I need a suggestion please.

[tdtd10]

Long story short, I received a letter from an attorney saying I owe on a CHARGED OFF account from US Bank. I contacted US Bank and they said the account is marked as a charge off and it belongs to a collections agency.

The attorney is collecting for the collections agency.

Now, the last time this account had any action on it was in 09, so 3 years ago. I don't even recall making payments on this, but it is legit according to the bank.

My question is, since my report shows this as a charge off, should I make a settlement and pay the lesser amount or pay it off in full? Would it matter on my credit report at this point since it is a charge off?

I have the money to pay it off, and morally it makes sense to do so, but if it doesn't matter what it shows on my report at this point and time, should I just settle for less money?

I know my report will take a hit at first, but then it should improve and give me a higher debt to income correct?

Suggestions and opinions welcome.

Thanks.

[BV80]

Since you don't recall making any payments, I'd check my bank statements (checking account bank, not credit card bank) before I do anything else. Get a copy of your bank statement for the month the last payment was supposedly made. If the payment is there, fine. If it's not, I'd get copies of my statements before that time to make sure I had made payments at all.

Does the OC's entry on your CR also say "sold" or "transferred". If so, US Bank doesn't own it anymore, and you're dealing with a JDB.

If US Bank still owns it, you can request a pay for delete, which would probably require full payment, but not all creditors will delete. If they don't agree to delete, their entry will show that the account was either settled and paid in full or settled for less than full amount. Either way, the negative entry will stay on your CR.

[tdtd10]

Since you don't recall making any payments, I'd check my bank statements (checking account bank, not credit card bank) before I do anything else. Get a copy of your bank statement for the month the last payment was supposedly made. If the payment is there, fine. If it's not, I'd get copies of my statements before that time to make sure I had made payments at all.

Does the OC's entry on your CR also say "sold" or "transferred". If so, US Bank doesn't own it anymore, and you're dealing with a JDB.

If US Bank still owns it, you can request a pay for delete, which would probably require full payment, but not all creditors will delete. If they don't agree to delete, their entry will show that the account was either settled and paid in full or settled for less than full amount. Either way, the negative entry will stay on your CR.

Us Bank told me they sold the account and no longer have it. So I am dealing directly with the attorney. If the negative item stays on my report, is there a benefit to paying it all or should I settle for less?

Doesn't it only stay there for 7 years? Now would the 7 years then start all over now since I am making a new payment, or from when the account was opened?

[nobk4me]

The debt is now with a JDB, that bought it for pennies on the dollar. I would never pay a JDB, but it's your decision. I also believe there is no moral reason to pay a JDB.

If you want to settle, knowing how little they paid for it means you should be able to settle for much less than they want.

I would rather fight them in court if they sued me. Be aware that making a payment now may reset the statute of limitations (the time in which they can sue you). Note that this is not related to the time a debt may be appearing on your credit report.

[BV80]

In addition to Nobk4me's response, paying a JDB will have no effect on the OC's entry. Since the OC no longer owns it and is not updating, their entry would not show that the account was paid or settled.

If the JDB is reporting, their entry would show paid/settled. Paying the JDB would not effect the date the entry will fall your CR. The fall off date is based upon the date of first delinquency in the OC's entry.

However, making monthly payments to a JDB would restart the SOL for collections. If you settle with the JDB, do it in a single payment settlement. As Nobk stated, I'd never pay a JDB. But, you must do what makes you comfortable.

First, I'd make sure the date of 1st delinquency on the OC entry is correct. I wouldn't go by what the OC claims either. I'd check my own bank records.

[RockDaddy]

TDTD10,

You've gotten good advice from BV80 and Nobk4me. Both trusted sources on this board. Since you've found this board, let me make it clear that the entire reason this board exists is to help you understand and learn to deal with Junk Debt Buyers, Collection Agencies and the people who represent them.

You will find that the majority of the people here, myself included, would rather stick a sharp stake in their eyes than actually *pay* a JDB.

The reason given in the other response made it fairly clear - If the Original Creditor charged it off, you have absolutely no obligation whatsoever to pay the JDB, a CA or the lawyer representing them.

If you search this forum, you should look for cases based on *Standing* or the JDB's lack of standing to actually, legally collect on the debt. You'll be surprised to learn of the horror stories of people who actually cave in when they don't really have to, just because they didn't understand how this stuff works. It's a game, and a profitable one. The CA's and JDB's count on people just paying because the think the are obligated (morally or otherwise) to do so. Not true. Also, a lot of attorney's who are also CA's will attempt to sue, hoping that the defendant will cave, and / or not show up and received a judgement against them, which means they win without proving anything.

So, arm yourself with the info this board will provide you. A lot of us have taken on JDB's and beaten them in court, or out of court. I believe that BV80 had a statistic, that about 95% of cases settle before ever seeing a judge. So if you're armed and learn how to beat them at their own game, you could save yourself a lot of hassle and possibly win. Just depends on what your goal is overall.

Just my two cents. Sorry it's lengthy, I'm in a chatty mood tonight.

Edited March 30, 2012 by RockDaddy