Debt Settlement

[ChunkyMonkey]

MB888, that brings up another question. Can I do a settlement on a debt, then the company sell the "left over" debt to a different company and then I'm responsible for that too?....

No. Settlement or arbitration is a debt reduction where you and the CA agreed on a reduced balance as payment in full.

A lot of CAs will try to trick you to pay part of the debt on the phone as 'debt settlement.' Do not pay over the phone based on verbal agreement. Do not sent any payment unless you see it in writing that it will be your final payment as the debt is settled.

[Elhuero]

I guess this is where the confusion comes in for me (highlighted red)...

Even when I settle, it's not PIF?
I'm still responsible for paying back the full amount even after I settle? When can they start coming back after me for the rest then?


... hope that makes sense. Thanks for your help/answers.

I'm not worried about the damage to my credit as it's already shot to sh!t. I owe the money, I would loved to pay it back plus interest... but settling sounds like a life saver right now....

if you settle, it's not paid in FULL it's paid as AGREED. You're basically making a deal. You agree to pay them some of what you owe and they agree to accept it and quit bugging you.

Lets say you owe 10k on a credit card. You are way past due and accept a 40% settlement. They're not going to take 4k and say you paid ten, your credit will show that you took a deal.

Your credit will not be "clear", but it will be a damn sight better than having a charge off or worse yet a bankruptcy. You won't have to pay more.

But down the road if you want to buy a house, the mortgage lender may require your credit to be "clear", which would mean you'd have to take care of those settlements.

EDITED TO ADD: MB888 knows what he's talking about

[BigBear]

if you settle, it's not paid in FULL it's paid as AGREED. You're basically making a deal. You agree to pay them some of what you owe and they agree to accept it and quit bugging you.

Lets say you owe 10k on a credit card. You are way past due and accept a 40% settlement. They're not going to take 4k and say you paid ten, your credit will show that you took a deal.

Your credit will not be "clear", but it will be a damn sight better than having a charge off or worse yet a bankruptcy. You won't have to pay more.

But down the road if you want to buy a house, the mortgage lender may require your credit to be "clear", which would mean you'd have to take care of those settlements.

Understood, but what exactly does (red) mean? i.e. I paid the 40% based on the 10K, so now I need to contact the original credit card (or collection agency) company and tell them I want to pay the other 605?

[BigBear]

No. Settlement or arbitration is a debt reduction where you and the CA agreed on a reduced balance as payment in full.

A lot of CAs will try to trick you to pay part of the debt on the phone as 'debt settlement.' Do not pay over the phone based on verbal agreement. Do not sent any payment unless you see it in writing that it will be your final payment as the debt is settled.

Rgr, I've been burned before. I always ask for things in writing on letterhead paper with ink signature (not .pdf'ed in, etc).

[10x]

I deal with legal issues all the time for my employer.
I am not a lawyer, but deal with them all the time.

If you are going to settle make sure you get a settlement agreement that states that the entity owed the money settles in full for $X for all debts known and unknown, releases you from any liability and can take no further action against you. You can also add that no negative reporting will be made to any credit entity. I have a standard format, but it is at work and I only work Mon, Tues and Wed. If you still need on on Monday, I can send it via email. Just PM me.

[Elhuero]

Understood, but what exactly does (red) mean? i.e. I paid the 40% based on the 10K, so now I need to contact the original credit card (or collection agency) company and tell them I want to pay the other 605?

You'd have to pay the remaining amount (6k) so that the original, full amount is paid. (paid in FULL)

In the years I worked credit cards I never personally heard of anyone that did this, but it does happen.

[ChunkyMonkey]

But down the road if you want to buy a house, the mortgage lender may require your credit to be "clear", which would mean you'd have to take care of those settlements.

EDITED TO ADD: MB888 knows what he's talking about

As long as it is settled.. there is a trick to remove them completely off your credit report

I only know from experience dealing with creditors and being a 'creditor' myself. I think a bankruptcy lawyer is the ultimate expert on this topic.

[BigBear]

You'd have to pay the remaining amount (6k) so that the original, full amount is paid. (paid in FULL)

Yes, understood. But to whom? The CA or the original CC?

As long as it is settled.. there is a trick to remove them completely off your credit report.

Please share, PM if deemed nessicary.