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18% Settlement?


savihc
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Hi, I'm new here, and happen to find this site just on time. Well Long story short I only had 3 Credit cards, the one with the most damage sent me a letter to settle at 18%, and in the same letter it said that it would take payments for 6 months if agreed, but i only had a few days to do so. So i gave the rep a call and got a few things cleared out, I asked the representative a few things, and among the answers; Among the answer he told me that that letter was proof etc etc, that i might get a form to file for income on the rest, and after 60 days of last payment it'll "settle" on credit report etc etc(*which was on the letter) That one Is PNC (Which used to be National city) I already sent in a first payment, and would like to know from ya guys if 18% is normal, has it happened before, and if so what should i do next? like ask for something else in paper?

thanks again =D

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Get everything in writing. Never accept their word over the phone. Years ago when I was still in the Marine Corps my command got a call from a debt collector about an account that had gone into default. Being the military, they called me into my CO's office and made me get on the phone and pay it right then and there. The guy said he would send me a letter saying it was paid in full. Never received anything...few years later another CA started calling and sending letters on the same debt. I told them to pound sand, luckily they never called my command. Same thing repeated every couple of years for about 10 years or so. Haven't heard anything out of it in 4 or 5 years now so I hope it's finally dead and gone.

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18% settlement offer.

Translation- We stand no chance of winning this in court (might even be out of statute) so something is better than nothing.

Not an uncommon offer at all. I've seen settlements as low as 5%.

Does making a payment reset the SOL? Also, does it admit to oweing the debt to the CA? Just curious really...

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Does making a payment reset the SOL? Also, does it admit to oweing the debt to the CA? Just curious really...

Yes and yes. Though normally it doesn't matter because the account is settled so they won't sue you and you won't need the SOL as an affirmative defense. If you want to be extra careful (which is reasonable with shady collectors), put it in the settlement contract, something along the lines of: "consumer disputes this claim, and no payment made in connection with this settlement may be deemed an acknowledgement of any debt."

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After there is a settlement reached the SOL won't come into play. You will (or you should) have an agreement in writing, so the SOL issue is now moot.

But I agree, you would still put something like, this matter is disputed and while admitting no liability, XXX has agreed to pay XXXX to XXXX in exchange for XXXX.

If they go back on their written agreement, conceding you started the SOL would be no problem. They will have a lot bigger issues to worry about if they breech a written agreement.

On a side note if you have no agreement and you just pay on an old debt, generally speaking, that restarts the statute of limitations. That is why you will hear about collectors and the phantom payment. Where they claim a few years ago a twenty dollar payment was made when none was made.

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Regarding the form to file for "income" on the rest. I don't think it's exactly legal for a JDB to try and 1099 you for the remainder. Typically OC's will charge off bad debt on their taxes for that year and take it as a loss. How can you be 1099'd for the rest as income if they've already charged it off? The JDB certainly didn't purchase said debt for the original amount.

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