What would you do???

lbomberger · #1 09-28-2007, 01:33 PM

I have a credit card that I have been trying to pay off, and I am somewhat behind on. The other day they sent me a letter to agree to a pay off amount. The payoff is about $400, and the actual debt is about $700. They said that I could pay it off in three payments, but that it would go on my credit report as a "settled debt". Should I take the pay off? I mean isn't it already listed in my credit report as not being paid? Which would look better on my report? Also, I would be paying with a money order, because I don't have a personal checking account.

**colemank** · #2 09-28-2007, 09:55 PM

You know, I would not take the pay off if it were me. I am not sure but I think that the pay off would be different on your credit rating. I don't know. If I were you I would just turn that down and do your best to pay off the credit card... Just pay what you can and eventually it will be paid off.

**Maggie** · #3 10-01-2007, 05:52 AM

Maybe you could ask a banker or accountant how "settled debt" would look on your credit report vs the late pmts. That would give you an idea. I'd be tempted to take the settlement, but I would try to find that out first.

lbomberger · #4 10-03-2007, 10:06 AM

I'm not sure, but somebody else told me that I would have to pay taxes on the unpaid amount because it will be considered income.

tinlizzy · #5 01-09-2008, 08:52 PM

Quote:

Originally Posted by lbomberger

I'm not sure, but somebody else told me that I would have to pay taxes on the unpaid amount because it will be considered income.

This is true. They will send you and the gov't a 1099.

Paying any type of collection company will hurt your credit rating. Keep paying directly to the original debtor even if it has been sent to a collection agency.

SUSIE4339 · #6 05-15-2009, 11:48 PM

I agree with Colemank. Just make your payments as usual. Add an extra dollar or two when you can. It will look good for you.

SUSIE4339 · #7 05-15-2009, 11:50 PM

I agree with Colemank. Don't take the settlement unless your back is absolutely to the wall. Make your usual payments and add an extra dollar or two when you can. It will make you look great. The thought being that they are really trying, but "get it done". Plus it will make you feel really good too.

melanies · #8 10-01-2009, 08:52 AM

If you are paying late payment fees and are paying a lot in interest still I would take the hit to my credit and take the payoff amount.