ItsANewDay

Charge-off situation.

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Short version: Wanting to move in the next year and will obviously be looking for a Mortgage. I have a charge off of about $8000 from Prosper(a person to person loan provider) from about 3 years ago and I need to know if anyone is familiar with their procedures as they pertain to negotiating settlements, payment plans, etc. Best I can tell I will not qualify for a mortgage until this is paid, but the problem is I don't know how to approach them given they are not the creditor. They have never contacted me about collections and based on my readings they just moved on back then as they didnt want to be in the collections business for someone elses money . If I did pay them something then where would the money even go as many of those that I owe are probably no longer around. Has anyone had any experience or have any knowledge of Prosper and how I should deal with this. Not looking for a magic potion to make everything go away, I made my bed and am willing to sleep in it. I would however like to know what is in my families best interest as far as moving past a rough patch in our finacial lives and getting this issue resolved. Thanks in advance

 

 

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https://www.prosper.com/plp/borrower-registration-agreement/

they're affiliated with Webbank who makes the loans, Prosper is the servicer. The individual investors are out of the loop as far as you're concerned, they have their own agreement with Webbank/Prosper. You can dispute on your credit report and see what the reply is before contacting Prosper directly. They may have even sold the account to a JDB. You can always send an e-mail to support@prosper.com or call, just be aware they are probably recording the call.

I would however like to know what is in my families best interest as far as moving past a rough patch in our finacial lives and getting this issue resolved.

Don't look at it as this must be solved before you move even if that includes agreeing to things you wouldn't normally do hoping this gets a loan approved. There are options such as renting a house in your new location temporarily.

 

 

 

This Borrower Registration Agreement (this “Agreement”) is made and entered into between you and Prosper Funding LLC (“Prosper”).

The Prosper marketplace is an online credit platform (the “Platform”) operated by Prosper.  Among other things, Prosper offers access to unsecured personal loans in the form of the promissory note attached hereto as Exhibit A (the “Promissory Note”). All loans originated through the Platform are made by WebBank, a Utah-chartered industrial bank (“WebBank” or “Bank”).

Collection & Reporting of Delinquent Loans. In the event you do not make your loan payments on time, Bank or any subsequent owner of the loan will have all remedies authorized or permitted by the Promissory Note and applicable law. In addition, if you fail to make timely payments on your loan, your loan may be referred to a collection agency for collection. Prosper or its agents may report loan payment delinquencies in excess of thirty (30) days to one or more credit reporting agencies in accordance with applicable law. See the “Permission to Contact” section below for additional important information.

 

 

 

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11 hours ago, ItsANewDay said:

Wanting to move in the next year and will obviously be looking for a Mortgage.

DO NOT pre-apply for a mortgage until you settle this.  Once they find out you want a mortgage you lose your leverage to negotiate a settlement.

11 hours ago, ItsANewDay said:

Best I can tell I will not qualify for a mortgage until this is paid, but the problem is I don't know how to approach them given they are not the creditor.

Prosper IS the creditor the difference is they didn't use their money to fund the loan they used peers to do it.  I am beyond surprised they didn't sue you because another P2P lender that is run by Web Bank like they are is pretty aggressive at suing for these debts now or selling them to a junk debt buyer.  WHERE the money goes once you settle it is not your problem to worry about.  Negotiating a settlement with the correct party is.

First and foremost pull your paper hard copy credit reports and see what/who is reporting.  If they state sold to another lender then you cannot deal with them you have to find out who they sold it to and deal with that entity if they are even reporting.  If they are not reporting I can guarantee you they will come out of the wood work when you try and get a mortgage.  Debt buyers and creditors pay the credit bureaus for the names of people who app for mortgages then compare them to the lists that owe them money.  If they find a match they escalate collection efforts.  

Since the loan was in GA and you defaulted 3 years ago they still have 3 years to sue.  Once you know what is reporting and to who then you can decide how to approach whom ever has the debt and negotiate a settlement.

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Thank you for the replies. Best I can tell by looking at my credit report Prosper still has it. There has been no contact made from a DC and nothing reported from a DC either. Given that, is my best bet to call them directly and negotiate or send them a letter with an offer? If the phone is the way to go and you have already said be careful that it is being recorded, what should I avoid saying? I have read that 25% is what people offer, is this generally accepted or do most wind up paying much higher %? Thanks agin guys for all the help!

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54 minutes ago, ItsANewDay said:

Given that, is my best bet to call them directly and negotiate or send them a letter with an offer?

My success in getting a settlement I am happy with has been in sending a settlement offer letter with 2 copies of a signed settlement agreement.  The letter states that if they agree an authorized representative should sign it and return it to me.  Once I receive the signed agreement back I pay by money order within 14 business days.   My settlement offer is what I am willing/can pay and they delete (though you may not get this), and that once we settle it is settled in full and any remaining amount is disputed.  There are other conditions in there but they will either accept or reject the offer.  

The good news is settlement talks are not admissible in lawsuits.

57 minutes ago, ItsANewDay said:

I have read that 25% is what people offer, is this generally accepted or do most wind up paying much higher %?

There is no cut and dried amount.  It is up to each creditor and they have their own standards.

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Thank you CM! Great idea about the 2 copies of a letter. Given that this seems to be with the OC do they tend to want a higher % than JDCs? I assume you meant that you put in your settlement letter that they would delete the charge-off upon payment. Did they acually do it or send a new settlement agreement with that excluded. I have read where they they can not take a charge-off off your credit report, is this true?

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Depends on how busy they are, how bad they want to work the case to settle.  If they had no intention of suing you for it, they may bite.  If they were biding their time letting interest collect, they may plan on filing suit before the SOL runs out. Anyone's guess.  

I would start low.  If they counter you can decide if that is affordable, if not, you may counter that offer. State you will be borrowing money from relatives to pay them, sometimes helps on the counter. Good luck.

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Thank you shellieh98. I was under the impression that once a charge-off occurred that interest stopped adding up? I mean if a given amount has been "Charged-off" and deemed noncollectable, how can they keep adding money to it? Also I have read where Prosper has chosen to only sue people form the companies home state of California. Seems they don't feel it is worth it given their business model to do so in other states. It is hard to find a lot of information on them as far as settlements go, which is why I created this thread. Thanks again!

 

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4 hours ago, ItsANewDay said:

Thank you shellieh98. I was under the impression that once a charge-off occurred that interest stopped adding up? I mean if a given amount has been "Charged-off" and deemed noncollectable, how can they keep adding money to it? Also I have read where Prosper has chosen to only sue people form the companies home state of California. Seems they don't feel it is worth it given their business model to do so in other states. It is hard to find a lot of information on them as far as settlements go, which is why I created this thread. Thanks again!

 

A creditor is allowed to charge interest after charge off.  However, if it chooses to do so, it must send periodic statements to reflect the interest and changing balance.   If the creditor chooses not to charge interest after charge off, then it doesn't have to send periodic statements.

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3 hours ago, BV80 said:

A creditor is allowed to charge interest after charge off.  However, if it chooses to do so, it must send periodic statements to reflect the interest and changing balance.   If the creditor chooses not to charge interest after charge off, then it doesn't have to send periodic statements.

Ok, did not know that. Given I haven't received any form of a statement I assume they are not charging it.

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