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One major old debt - Want all references off my CR permanently

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I have one major mark on my credit report. I ran into financial difficulties in early 2003, while later in 2003 a "3-years no interest/payments" credit card from HSBC/Rooms To Go came due. I was barely able to keep up with living expenses but seemed to be able to work out temporary partial payments with all my other creditors except HSBC. Not only did they apparently not want to work with me, they turned me over to a 3rd-party collections outfit after I hit a 90-day past due situation.

Long story short, I decided to spite HSBC and their nasty collectors. I could barely afford to pay them $60/month let alone pay the full collection amount of nearly $3200 when they started badgering me. I just stopped answering their calls and ignored their mail. Pretty stupid.

The negative CR report I have is for a company called Arrow Financial Services (AFS) out of Niles, IL. It states that this collection account was opened in 07/2004 in the original amount of $4100. However, the "recent balance" is listed at about $5000.

I feel confident this debt has passed the Texas 4 year SOL. If I'm mistaken, due to some esoteric legal "assignee grace period" or similar nonsense, I'd greatly appreciate somebody pointing this out. What I don't want is having to deal with attorneys and a potential law suit at this stage.


My primary goal is to get the negative reports off my CR completely. My understanding is that I can negotiate this with AFS with few problems presuming an agreeable settlement. What I'd really like is to also get the HSBC negative report removed. However, I haven't really read anything that suggests AFS has any leverage or influence over what HSBC would do with my credit report as the debt is long gone from their perspective.

While I like the idea of going through the entire debt validation process to possibly get the debt removed entirely, I'm not prepared for months and months of back-and-forth, silence, jockeying, posturing, denials etc. I have the money to at least pay off a portion of the total debt and would just as soon get to the negotiation process ASAP.


*9-year resident of Texas

*At worst, the 4 year SOL clock would start ticking as of 08/04.

* On my CR, Arrow Financial Service is the reporter. Under Original Creditor it says: A.F.S. ASSIGNEE OF HOUSEHOLD BANK. Under "Date Opened" it says 07/2004. Under "Reported Since" is says 04/2005.

* On my CR, the other entry is reported from HSBC/RTG Under both "Date of Status" and "Last Reported" it says 08/2004. Under "High Balance" it says $4100. Under "Status" it says TRANSFERRED,CLOSED/PAST DUE 180-DAYS

* My original balance due to HSBC was about $3200 before all the late payments, interest, etc. started compounding in late 2003.


So with all the above in mind, understanding I'd rather get the negative report(s) removed as opposed to DV and/or negotiating for 12-months to get the lowest possible settlement offer, I plan to send the reduction of debt sample letter (http://www.creditinfocenter.com/forms/sampleletter6.shtml) to AFS offering 20% of the $3200 original debt amount and requesting the complete removal of this report from my CR. I expect them to come back with a 50 or 70% counteroffer at which time, I would plan to counter with 30% expecting to hopefully arrive at 35 or 40% settlement within a few months at most. I'm prepared to pay and feel $1200 - $1500 is fair for all involved.


1. Is AFS a JBD or a legit CA?

2. Is HSBC, listing on my CR as Status=Transferred,closed still somehow tied to this debt and will they financially benefit from my settlement or is this debt entirely with AFS now?

3. Could anyone guess as to how much AFS likely paid for this collection account? Is 7 cents or even less on the dollar realistic?

4. If nobody knows, can someone explain how I could find out from AFS whether HSBC is still involved and stands to benefit from me settling, therefore offering an opportunity for me to negotiate that HSBC would also remove the negative report from my CR? Could I just call them anonymously and find out by asking a general question?

5. Is it fair for me to begin negotiations from the actual amount I owed back in 2003 (~$3200) or should I be working from what AFS lists as the current amount owed of nearly $5000?

6. Is my strategy sound or should I begin with an even lower opening settlement offer hoping to finally settle at closer to 25%?

All help, advice, guidance and suggestions are most welcome. I really appreciate the help!


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