 2017. I was wondering what my best options are? Should I try to scrounge around for a 50% settlement. Should I try to pay it down and then offer a settlement later? What are your thoughts?
If it were me I would be focused on pulling together 50% and trying to negotiate that outcome now, and before they sue. If you have to be sued, and then buy time using the formal court process to your advantage, and then settle for 50-ish percent, it just is what it is. And I would rather do that (you still avoid a judgment) than agree to monthly payments that you don’t like to begin with.