Internet's first get-out-of-debt community - 168,000 members

Posted: Fri Mar 21, 2008 10:16 pm Subject: settlement

My 26 yr. old daughter just settled a debt for $1400. Original debt was 3239.25 c/o Direct Merchant.
We settled with Worldwide Asset Purchasing LLC:cc Protocol Recovery Service.
We made arrangements for a post dated check to be drafted on Mar.26. Did we make the right decision? How does this affect her credit? She originally tried to pay this bill through CESI debt management but the creditor would not cooperate. In the meantime she has paid off her other debt through the CESI program.

dogwatcher · Posted: Mon Mar 24, 2008 2:23 am Subject:

Guest · Posted: Mon Mar 24, 2008 5:06 am Subject:

Her credit will be affected because she has not been paying the debt; to settle the debt will be better for her credit than leaving an unresolved debt on her report.

Guest · Posted: Mon Mar 24, 2008 5:07 am Subject:

Make sure you get the settlement in writing; most creditors will not state the debt was paid when in fact it was settled. They have an obligation to report accurately.

Posted: Mon Mar 24, 2008 5:20 am Subject:

When dealing with creditors, get everything in writing! That goes double when dealing with collection agencies, for they are sneaky, and not to be trusted...

Posted: Mon Mar 24, 2008 3:06 pm Subject: Yes, definately get it all in writing

Make sure when they put it in writting that the settlement letter-offer is on their letterhead, that the account is referenced (account number as well as the original creditor) and that the person in the signature block is authorized to make the settlement.

Also, make sure the letter states the who, what, when, where and how:

Who: Them and You
What: Account Info and Settlement Offer
When: The Payment Agreement (post-dated check)
Where: to send the funds and
How: to send the funds (FedEx?)

Also, I would make sure that they include in the letter that they will mark the account as Settled in Full and zero out the balance in your credit file. If the account is getting a settlement offer, then it is most likely far behind in payment. So, the damage to your credit is done. If the account was closed due to nonpayment, then your balance-to-credit ratio was upside-down (meaning you owe an amount greater than your available credit on that account). If the account went into charge-off, then the worst (besides bankruptcy) mark is already on your account. So, zeroing out the account may actual help... how much it helps depends on a lot of factors.)