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In 2008 I sold my home. At the time I owed the first and 2nd mortgage. I paid the 1st off in full however the 2nd I worked out an arrangement with the credit union. I owed them at the time $25,000 and they agreed to accept $10,000 and then give me an unsecured loan for $15,000. However after this financially devastating situation occurred I tended to stick my head in the sand regarding debt. As a result I never signed the unsecured loan agreement even though they sent it several times. The only proof that exists that we had an agreement was email correspondence (I don’t have it, they might). I'm wondering what would happen if I requested proof I owe this debt? They report the $25,000 as paid in full on my credit report.
It sounds like your credit report is fine for the moment but this won't last. No one is going to walk away from 15k debt.
I think if you send a 623 letter to the CU then, they will realize that you mean to cut and run and file a lawsuit.
So my advice is to work something out.
Thanks, I wonder if I have any leverage given the circumstances. I suspect if they did decide to sue they would have a difficult time without good documentation?
After two years? I know you said that you didn't sign the unsecured loan agreement, but didn't you attend the closing?
what state do you live in? The SOL is longer than 2 years, I am sure. Also, could it be possible that they will turn this into some kind of criminal fraud instead of a debt?
They have documentation of the original loan. In my state, mortgages are filed with the land court. If you have not signed the new agreement, the original mortgage rules.
I did not attend the closing, I was out of state. I currently live in FL, the home I sold was in IL. I suspected if I pressed them they would simply make some administrative changes and somehow defalut the origanla loan but not sure. My credit report says it was written off. I understand that does not mean I am off the hook but I'm wondering what I can work out with them. I currently alos have my car loan with them, that payment is current as of the last year after they repo'd it. Additionaly I don't have any lump sum money to offer. What would happen if I offered $300 per month in exchange for the debt cut in half and some better reflection on my report (not sure what to ask for there)?
Thanks
what would their incentive be to cut the debt in half?
they made a loan to you which was not paid.
they cut a deal with you to detach the loan from the property which was not paid.
If they cut another deal with you, they might suspect that you won't pay that either. I do think that they would accept a payment plan.
what about BK?
BK? Is that Bancruptcy? This 15K (aside from a $14,000 car note) and about $3,000 in CC debt is really my only debt. Seems a bit extreme?
You said you didn't want to pay all of this. You can set up a payment plan for the 15k, but unless unless you can make a bulk sum payment of a settlement, I don't see any reason for the amount owed to be reduced.
loan repayment
Hi Guest,
Cinnamngrl is right. Unless you make a lump sum payment on the loan, the lender may not want to agree to any settlement with you. You could not make payments on the first occasion. Even after they offered to change the loan from secured to unsecured, you could not make the payments. Thus, it is very unlikely that they will agree to any settlement offer.
Thanks,
Aaron
Ok, now if I begin to pay even a small amount, does that improve my credit score?
Thanks
paying off old accounts
Hi Guest,
Yes, this may improve your score gradually. If the lender agrees to your settlement offer, you can request them to agree to a "Pay for delete" (PFD) agreement. With a PFD, all the negatives on your account will get removed, and your account will be reported as "Paid".
Thanks,
Aaron