settlement and credit history

[nick]

hi,
I was curious to know if i do a settlement on my credit card accounts,how will it get reported on my credit? will this help me improving my credit, and how soon can i start getting credit? During settlement is there something very specific to be told to the creditors to put on my credit file? generally they will write the amount the credit has been settlled for, is this a positive thing on my credit history?I am late by a year on my credit card payments.
any response is helpful
thanks,

[HRx]

Make a settlement on your credit card debts "can" improve your credit score/report. You'll first need to determine how the creditors are currently reporting information to the credit bearues. If the accounts have already been charged off, you'll want to obtain written agreement that the creditors will report your credit status as, "PAID" upon reciept of the agreed paid.

Good Luck!

[HHM]

Ok, you say you are already a year behind on payments, so your credit is fairly shot as it is. Will settlement help, probably, as would BK. You already have a negative payment history. What settlement and BK do is improve your debt to balance ratios.

Most credit reports I see, the creditor report settlements as "SETTLED", (or something similar), and yeah, it is a negative in so far as you didn't pay your account.

The bottom line is, you need to do something. There won't be much difference between filing a BK or settling in your case, although, at lease with settlement, you won't have BK being reported for up to 10 years. So the question you need to ask, is how much do you want to spend to get out of debt.

[HRx]

Nick,

Let me know if you need additional clarification regarding this.

Good Luck!

[nick]

todd,
yes i do need additional clarification regarding this.
thanks,
nick

[HRx]

What do you need clarified?

[nick]

todd,
one of my creditors is giving me a settlement agreement stating that "the account will have no further obligations if the amount $x is paid. And this account will be settlled".
This agreement does not mention wheather they will report to credit bereau or not. When i called them they said the creditor wil report the credit bereau in 60 days if not i can call the credit bereau and fax them the agreement and they will update. Is this a possible solution or i need to tell the agency to give me an agreement stating that they will report to the credit bereau or i will not proceed?
My major concern in settlement is will i be able to rebuild credit again after these settlement efforts and money spent?

thanks,

[ks1488]

You may wish to visit the following free website...

(Link Removed By Todd) - Please No Advertising

This website provides complete bankruptcy information and services. It also provides information related to credit repair.

Best of luck to you!

[poorme]

If this account has a negative history, you may be better off without it. I know that some have negotiated to have the trade line deleted from their CR as a condition of sending the settlement payment. You'll have to tell the creditor or collector what YOU want from the deal, and get it in writing from them.

[StaciMM]

This is an old thread, but a couple of things:

A settlement has downsides... It starts the clock again, so the account may be reported for 7 years after you paid the settlement. It is still derogatory-paid or not.

Depending on the forgiven amount, you may get a 1099 and have to pay taxes on it.

If you settle without getting the specific agreement in writing, the creditor may just sell the remaining portion to another company and they will pursue you...

[badgambler]

This is an old thread, but a couple of things:

A settlement has downsides... It starts the clock again, so the account may be reported for 7 years after you paid the settlement. It is still derogatory-paid or not.

Depending on the forgiven amount, you may get a 1099 and have to pay taxes on it.

If you settle without getting the specific agreement in writing, the creditor may just sell the remaining portion to another company and they will pursue you...

Alot of great info..

Also if you are settleing with creditors.. Start with the ones willing to delete the tradeline all together.. I have had many of the wife's tradelines completely deleted for 85% settlement.. Now for deletion you will not get a great settlement percentage... But at that time we were more interested in getting her score up and not so much about saving money..

Also some will say that are unable to report inaccurate information to the credit bureaus and can not do anything but mark it as paid.. Which is 100% true.. They can not report inaccurate information.. However there is no law saying they need to report anything.. Your not asking for them to report false information.. Your asking them to report no information..

Also.. If they are not willing to put it in writing.. Move on to the next creditor, they are and will stick it to ya after you send them a check.. This happens allot.. Like was said above.. They will sell the remainder of the account to a CA.. So tell them.. Nothing in writing.. NO MONEY.. and make sure the settlement letter reads exactly what you want it to..

[bkfiler]

honestly, i would be against paying any creditor you owed from a past that is very long ago. in fact, i would only consider settling with a creditor that brings a lawsuit against you. forget the credit history. its got the bad account. save your money and wait it out.

after years of bad credit sometimes only one creditor out of many will try to sue you.

you have time on your hands to wait. besides if you are trying to protect your assests then file bk imo. its a game they play and the rules can be on your side unless you really do have money at the time to be able to pay them.