I need help with Chase settlement offer

[lowcash]

Chase recently sent me offers to settle for less than owed on 2 cards I had with them. One is settling a $1,600 card for 406$ and one is a $7,600 card for $1,900. they are 3 years charged off. If I pay them off will it help my scores even though it’ll show paid for less than owed? Will it make it easier to dispute to attempt delete after payment of the debt. And last but not least will they send me a 1099c trying to tax me on the amount I saved from original debt? I live in Texas if that matters. Tia

[shifter]

I only have bad news for you. 

 

No. No. Yes. 

[hdporter]

@shifter concisely nail this.

 

First, congratulations on securing excellent terms for settlement with Chase.  This may feel a tad like a hollow victory, given the answers you've secured to your questions.  However, were you to try to secure a mortgage prior to these CO's dropping from your reports, your mortgage lender would likely have required the settlement in any case; possibly under less attractive terms.  Plus, this puts to bed the collection attempts and the potential threat of litigation.  So, feel free to party a bit once this is taken care of!

 

Just to recap briefly:  No real score benefit; FICO treats paid CO the same as unpaid.  And Chase is pretty reliable in affirming reporting in response to any disputes (paid or not).

 

Yes on the 1099C, but remember there's a "Get out of Jail Free" card:  If you demonstrate you're insolvent (meaning that were you to settle all outstanding debts, you'd have no assets left; i.e. your liabilities exceed your assets), you can avoid liability for taxes on the settlement benefit.

 

There's a tax form for this, Form 982.  It's straightforward; you provide a summary of assets/debts and net them out.

 

 

[legaleagle2012]

Better than being sued for the whole $9200 plus legal fees, which is a distinct possibility if it's within SOL.

[lowcash]

3 hours ago, legaleagle2012 said:

Better than being sued for the whole $9200 plus legal fees, which is a distinct possibility if it's within SOL.

It says in paperwork they can’t sue me already.

[lowcash]

Thanks everyone for the answers. I’m now more hesitant than before to not just let it drop off. Once I make a payment I make the debt fall off timer reset right? So 7 more years from payment date. Would a lender for a car see paid and weigh that in whether to finance or doesn’t matter either way? I want to do the right thing both for my wallet and my credit. 

[Why Chat]

4 hours ago, lowcash said:

It says in paperwork they can’t sue me already.

You would be foolish to accept their offer. You would not help your credit in any way and you run no risk in letting it age off your reports. Make sure you have opted out to prevent your report data being sold to data miners who will sell the accounts to unscrupulous collection agencies. Get your reports and make sure there are no unknown addresses or duplicate SS#s .

https://whychat.me/GUIDEBOOK.html

[shifter]

5 hours ago, lowcash said:

Once I make a payment I make the debt fall off timer reset right? So 7 more years from payment date.

No. 7 years from Charge Off date, but the CRAs typically will delete at just under 7 years from DOFD. Payment doesn't change reporting. 

[hegemony]

23 hours ago, lowcash said:

Chase recently sent me offers to settle for less than owed on 2 cards I had with them. One is settling a $1,600 card for 406$ and one is a $7,600 card for $1,900. they are 3 years charged off. If I pay them off will it help my scores even though it’ll show paid for less than owed? Will it make it easier to dispute to attempt delete after payment of the debt. And last but not least will they send me a 1099c trying to tax me on the amount I saved from original debt? I live in Texas if that matters. Tia

if it is out of SOL the only way paying makes any sense is if you got a PFD which Chase is not known for doing or if you are told you have to in order to qualify for a mortgage.

[hdporter]

2 hours ago, hegemony said:

if it is out of SOL the only way paying makes any sense is if you got a PFD which Chase is not known for doing or if you are told you have to in order to qualify for a mortgage.

 

@lowcash, please take this to heart and treat it as you would gospel.  

 

(the fact that your defaults are beyond the SOL, evidenced by Chase's statement that they won't sue, shifts things considerably).

 

[lowcash]

Thank y’all so much! Saved me a ton of money. I want to do the right thing but if paying is of no gain and all loss I’m going to wait it out. I have no plans to get a mortgage. I guess I’ll opt out and attempt some delete/verify on some accounts and hope it has some luck like way back. 

[RehabbingANDBlabbing]

I have settled a few charge offs over the past few years. Chase was the cheapest to settle at just around 10-12% of the balance. I settled with them mainly to prevent permanent blacklisting and because the offer was so good. But there are no guarantees they will let me back in, ever, TBH.

 

Anyway, I settled some other accounts as well. Knowing what I know now, I probably shouldn't have wasted my time and money doing it. It was only worth settling when I was under the threat of a lawsuit from an original creditor. I beat every debt buyer that sued me and I just paid my attorney fees to do that, which was much cheaper than settling. But after my accounts hit the SOL, there really wasn't any benefit to settling stuff. 

 

I still get denied credit for negative accounts and payment history, regardless of whether the accounts were settled or not. Settling also didn't help me get anything deleted. Most original creditors just will not do a pay for delete, and even if they do report something inaccurate, I have had to sue almost all of them to get anything deleted because disputing did not work. 

 

If the account is out of the SOL in your state, save yourself time and money by not settling. Put that money to work on something else that is much more important.