Advice on what do to about Charge Offs

[credithelp823]

Hello All,

 

I am new to the boards.

 

I have 3 charge offs (First Premier, Macys and Victorias Secret) that are less than $1000 and my credit score is about a 570. On my credit report they are not listed under collections; but as the original creditor. I'm confused, I've been really researching, should I send a debt validation letter or a pay for delete? Because they are charged off, who should I call or write?... The CC company or collection agency?

 

Also do you think I should get a secured Capital One credit card in the mean time to help build my credit back up?

 

I'm trying to apply for a mortgage and I know my score is no-where near getting approved.

 

Please help!!! Thank you so much!

[policebox]

You never send debt validations (DV) to original creditors; you only send a DV to a collection agency (CA). Just because an account has been charged-off does not necessarily mean it's been sold to a CA.

 

If you are interested in making negotiations to pay the debt, then you should contact the original creditor to find out if you can still work with them or to get the name of the collection agency that is handling the account. Just remember, only an OC can negotiate a pay-for-delete to get rid of the charge-off on your credit report. No CA has the authority to delete an OC trade line.

 

As for the secured card, now is a good time to start rebuilding your credit. I won't say whether or not Capital One is the bank that is best for you to go with, that is ultimately up to you to decide. However, when looking for a secured card, you want one that will "graduate" to a non-secured card after you have established a positive history; you want a secured card with a low annual fee; you want a secured card with a grace period for finance charges. Other members who have or who have had secured cards can give further input on this point.

Edited April 28, 2014 by policebox

[credithelp823]

Thanks for responding.... Ah ok that's where I was confused. I wasn't sure what process went to who.

 

Alright so, my credit report lists the charge offs under the OC not under collection accounts. The only reason why I know they are in collections is because 1) I have contacted first premier and they told me that my account is now with a CA and 2) because I receive letters from CA stating that they have my accounts.

 

It doesn't which method I use either DV or pay for delete.... In your experience or opinion which do you think I would work out better with? I'm trying to apply for a mortgage soon, so do you think if I don't pay them that'll it come back and bite me?

 

You suggested that I contact the OC.... Do you think they'll actually talk to me without telling me to call the CA? And also what's the best way to communicate with them phone or mail?

 

I will start researching more secured cards... I'm not sure if Cap 1 "graduates" people.

 

Sorry, I know this is long but I really appreciate it.

[policebox]

Thanks for responding.... Ah ok that's where I was confused. I wasn't sure what process went to who.

 

Alright so, my credit report lists the charge offs under the OC not under collection accounts. The only reason why I know they are in collections is because 1) I have contacted first premier and they told me that my account is now with a CA and 2) because I receive letters from CA stating that they have my accounts. (1.)

 

It doesn't which method I use either DV or pay for delete.... In your experience or opinion which do you think I would work out better with? I'm trying to apply for a mortgage soon, so do you think if I don't pay them that'll it come back and bite me? (2.)

 

You suggested that I contact the OC.... Do you think they'll actually talk to me without telling me to call the CA? And also what's the best way to communicate with them phone or mail? (3.)

 

I will start researching more secured cards... I'm not sure if Cap 1 "graduates" people.

 

Sorry, I know this is long but I really appreciate it.

 

