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I'm filing BK, wife isnt - Should we pay off her charged-off cc in full or settle?


dkm
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I'm filing Chapter 7 bankruptcy in Michigan. I am married, however none of my debt is in my wife's name whatsoever. She is not filing bankruptcy.

My wife had a credit card in her name only, which was charged off and sold to a collection agency with a balance of $750.47.

We just got enough money to actually pay off her credit card balance. The collection agency offered a 70% settlement on the balance, and just now accepted my 44% counteroffer. No money has transferred place (I'm waiting to receive the acceptance of the counteroffer via fax, first.)

QUESTION: My primary concern is her credit rating in the future, since I'll have a bankruptcy on my record forever. She doesn't have any other charge-offs. Should I take the 44% settlement and save us $420, or am I better off paying the account in full - so her credit report says something like "charged off, paid in full" - rather than "charged off, settled"? Is this difference worth $420?

QUESTION: The credit card is currently being reported as R9. I'm wondering what code "paid, settled" is. Does it stay as R9, with a comment? Or change to something like R7? If we were to pay in full rather than settle what code would that be?

QUESTION: Has anyone had luck getting a collection agency to code the account better than it really is, or remove the charge off from her record? I went two supervisors up, and they said they can't do it even if we pay in full since they aren't the paper holder. The paper holder is someone called FFPM Carmel Holdings, who they couldn't give me a phone number for. Should I try contacting them to get her a better credit report or should I pay the 44%, save $420, and don't look back?

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First off, the CA will accept less, thats a good thing...but are they going to PFD, did you ask them to delete after payment?

I would pay wifes card so someone has credit, it sucks when neither one of you can buy anything...Save her credit if you can.

I know nothing about BK...but i'm just offering my opinion...

Good luck to you both.:)++

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First off, the CA will accept less, thats a good thing...but are they going to PFD, did you ask them to delete after payment?

I would pay wifes card so someone has credit, it sucks when neither one of you can buy anything...Save her credit if you can.

I know nothing about BK...but i'm just offering my opinion...

Good luck to you both.:)++

They haven't agreed to a Pay For Delete. I was hoping they would. They said they aren't the paper holder, and are just an outsourcing of an outsource to collect the debt basically. They said the paper holder (I guess who actually owns the debt now) is someone called FFPM Carmel Holdings. They didn't have a phone number for them. The company one step up from them just refers me back to the collection agency that I've been negotiating with. This collection agency who's agreeing to 44% said even if we paid the full 100% that they have no way to do a deletion.

Not true. BK is only reported for up to 10 years.

True. I should have been clearer in what I stated. It's only reported for 10 years, but I think on every credit application it asks you if you've ever filed bankruptcy, and I believe it's illegal to answer no when you have. I might be wrong, but that's what I've read in several of the books I've gotten on bankruptcy -- that although it falls off your credit report in 10 years that it really sticks with you forever.

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that although it falls off your credit report in 10 years that it really sticks with you forever.

Not true. Once it is off your reports you can say no to the BK question on an application and not be committing any kind of fraud. The FCRA does not permit bureaus or creditors to keep bankruptcy information for more than the mandated 10 years. The whole point of the FCRA is to ensure consumers are not penalized for the rest of their lives for past credit blunders.

There is an exception though. If a credit account had an initial balance over $150,000 and you are late or default on that account, then that can stay on your bureau report forever. But just becuase it can does not mean it will. So far the bureaus have not implemented any kind of retention of accounts that meet that exception. Nevertheless this is why anyone worth their salt in credit information will tel you to never-never-never be late on your mortgage payments...because, in general, this is the kind of account that may exceed $150k.

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