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Help! Negotiating with 3 CAs to settle old debt


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My sister signed up for three store credit cards using my name and social a few years ago (mid 2006) and ran up nearly $1,000 on each of the three and decided not to pay them. I am just now beginning to be bombarded by collection agencies (they've been sending notices to the wrong address for a while, and have just found me).

I know what she did was illegal, and the easiest thing to do is report them as fraud, but she's family. At the time she was into drugs, etc. and has since turned her life around and has agreed to pay, so I don't want to turn her into the police and report the accounts as fraud. However, this completely screwed me in regards to credit. I accept that it will take me years to recover.

Nevertheless, I'm trying to figure out the best course of action. I've spent hours reading this forum, website, and everything else I can find, but am still finding the process confusing and can use some advice.

The CAs are: Asset Acceptance; LVNV Funding LLC; and Performance Capital. The charge-offs all occurred in mid 2006, and the SOL in California is 4 years.

Assuming I can't get the CAs to completely remove the accounts from my report, will settling the accounts actually hurt my credit score (since it will show an Activity Date of January 2009 rather than May 2006? I've read conflicting information, and am trying to get an accurate answer.

Also, I just want to confirm that the 7 year reporting period is from the date of the charge-off, and settling can't reactivate that period, correct?

Finally, assuming I can negotiate in writing a settlement agreement for 25-50% of the debt which states that it will completely discharge the debt, do I need to use the "restrictive endorsement" strategy to prevent the CA from selling the remainder to another CA to try to collect, or is the written agreement sufficient?

Thank you for your help through this difficult issue. Can't wait for 2013, when I'll finally have my credit at a respectable level.

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I would pull all three reports and see who the original creditors are first. These three will not generally budge on removing the old accts from your report too easy, you may have to wait until 2013.

As far as the JDB's which the CA's you listed actually are, I would see in my reports when the date of last activity actually was, and count the 4 years until they are out of stautue. Once out of statute, dispute with the credit bureaus, write letters. In the mean time, you can DV all of them and request they cease telephone communication.

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If you choose to accept being held liable for the accounts then the negative reporting may well be what you have to live with…if your sister is willing to pay the debts as you suggest then you stand a decent changes of being able to negotiate the removal of the negative tradelines in exchange for full payment but there are no guarantees and you’ll have to negotiate that with each separate creditor.

For any agreement you do get…make sure it is in writing.

Settling a debt does not change the date the account became delinquent (which is the date from which you measure the allowable reporting period). However, there are times when getting the credit bureaus and data furnishers to follow the law can be problematic.

Now, while you didn’t ask, I think it necessary to point out that your sister is a criminal. I understand that she is family and that you want to think she has turned her life around…if she has then that’s wonderful. However, I’ve worked with enough in her situation to know that disappointment is a lot more likely to be the end result of her new life…if so, allowing her to escape the punishment she deserves is not doing her as much of a favor as you may think.

That said; it’s your decision – I hope it works out for you and her.

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