Sears Mastercard settlement at 80% forgiveness

[gwenygirl]

After going back and forth with Sears (became late in April) they sent my account to a collection agency that works for them named Monarch and I have settled.

I orginally offered to settle my balance of 12,341 for 2,000 with sears mastecard. They countered at 6787.42. I couldn't do it so it was sent to Monarch.

I told Monarch that I offered 2,000 and that I might be able to pull off 3,000. They went to citibank and offered 1,200 (mgmt told me this) so that they would counter at 3,000. I was told they settled at 3,000 but then the agent told me to hold on and that mgmt wanted to speak with me. He informed me that he countered again and got it down to 2526. I settled for 20% (80% forgiveness).

I still have 2 more citi accounts to settle and they are not being as generous. I sure do hope that Monarch gets these accounts as well so I can settle with them!

[nobk4me]

If you don't settle with Citibank, here's what will likely happen: the account will be sold to LVNV, a junk debt buyer, for pennies on the dollar.

I would think you might get a better deal from them. And if not, there are more tricks to fighting lawsuits from a JDB than from an original creditor.

[WhoCares1000]

20% is an awfully good settlement and if the OP can come up with the money, that is even better.

I would suggest however that the OP puts aside another $2500 to cover the taxes on the 80% that was not paid as I am sure this transaction will be reported on a 1099-C.

[Flyingifr]

Don't be surprised if they sell the 80% to LVNV anyway. Save the settlement agreement - you will need it.

[retmar]

Absolutely save all paper work. This has happened more times than any of us want to count. If you haven't already, sit down and compile everything into one folder. This includes each written communication and each phone conversation with the date, time, name of rep, and main points of that conversation. I say only main as with them, it is easier to remember the smaller points. Yes, if you did not do this, or do not recall, note the approximate as close as you can. You can always use the "on or about".

As was mentioned, set aside some funds for tax time. You may receive a 1099 for the difference between the amount settled and the amount owed. Or, if you know your filing this year will be near last, use those numbers and add the difference to see how it would hit you. Then plan from there. This will give you an idea of what to expect. If you don't receive a 1099, celebrate.

[gwenygirl]

Thanks for the info! Per the letter from Monarch is that is will be settled. It states " upon receipt and clearance of these funds, your account will be marked settled, you will be relieved of any further reponsibility pertaining to this account and our client may notify the appropriate credit bureaus that this account has been settled."

They told me over the phone that it would show settled in full. Is there a difference between "settled" and "settled in full" ?

Thanks

ps--I received a call from my big citi account (actual citibank, not a collector). They offered me a settlement of $7710 on a $25,500 debt--I counterred at $5,000--they came back at $7710, I countered at $6,355---the came back at $5200....I think I'm going to take the deal.

Thoughts?

I'm trying to get this stuff taken care of and don't want it to go to a collection agency and then let this issue multiply, get sold off and keep haunting me....my thoughts were to settle with the creditor and be done with it and try to repair my now 479 credit score back to its 787 position 6 months ago...

[retmar]

Always respond in the manner that places you in a better position than you were. If it includes your saving a lot of money now, so be it. Even if you do receive a 1099, the end result is you are now in a better position. Just use last years IRS filings as a "working" number for this year as you will then have prior knowledge of approximately where you will find yourself this next filing period.

I've heard others over the years say they were able to get deletion of negatives and TL changed to "pays as agreed". No guarantees, but, why not ask anyway?

I would not worry as to if it says "in full" or not, just worry that the account shows settled, and a zero balance due. Keep all paperwork involved with the particular account(s) involved for a few years, just in case a JDB comes out of the woodwork.

Understand that a paid collection or settlement is still considered a negative.

Edited September 21, 2010 by retmar