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two old chase collections - what to do?


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I'm helping a friend with a credit issue.

 

He has two chase credit cards that he stopped paying around 2010, but made payment plan payments 2010-2014.  No payments have been made since 2014, but both collections on his credit report show last payment/updated 2015.  We only have the online reports so far, not the full paper reports yet.

 

The accounts aren't with a collection agency, they are with chase directly.

 

Chase is offering a big settlement on these.

 

What do you all recommend for him?  Should we try a generic not-my-account dispute first?  dispute the date of last payment?  try to settle with delete?

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Depending on when in 2014 the Agreement was made, it may be something that is due to fall off in the near future. 

 

If there is not resolution, expect a 1099-C from Chase.  It would be then up to you to deal with the IRS on the liability.

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What state? I think you are in MD? Your friend too? At any rate, this is beyond the SOL for being sued in almost every state, so they have no leverage. He may be able to get a cheap pay for delete, but he has to ask. It's prob close to falling off anyway.

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I'm merely going to capsulize the information touched on here ...

 

It would appear that the payment agreements entered into 2010-2014 were sufficient for Chase to classify the account as current in payments.  With an agreement lapse in 2015, this appears to represent the "Date of First Delinquency" (the date at which the account became delinquent and wasn't subsequently brought current).  If so, then as suggested, this account will drop from your credit report in 2022.

 

Once Chase determines that the account isn't likely to be settled, it will most likely issue a 1099-C for the defaulted amounts.  This  will result in income for your friend against which taxes are due, unless he files Form 982 attesting that he is insolvent, i.e. that his outstanding liabilities exceed his assets.  (See IRS pub 4681 for add'l info).

 

I personally wouldn't advise disputing the debt with the CRA's.  Chase is likely on top of the reporting and will reaffirm the tradeline reporting.  He can, of course, respond to the settlement and offer to pay what he can.  Because this is likely due to be deleted by the CRA's within the coming year, I wouldn't consider that a linchpin on which to hinge the acceptance of an offer.  Of course, precisely because this is due to drop and (as legaaleagle2012 notes) they can't sue, he may wish to ignore Chase altogether.

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