1. In my original response, it was not clear whether or not you knew for certain if the accounts were being held by a collection agency. Now that I know they are, then my answers will correspond to that situation.
2. I think the consensus on the board is, you should always DV a CA with the hopes that they aren't able to validate and thus have to delete the collections trade line from your report. However, you stated that so far there is no CA trade line on your report, only the OC trade line, so DV isn't going to matter for that point since there is no CA trade line on your credit report. I think the other consensus is, if you DV a CA and they are able to validate, then you have to be prepared to negotiate payment on the account since they have proof of ownership. As I stated in my previous posting, if the OC no longer owns the account then PFD is not an option for you. Only the OC can authorize a PFD for their trade line. Often CA will negotiate a PFD to delete the collection's trade line off your report, but that still doesn't touch the OC trade line, and often people are "fooled" into believing the PFD will delete everything. It doesn't, the CA can only delete their trade line (and so far, there isn't one) and only an OC can delete the OC trade line. If you want to negotiate to repay the debt so that it isn't still hanging over your head, then at this point you should try to negotiate a rock-bottom price as settlement with the written stipulation that they, the CA, will never report this to the credit bureaus, not paid-in-full, not settled-in-full, nothing. No reporting. But again, that isn't going to affect the OC trade line. You are stuck with that for 7 years from DOFD, unless you can dispute it off by some of the methods you can find on the board.
3. I suggested contacting the OC because as I understood the original question, you didn't know if they still held the debt or if it was held by a CA. Since you know the debts are held by a CA, then the OC is unlikely to talk to you. However, before anything else, you could make one attempt at contacting the OC, asking them if they will recall the debt from the CA provided that you will pay the account in full (along with a PFD). If you can negotiate with the OC for a recall, but no PFD, then you could try to negotiate for a "paid as agrees, paid in full" notation, that is, something otherwise positive. But if the OC won't speak to you about the account, then you will have to deal with the CA. As for communication, it's always best to get agreements in writing. Most people on the board advocate staying off the phone. However, I believe if you are attempting to make a negotiation then talking by telephone is fine, provided you get whatever agreement is made in writing BEFORE sending money. Also, if you are preparing to talk to a creditor, I advise reading up on some of the threads on the board before doing so, to help prevent any mistakes from happening.

[credithelp823]

Fixing credit is so confusing, but this is starting to make sense to me.

 

1. If I negotiate a settlement that the CA will never report this to the credit bureaus. Now that this debt would be paid, it doesn't clear me from the OC trade line until 7 years (2019). What would I do then to clear that trade line?

 

2. If I can negotiate with the OC for a recall and get a PFD. Or negotiate for a "paid as agrees, paid in full" would this restart the SOL?

 

3. How would my scores be affected? In what instances would it go up or down?

[mindcrime]

1. Falls off by itself after 7 years from DOFD

 

2. No.

 

3. Major damage is already done with 570 FICOs. PFD would be best option next to OCs deleting all late pays.

[policebox]

Fixing credit is so confusing, but this is starting to make sense to me.

 

1. If I negotiate a settlement that the CA will never report this to the credit bureaus. Now that this debt would be paid, it doesn't clear me from the OC trade line until 7 years (2019). What would I do then to clear that trade line?

 

2. If I can negotiate with the OC for a recall and get a PFD. Or negotiate for a "paid as agrees, paid in full" would this restart the SOL?

 

3. How would my scores be affected? In what instances would it go up or down?

 

1. To clear the trade line, if the OC is unwilling to delete, then you'd need to try the techniques used for disputing negative information. That topic is too broad to address in this thread. I'd suggest reading the board to see what other people have done, what's worked, what's not worked, etc. so that you can formulate a plan of attack that will hopefully lead to a good result, rather than making things worse. However, that being said, it's extremely difficult to get accurate information deleted from your credit file (at least it is for me), so the likelihood of being able to get it deleted is slim. You will probably, unfortunately, have to wait out the 7 years from DOFD.

 

2. If you are referring to the SOL for being sued, then provided you come up with an agreement that is satisfactory to the OC, then the account would be satisfied and therefore you wouldn't be at risk of being (validly) sued. Making any payments not under a payment arrangement would, however, reset the clock. So I wouldn't recommend paying anything unless there is a repayment agreement in effect.

 

3. The CO has already had its effect on your score, likely causing it to suffer significantly. It would go up if the CO is deleted or if the status is updated to "paid as agreed" along with having all the late pays deleted. It's likely to go down if a subsequent CA trade line begins to appear. It will likely go down even more if you are sued and have a public record related to the account. The likely scenario is that this will be on your report for a good while, so you should begin your rebuilding efforts as soon as possible. If you get some secured cards and have no further negative entries put onto your credit, then you should be able to rebuild in about 2 years. The impact of the CO will be reduced with the addition of positive trade lines, on-time payment history, and the healing hands of time.

