CrotchrocketSlm

So, I have a $2000 credit card debt which I must admit, I fell behind on payments on for far, far too long and it is now in the hands of a more unscrupulous collections agency. They are demanding the full amount now, or at least some kind of settlement of about $1660, or they are threatening to sue me. I've offered to make partial payments, as I don't have 16 hundred sitting around, much less $2000. I've consulted with a few credit counselor types, and they suggest that as long as I am making at least 3% of the payment each month, should it go to court, I've at least got it established that I am now making an effort to repay my debts. Is my understanding correct? If this would go to court, would my making regular payments- albeit much later than I really should have- be enough to give me a little protection? Also, who would pay the court costs if I did make payments, and the judge ruled to allow me to just make more payments?

onetime2

I would definitely keep making payments, it shows you are making an effort to catch up. I would not take the settlement to pay less. It will further hurt your credit worthiness.

Not sure about the court costs but the judge would almost definitely take your payments into consideration, so long as they are not just token payments of a few dollars.

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agball

I would try to pay as much as you can as fast as you can. You credit is probably in bad shape as it is. Already it is going to take years before that changes. If it goes to court your credit will be shot for a lot longer.

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SiN

really?

I've done the settlement thing once before..how does it hurt?

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majik_6

I know that in the agency I work for, a settlement shows up on the credit report as having been "settled for less than the full balance", which means that it shows a balance was remaining on the card...essentially a slightly kinder way of charging off the account.

As for the original poster: I know that different agencies have different payment plans available. Some are unable to offer payments, while others can't offer settlements. Even with that settlement offer, it still sounds a little high. In my office, that account would have a settlement offer of approximately 1100.00 USD. I'd recommend trying to figure out if they offer ANY kind of payment plan that would allow you to takecare of the full balance in parts. It looks much better getting the entire balance paid off than to go for a settlement.

One option that may be available is what my company calls the "cure" amount. Basically, it's paying off the past amount due on the card. For the company I represent it allows you to stop the late fees which quickens your ability to pay off the card, since more of each dollar goes to the balance. The agency with your account may not have these options.

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