Oh Man, I don't even want to talk about how disappointed I am about this month's (ahem) increase*.
The biggest hit - in my opinion - came from the fact that I realized I had been including air conditioning on my car's worth estimate despite the fact that I have no A.C. in my car!
There is also the severe lack of cash due to paying all my bills basically over the weekend and today.
I also have remained committed to tithing - mainly cause I'm superstitious - but, also because It's good karma.
Hopefully, some of that good karma is starting to come back though. I called the Collection company today and asked them if I paid off the collection in full this week if they would take it off my credit. The collection agent asked me "let me talk my manager and call you back" she called me back 3 minutes later and told me "We can't take it off your credit...but will you pay it all anyway?"
I said "no, I'll pay off $420 with a check I'm sending today, and pay the rest of slowly" we then exchanged pleasantries and said goodbye.
here's where the negotiation kicked in without me even knowing it...
About 10-15 minutes later I get a call and it's the Collection agent "hi Reggie, it's Boopsie from Dooey Cheetum & Howe Collections. I just talked to my manager and we're willing to offer you a settlement-in-full offer if you pay $620 this week rather than the $420 you're about to send in."
In other words they are willing to knock off $600 off my debt since they finally found a 'live one' for the day.
I reluctantly accepted with the personal reservation to negate said agreement if I determine "settlement-in-full" on my credit ends up being worst then "paid-in-full". I'll charge the $200 to my new 0% card at the end of this week and then pay it off once I get the bill. But, honestly, does anyone know the answer?
Does settlement-in-full look worse compared to paid-in-full to lenders? Or are they all the same thing?
Obviously if they're the same thing it's a no-brainer here.
Anyway, I digress. Time to work on some goals for the month ahead.
7 comments:
Reggie,
Hi ... enjoy reading your blog. I believe a settled in full will be like a grey mark where if you did not pay at all it would be black mark.
But I wish you and others would not worry so much about how it looks. You are working so hard to get out of debt I hope that you would not consider getting back in once you have escaped.
The only thing you should need to borrow for is a house and you don't need a good FICO score. Just have a good job for a couple years and pay off all your debts. Then find a bank or mortgage company that will 'manually underwrite' your loan. That means they will actually look at your situation as a human and not a number.
Settle the debt and get it over with and don't worry about the credit report. Chances are if you are in collections it probably already doesn't look too good.
Keep on going. You'll have good days and bad. But you can do it!
I would have taken that deal, even if I had to borrow the remainding $200 from a relative
Thank you both for the input. I will definitely be taking the 'deal' then so I can hopefully get the debt behind me.
I'll give them a couple days to let them sweat.
CWG & MoneyMonk thank you both for reading...
NO NO AND NO!! That is NOT a "deal." Paid, settled - doesn't matter. It's still a collection. The damage is done. Get them to remove it completely. They will do it for the money...trust me. You have the leverage so use it to your advantage!! This is the ONLY way it will benefit you. Otherwise, you're paying for nothing and the account will remain for 7 years AFTER the date of last activity.
*sigh* Even if you don't follow my suggestion, if you don't do anything else, get all agreements IN WRITING before sending ANYMORE money.
Thank Single Ma,
Here's the thing, I DID ask them specifically if they would take the collection completely off my credit.
Boopsie talked to her Manager and called me back and said because I had a prior collection (from 2 years ago when I had no idea how to get out of debt) they could not take it off. They stated, if it was the the first collection that they had they could take it off completely, but because this is the 2nd collection they had there wasn't anything they could do about the tradeline.
I honestly don't want to fool with it too much more. The longer it stays on my credit as unpaid - the more annoyed I'm gonna get.
If you read this before Friday Single Ma - what would you do if there's absolutely no way to take tradeline off your credit? Pay it in full or settle for the lower price? Curious. Like you said - the damage is done.
A settled in full is slightly worse than paid in full because it shows you didn't completely pay the debt. Also, in most cases, debt that is written off is declarable as income so you will have pay taxes on the amount that you didn't pay the collection agency.
I disagree with cwg about not needing a good FICO score to get a house. First, your FICO score determines the interest rate you get. Even a 1% difference will costs you TENS OF THOUSANDS of dollars. Secondly, I don't know if you've been watching the news but lenders are no longer doing subprime (meaning someone with bad credit) loans. In addition, even those with good credit are being put through more hoops (i.e. larger downpayment, larger cash reserves required).
I can't answer your question because if it were me, I would not care that they said "there's absolutely no way to take the tradeline off your credit?" I call your bluff and check your mate. You want MY money, here's the only way you are going to get it...
When I say 'the damage is done,' I say that to mean you have nothing to lose. You are at an advantage to use your money as leverage. Don't you realize YOU are in the driver's seat? One day, I'll write a post to explain the collection agency business model. Perhaps it'll make things more clear. But until then...
Why are you in such a rush? Again, the damage is done. Whether you pay in full OR settle, your credit will still be jacked up. That in and of itself should be what annoys you the most. In my opinion, you should be more concerned about salvaging your credit, not only how much you're going to pay.
If you believe everything they say just because they sent you an official looking letter that says you owe them money, give me your address so I can send you a bill too.
If I were in your position, here's what I would do:
1 - Go peak around on creditboards.com
2 - Research the collection agency's name, learn their tactics, and read about how others dealt with the same agency
3 - Research the statute of limitations in my state to make sure the time has passed so they can't sue me to collect
4 - Search the boards for a sample pay for delete letter
5 - Decide how much I can afford to pay
6 - Revise the letter to fit my personal situation
7 - Fax or Mail it certified, return receipt requested
8 - Give them 48 hrs to respond.
9 - Do NOT talk to them on the phone, get ALL agreements in writing
10 - When they agree to delete, then and only then will I send the money
If you follow those steps, the notation of paid in full or settlement and the impact it will have on your credit won't matter because your ultimate goal is to get the account REMOVED.
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