Edited April 29, 2014 by policebox

[JBSmooth]

 

 

Thanks for responding.... Ah ok that's where I was confused. I wasn't sure what process went to who.

 

Alright so, my credit report lists the charge offs under the OC not under collection accounts. The only reason why I know they are in collections is because 1) I have contacted first premier and they told me that my account is now with a CA and 2) because I receive letters from CA stating that they have my accounts. (1.)

 

It doesn't which method I use either DV or pay for delete.... In your experience or opinion which do you think I would work out better with? I'm trying to apply for a mortgage soon, so do you think if I don't pay them that'll it come back and bite me? (2.)

 

You suggested that I contact the OC.... Do you think they'll actually talk to me without telling me to call the CA? And also what's the best way to communicate with them phone or mail? (3.)

 

I will start researching more secured cards... I'm not sure if Cap 1 "graduates" people.

 

Sorry, I know this is long but I really appreciate it.

• In my original response, it was not clear whether or not you knew for certain if the accounts were being held by a collection agency. Now that I know they are, then my answers will correspond to that situation.
• I think the consensus on the board is, you should always DV a CA with the hopes that they aren't able to validate and thus have to delete the collections trade line from your report. However, you stated that so far there is no CA trade line on your report, only the OC trade line, so DV isn't going to matter for that point since there is no CA trade line on your credit report. I think the other consensus is, if you DV a CA and they are able to validate, then you have to be prepared to negotiate payment on the account since they have proof of ownership. As I stated in my previous posting, if the OC no longer owns the account then PFD is not an option for you. Only the OC can authorize a PFD for their trade line. Often CA will negotiate a PFD to delete the collection's trade line off your report, but that still doesn't touch the OC trade line, and often people are "fooled" into believing the PFD will delete everything. It doesn't, the CA can only delete their trade line (and so far, there isn't one) and only an OC can delete the OC trade line. If you want to negotiate to repay the debt so that it isn't still hanging over your head, then at this point you should try to negotiate a rock-bottom price as settlement with the written stipulation that they, the CA, will never report this to the credit bureaus, not paid-in-full, not settled-in-full, nothing. No reporting. But again, that isn't going to affect the OC trade line. You are stuck with that for 7 years from DOFD, unless you can dispute it off by some of the methods you can find on the board.
• I suggested contacting the OC because as I understood the original question, you didn't know if they still held the debt or if it was held by a CA. Since you know the debts are held by a CA, then the OC is unlikely to talk to you. However, before anything else, you could make one attempt at contacting the OC, asking them if they will recall the debt from the CA provided that you will pay the account in full (along with a PFD). If you can negotiate with the OC for a recall, but no PFD, then you could try to negotiate for a "paid as agrees, paid in full" notation, that is, something otherwise positive. But if the OC won't speak to you about the account, then you will have to deal with the CA. As for communication, it's always best to get agreements in writing. Most people on the board advocate staying off the phone. However, I believe if you are attempting to make a negotiation then talking by telephone is fine, provided you get whatever agreement is made in writing BEFORE sending money. Also, if you are preparing to talk to a creditor, I advise reading up on some of the threads on the board before doing so, to help prevent any mistakes from happening.

Awesome Explanation! You just cleared a LOT of confusion up for me as well. Thanks! 👍

[Positivemotion]

Me too!

[credithelp823]

Alright, so its been a while since I responded to this post... But I called all three OC's and nothing. I called each one at least 3x. They did not want to hear me asking them to recall the debt or anything else I had to say. All they did was transfer me to the collection agency.

 

So now that negotiating with the OC is out the question, how do I work on the CA's?

