Charged off Credit Accounts-Need Help

[SyLph211]

I have asked and reasked on other credit type boards and it either goes unasnwered or someone recommends a credit/debt consolidation serivce. We are not that far into debt that I want to spend that much money to clean up what I might can do on my own.

Here we go:

I have 3 credit cards that are now currently in collections. They were charged off from the originators and sold to the current collection agencies that are reporting on my credit.

The amounts are 1). 1528.00-charge off was 998.00
2) $717.00-charge off was $717.00
3) $623.00-CA charge off was $656.00

Now with all that said maybe someone can direct me in a way in how to deal with the collection agencies and getting these items paid for. I have no idea how to deal with any of this but really would like to get them paid for and back on a better road! Any help would be appreicated.

Do not offer comments about how I should have done this before they went to collections or any of that junk. Maybe this will help others along the way who might want to get out of debt collections also!

[poorolrich]

Just talk to them when they call/write a letter. Most collection agencies will accept payments although they sure won't advertise it. It probably is already on your credit report so good look on the road back.

[chyilan]

It's already charged off and in collections, so your credit score already took a little dive, no matter what. What I have learned in past experience is you can either:

Ignore them and do not send any money, and after the statute of limitations, (which is 5-7 years depending on which state you live in) they legally cannot collect from you.

Or, you can let them keep calling you and settle it, but tell them you can only pay like only 20 percent of each charge off total. Keep telling them that is all you can pay until they agree (or until they are at an amount you feel comfortable with). Then have them agree to send you in writing (before you send any payment) that they will send you a letter stating that the account will be marked paid as agreed, and also have them report to the three credit agencies that the account will be marked paid as agreed, once the account is paid. Get this letter first. After you get this letter, then you can send payment. An account marked "paid as agreed" is better on the credit report than an account marked "charge off", even if you paid in full.

I wish I knew this when I was younger (and naive) and paid my ex's charged off accounts in full, thinking it would keep my credit in excellent shape. It did not.

HTH:)

[JrandMdB]

Since the accounts have been charged off thats whats going to show on your credit report.. so paying them off now wont really benefit you a great deal. I personally had this happen to me before and what I did was ignore the collections for several months and then I started answering their calls and asked for a settlement on the account. Most places will offer a settlement if its in collections but just make sure if you pay them off, be it in full or a settlement or even payment arrangements... keep all the info on what you paid and to whom because so many of those collection agencies will take your money and not clear it on your credit report as paid... GL!

[tmsmalley]

Just call them and ask if you can make a payment plan or if they'll take a reduced amount (assuming you've got a little pile of money you can throw at it). Often they'll do half or 3/4. Remember though that if they take less, you'll have to claim the difference on your taxes. So, say they clear your $1528 for only $1000. You'll have to claim the $528 part on your 2009 tax return as other income (they'll send you the earnings income form in the mail at tax time).

I recommend against ignoring it for a long timer or indefinitely. They can also sue you for it in small claims and some creditors definitely will do that. You'll either get a judgment against you and garnish your wages for it (even worse for your credit), or you'll have to pay the whole amount before the court appearance to get them to cancel it.


Tess

[JrandMdB]

Just call them and ask if you can make a payment plan or if they'll take a reduced amount (assuming you've got a little pile of money you can throw at it). Often they'll do half or 3/4. Remember though that if they take less, you'll have to claim the difference on your taxes. So, say they clear your $1528 for only $1000. You'll have to claim the $528 part on your 2009 tax return as other income (they'll send you the earnings income form in the mail at tax time).

I recommend against ignoring it for a long timer or indefinitely. They can also sue you for it in small claims and some creditors definitely will do that. You'll either get a judgment against you and garnish your wages for it (even worse for your credit), or you'll have to pay the whole amount before the court appearance to get them to cancel it.


Tess

I have had these charge offs in the past and have never had to claim anything on taxes so I dont think that holds true in all states or situations...

as for ignoring the collections for a long time... what I have done is a couple of months at most and then start trying to negoiate the payment plan or amount. Collection agencies are often switched on these accounts because the original lender has already charged the account off and now they are only using the collection agencies to possibly recoup some of the loss... most of the collection agencies are only going to get .50 on the dollar if they are lucky.. thats a whole diff story there tho.. lol

[SyLph211]

I have done a little research and garnisment of wages in not allowed in SC. The collection agencies have a small XX year window in written agreements (credit cards) to file a judgement against you. The statue of limitations is 3 years in my state. I really am trying to do the right thing and pay back what I borrowed. I am not trying to run from them until it cancels out. I really would just like to get a soild course of action that would allow me to do things correct and thus avoid them taking my money, selling it to another CA and then I am out my money.

Thanks everyone so far for your insight!

[Jillibean]

DO NOT use a debt consolidation agency. They will take your money and may or may not do what they claim they will do. You can do it yourself. You can settle for half, if not less, if you talk to them. If they start to get nasty or rude with you, give them one warning that you will not be talked to in this manner and if it happens again during your conversation they will hear a dial tone. They will call back and be nicer the next time. Always get any settlement that you all agree on in writing first before you send them any money! Make sure that it says somewhere on the agreement in writing that when the amount you all have settled for is recieved by them, it is settlement in full on the account with no recourse (meaning they can't change their minds and come after you later for more). Make a copy of the check or money order before you send it and keep the copy with the letter they sent you stating this is settlement in full FOREVER! You may have to prove later that you paid this. (Can you tell I'm a Dave Ramsey believer?!?). Good luck to you. I'm going through some of the same stuff right now.

[manders13]

Op- thank you for starting this thread!

I made alot of mistakes when i turned 18 and i have about 30k or so im in debt.

I saw a commercial, for morgen drexel. called and signed up untill i saw they charge $1000, plus 50 a month PLUS 35% of whatever they settle for you!!

My first though after cancelling was i'll call and make arrangements for payments... (that didnt work) after speaking to an attorney, since the debt is 5+ yrs or older and has all been charged off, paying it is an option but it won't make my report any better. So i don't know what im going to do. I'm intrested to see these responses!!

[vickib50]

One note about statute of limitations; if they file the suit and even if you are not served or not found, the statute has been satisfaied. They can continue to serve you for, in some cases, 10 years. As long as the case if filed against you within the statute of limitations, It's a valid claim.