Collection agency grill? I have an account within collections for about 10K. Its quite recent

I have an account within collections for about 10K. Its quite recent (1-2 yrs). The agency have offered to do a settlement for 4500. I can do this no problem. But they say it will be marked as settled for smaller quantity than the full amount...or something like that. They've sent me papers stating this would be acceptable. My sound out is what does the "settled for less" do to my credit? My credit is already crap but I'm just curious as to what that means. I newly want to be done with this and not end up contained by court.

Answers: This account will be moved from being a derogatory entry to an report under potentially negative item for further review and explicit as paid/setteled for less. This is far better then keeping it planned as a derogatory entry.

You are better off to take the settelment because this debt is somewhat new and they could pursue it in civil court. If it be beyond your states statute of limitations then they would not be able to wish a judgment against you.

As to those who say you will own to report the difference on your IRS taxes, that's is bull !
The IRS does not require creditors who discharge debts to file a Form 1099, no matter how much the debt is worth. Second, although implied, creditors not often file Form 1099 even when the debt remains unpaid.

Paying a settlement for less does not evolution the reporting time for credit reports as per Running of Reporting Period - Section 605 [15 U.S.C. �� 1681c]
As of December 29, 1997 the reporting period runs 7 1/2 years (7 years plus 180 days) from the date (month and year) of the last delinquency (known as "later missed payment:).

Request they send you a written confirmation BEFORE you generate any payment.

LEGAL DISCLAIMER: The advice contained herein is for informational purposes individual. It is not to be construed as Legal Counsel nor Legal Advice. Better model: Ask if they will do a "pay to delete"- they may want more than the $4500.00 but this would completely come off your credit instead of "settle for smaller amount than full balance" which will stay 7.5 years. Make sure to get it in writing. Also you may draw from something stating the additional unpaid balance as income which you would hold to pay taxes on.

"settled for less" is a distrustful remark on your credit report. It is similar to a delinquency and will remain on your credit report for 7 years after the date you paid, or "settled for less," beside the collection agency (i.e., if you pay the $4,500 tomorrow, the negative item will remain on your credit report until 04/23/2015).

It is pretty typical. It is a negative on your credit report, but a whole lot better than "charged off" or "judgment". You can other ask them if they will have the creditor delete or remove the account from your credit report, or sucker it as "paid".

It is a negative easy target on your credit report... BUT it does say settled and also 'account closed', so it shows that you at least took contemplation of it.

It's better than leaving it completely unpaid with an 'account open' status. Not one and only that, but you will no longer have to deal beside collection agencies.

From my understanding of FICO scoring, this is not going to help your win at all, and it could make it even worse because the explanation will have more recent activity presently. This would be bad for you, because after 2 years is when collection accounts start to lose their importance within scoring. Keep in mind this does NOT reset the 7 year reporting period, although I'm pretty sure you know that.

If they show "paid" or "settled" all the negative information something like the account will remain and your score will still be taking a hit. The merely thing that might change is that it will look better to potential creditors seeing that you remunerated this off.

I'd do like Beverly suggested, and try throwing some extra money at them to carry a deletion. If they won't agree, you can go ahead and pay them the $4500 and after 3 or 4 months dispute the list and demand an investigation request...by then they've usually purged their accounts and will just delete the listing.

http://www.creditinfocenter.com/debt/neg... It is better on your credit than a charge off account. But the 5500 will be reported to the IRS as income to you. So if you hold to file taxes, you will pay on the amount they write past its sell-by date.
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