 

On my CR, all the charge off's only the OC are reporting.

 

1. Should I DV first?

2. Should I send a GW letter to the OC?

3. If they can validate, how much should I offer 20%? Also, inside the agreement should I add that they can't report on my CR?

4. Once I pay the CA, can I call the OC and tell them to update the status to paid? Or can I send a dispute letter to the credit bureaus?

 

 

I understand the damage is already done, but if I can get any of the charge off's listed paid or something, will my score increase at all?

 

I think I covered all my questions. I've been reading the boards insanely lately. I just want to get this ball rolling already!

 

Thanks everyone!!!!!

[bmfmustang]

First off, nice job reading up.

1. Personal experience for me suggests to DV all CAs if out of SOL and make sure if they are still in SOL be prepared to pay.

2. GW letter will only work after and if the debt is paid from what in have seen. (Concentrate on getting rid of CAs first)

3. Offer as little as you want. Start low as they will most certainly not accept, but remember they paid 10% on the dollar (sometimes less). I told a few that in my process and I got a better deal.

4. After you pay the CA (make sure to get the pay for delete in writing) and it is deleted you can attempt to dispute the OCs as Policebix mentioned through different methods.

 

Overall GET RID OF CAs first. DVing should drop them pretty quick in 50/60% of cases, in my own experience. You will see a dramatic rise in your score when they go. Away depending on the age.

 

I would get a secured card that graduates if you can. If you can join Navy Federal theirs has no annual fee and has the opportunity to graduate to an unsecured with an often generous limit after 13 months.

 

That's my 2 cents! Good luck!

[bmfmustang]

Sorry, wanted to make sure I was clear to get the PFD in writing BEFORE remitting payment.

[credithelp823]

Thanks so much! I will get these letters out by Wednesday. Any suggestions on what DV letter to use? I was going to tailor one from the Letter Forum.

 

Before I mail it, I'll paste it on here first.

[bmfmustang]

I just picked one and changed it to suit. Try to stay away from the long winded ones. They aren't necessary. Just make sure it's to the point and your demands are stated clearly.

 

Good luck!

[mizliz1011]

two points only from my personal experience... a lot of DoV's end up caving with just having one or two statements...some will bluster and then withdraw- even the big ones. If they are offering substantial discounts in their letters, they probably have "an empty jacket" meaning a file number with no back up. Do NOT accept a computer print out, only original stmts (each month) original signed credit card agreement, licence to operate in your state, and proof that they own the debt...Many of the big collectors do NOT have that. more luck to them if they are the first collector... more luck to you if they are the first or second because they paid less and GOT less...

 

Re: OC's... you may only get lucky if you pay in full... don't try to negotiate..unless its a lot of money they are not going to bother.. unless you get a sympathetic ear. My experience in pay for deletes is -0- and if you pay less than full amount and get full settlement... pray that they mis-report it so that you can threaten them with some violation... until they make some law re OC reporting after they sell the debt...you sort of get screwed..and check your state's SOL and the STATE of the OC's SOL. some states have opined that the original OC state, if it has a lower SOL, rules so far as lawsuits...however, FACRA and CRA's trump on the 7 year tradeline, unless you live in New York. But then Experian won't delete for shorter CRA reporting if it has been negotiated or paid to the CA... write your AG...what state are you in and where are your OC's headquartered???

[credithelp823]

I'm in PA... One CA is called FMS their address is listed as OK. Another CA is Professional Bureau of Collections of Maryland address is listed as CO. I'm trying to find who has my 3rd CO.

 

In the DV letter should I include what you said about "only original stmts (each month) original signed credit card agreement, license to operate in your state, and proof that they own the debt"?

 

As far as the OC's I called each one three times and each time was transferred to the CA. I just wish I could get a sympathetic ear bc only the OC are reporting.

[credithelp823]

SOL in PA is it 7 years or 4 yrs?

[mindcrime]

SOL in PA is it 7 years or 4 yrs?

4