Old debt

Hi Davidboura
If you have a charge off account, your lender will report this status to the three CRAs and it will reflect on your credit report as "Charge off". This is detrimental to your credit score and will remain in your credit report for 7 years. However, it should be kept in mind that charge off does not necessarily mean that you are not liable for the payment, and the creditor might sue you until the SOL of your state runs out. So it is always advisable to pay back the debt.
As your account has already been charged off, you can negotiate with the creditor to fix a repayment plan for your debt. Once you repay the debt in full your credit report will read as "Paid Charge off", which is certainly better than what it is now. But it should be kept in mind that even if you come with an agreement with your creditor and pay off your debt in full, the negative spot will remain in the report for seven years.

Yes, I too agree with Laura. If you want to improve your credit score I think you should work with small amounts of new credit to rebuild your score. But make it a point to repay these small credits in time.

LAURA..I remember having a similiar discussion, with you, about 'how fast' to pay off bad debt. I'm curious..9 if you know). if you DO pay off bad debts, can you send a letter to the CA asking to take the debt off of your credit? Is he CA obligated to do this? I think you DID respond to this question at one time. I just don't remember what you said..sorry.

YOu can ask them for a PAY FOR DELETE but, they are not obligated. The chances of getting a PFD after the debt is paid is....small. I would always get the PFD agreement in your written contract before payment

I appriciate the honesty. Sometimes, when people are TRYING to 'clean up' their credit, CA's make it ALMOST impossible..almost like they have 'you over a barrel'..ya know?

Each side has a certain amount of leverage...a CA can try to compel payment (i.e., lawsuit --> garnishments, etc...), a debtor chooses whether to pay or not. Nice does not work* in a CA; but firmness and fairness does better (especially when the debtor provides some cooperation, like disclosing employment, income, and bills).

*Nice collectors do not pull in money fast enough, and are fired quickly. One could theorize that a nice collector, if given the time to build a large file of slow paying accounts would eventually collect more. However, this is only conjecture--it is not reality and is thus meaningless.

Good point Morningstar. I still have to think that there has to be some equal level of both firmness and a little compasion. I think it would be a fair assumption that most people did not ask to fall behind on debt. Showing a little more compassion could help build that relationship of trust between debt collector and debtor.

Isure the heck din't wanna fall behind in payments, etc. A 'bad marriage and lack of funds ( or shall i say, the funds were there. However...ex SAID he paid bills and never really did.) 'Starting over' I guess you can say.

I appriciate the honesty. Sometimes, when people are TRYING to 'clean up' their credit, CA's make it ALMOST impossible..almost like they have 'you over a barrel'..ya know?

That is exactly the impression that they WANT you to get. Nobody owes money to CAs who hasn't been through some kind of a speed bump in life and is trying to get their ducks in a row. Nobody will give a CA money that cant really afford to give if they don't feel as if they have to.

It's very much like the big ol' bully who gets your milk money with just the threat of harming you. If that bully was a 5 foot 110lb weakling you would laugh your butt off and walk away. The bully uses his size to intimidate you out of your money like CAs use your debt and guilt with plenty of bullying to get your cash. [/code]

That is correct to a point. What if big ole bully can back up his threats and take you to court? Doesn't it then become another game? If you get in front of a judge is HE gonna understand you only have x amount of dollars to contribute to the bill monthly? What if he allows a garnishment that is sizable enough to cause even more distress. I am not trying to play up the down side I just wonder couldn't it very well hapen that way?

They will sue you, I had one file the paperwork and then keep putting off the court date until I got the account paid off and believe me I know that if I would have missed one payment they would have definately pursued the court hearing, once it was paid off they dropped the case completely.

Then another filed a summmons, and it is still hanging in the balance for 2 years, I am still looking into seeing if it can be dropped because there has been nothing down on it at all.

If anyone knows the answer I would LOVE to know.

That is correct to a point. What if big ole bully can back up his threats and take you to court? Doesn't it then become another game? If you get in front of a judge is HE gonna understand you only have x amount of dollars to contribute to the bill monthly? What if he allows a garnishment that is sizable enough to cause even more distress. I am not trying to play up the down side I just wonder couldn't it very well hapen that way?

Actually, an old land lord and I sued each other about 5 years ago and she won more money than i did. Once the letter came with the judgement all i had to do was send the court a letter explaining that I had limited funds and I only had to pay $20.00 a week until it was paid. The court was VERY helpful.

Also, they dont garnish your wages as soon as a judgement is made against you. You have to not pay the judgement and the plantiff returns to court and asks for the garnishment.

I am not sure what the amounts are but if they are not high enough they chances they will sue you are small. And if you make a payment you could be restarting the seven years. I had account of 8000, 4000, 1000, 5000, 3000, 900. and i did not pay a single cent on any of them. I know I was young and irresposible. I did send the letter to verify the debt and to show them that I actually owed them the money they said, which of course they couldnt. But it did get them to stop calling me. Now i just recieve settlement letters in the mail ever month. In one year they are going to be past the statute of limitations for my state, and by 2010 the seven years is up. Maybe I got lucky, but I think unless you can settle in one full payment it is not worth it to set up a payment plan. Best to just start over and start building a new good credit history and dispute the negatives on your report.

yes, the SOL starts either at the last payment or last date of mutual activity. So a CA who asks you to make a small goodwill payment on an old debt is trying to reset the SOL.

Hi maryannp,

I have answered to your query at http://www.creditmagic.org/card/owe-amount.html#50735 . Hope this helps.

If you have any other query regarding this feel free to discuss in the forum.

Thanks,

Aaron