What should be my next step

Hi all,

I have been working hard on repairing my credit and since I was able to save up some cash I want to move things forward and pay a debt back. Currently, I have 3 outstanding issues on my report:

1) A collection posted for credit card A
2) A collection posted for credit card B
3) A collection posted for credit card C

Credit card A: I received a collection letter, replied back with DV and never heard back from the collection agency. On my report I only have one 'CO' (Derogatory) reported in Nov 2010, no further updates were made on that account.

Credit card B: I received a collection letter, replied back with DV and never heard back from the collection agency. On my report I have 'CO' (Derogatory) reported in Nov 2010 and they keep updating it every month.

Credit card C: never received a collection letter, just calls from the bank.On my report, it has been updated very month with 'CO' (Derogatory) since July 2010.

My question is: I currently can only take care of either one of those accounts. When i save more bucks in the future, I plan on paying back the other ones as well. Which one should I go with first in your opinion? If A or B, should I contact the collection agency with a POD letter or should I contact the creditor directly? If C, should I just go to the bank and pay it off or should I POD?

Thanks!

Who are the creditors and collection agencies?

Dealing with a collection requires a few pertinent dates.
There are three main issues to deal with, and the dates governing those issues need to be provided.

The first issue is the legal collectibility of the debt. If your state statute of limitations on the type of debt has expired, you no longer have a legal obligation for repayment. To determine the status of your debt, you need three primary things. You need to know what date your state SOL legislation sets for the running of the SOL, the SOL period for your type of debt, and finally, the specific date for each of your debts that triggers the running of the SOL.

The relevant delinquency that usually triggers the running of the SOL is the date that you first went delinquent, and have not brought the account back into paid as agreed good-standing. That date is usually the same as the DOFD on the OC account, but be cautious, since some state SOL statutes have provision for certain conditions that can reset your SOL, such as payments against the debt.

Once you have determined the legal status of the debt, the next step is usually to determine how long each derog in your CR will remain if you should do nothing. The FCRA establishes, for a collection or charge-off, a CR exclusion date of 7 years plus 180-days from the DOFD on the OC account. That is one, single, date-certain that cannot be updated unless an account has been returned to good-standing.

So you MUST know your DOFD for each collection and charge-off in order to do any planning.

The second major issue is whether any of the derogatory items reported to your CR can be challenged as to their accuracy. If so, disputes should be made using one of the two FCRA dispute processes.

Finally, you must determine what you are trying to accomplish. If payment of the debt is the sole objective, then the solution is easy. However, if you want to gain credit score improvement, then paying the debt wont accomplish that, as payment does not delete the derogatory reporting to your CR. The normal tactic is to offer the creditor or debt collector what is called a PFD offer, which is an offer to pay that is contingent upon their agreement to also delete the prior derogatory reporting from your CR.

With those basic concepts in mind, can you provide the date of your DOFD, and if you know it, the relevant provisions of your state SOL statute?