Debt Settlement from Discover Card

Brian,

I will not like to have that term 'settled' in the credit report. It puts a wrong impression in front of my future lenders. Since they are giving you a discount up to 40%, negotiate more to get better results. Give them some options like you will be paying in one time. If they are stuck with that reporting, try to get some more discounts. The more you negotiate, the better results can be expected. Remember, they will like to have their money back.

About all you can do is ask, maybe offer to pay more than they are asking,but less than the full balance in exchange for more favorable reporting, or deletion all together.

Thanks for the advice, I called Discover and spoke to a representative in their Credit Assistance department about possibly getting a more favaorable rating somehow (instead of the "settled for less than the full balance") while using the 40& settlement offer. The rep seemed like he didn't care either way. He said the account will be charged off at the end of the month and paying it will send a " permanmently closed by grantor" plus "the settle for less than the full balance" reports to the bureau... resulting in a R5 if paid instead or a R9 if unpaid and charged-off. What do you think? Should I keep calling to see if another rep can do something different or what?

Call back until you get the result that you want. I've found if you bother them as much as they're bothering you, they'll settle down and start acting human again.

Since you are paying this account, your ratings are definitely going to improve. But your main concern is to have a favorable reporting in your file. Keep negotiating with someone else if it helps. I guess the company is holding their point because they are offering you the discount. I will prefer paying off the account in the priority and thinking about the ratings

How big of a deal is it R5 vs. R9? I ask because money is tight right now - New Orleans resident (lost everything in the storm)... But, I need to get my credit back in order to buy a house as soon as possible.. mortgages are cheaper than rents !?!

Basically, the ratings are keenly reviewed by the future lenders who will be offering new credit to you. R9 rating will catch higher interest rates than an R5. Besides, the lenders review many other factors before granting new credit. They see how many accounts you have used thus far. Your payment history is also studied in case there is any risk of lending credit.

Those who pay at their own within the due dates get R1 ratings. R9 ratings are for those people who have delinquent accounts. So, you can see yourself placed in between.

They do not go lower than 40 % I worked there and they are in no way allowed to .UNLESS you are dying or are very ill and can provide proof or you have recieved a letter indicating a lesser amount (they have copies of the letter and amount).they have a matrix and they usually settle for 80-60% so if you got a letter you are lucky because they dont send them to every one .And you are right they dont get upset if you dont settle because they will write off the loan anyways it does not make a difference .As for saying that they account is settled ? if you settled on the debt why wouldnt they indicate that on your credit ? they are following the law and reporting what really happend.

Does anyone know how to go about getting a 40% settlement from these jackasses at Discover card? I called today and offered to pay off my $2400 balance at 40% and they said they wouldn't do it. They said my account "isn't eligible." I know that credit card company systems are set up to keep you in debt, but I can't for the life of me figure out why they would offer one person a settlement and not another.

Any suggestions or advice???

They will usually offer you a settlement if you have not been making payments to them for some months. That is the case with me. They sent the letter on their own after about 6 months of nonpayment (because I'm trying to settle all my credit cards). So I stopped sending payments to all, and so far, 2 have offered to settle on their own.

Just a guess here, but I would think that they'd also be looking at what the balance consists of. Interest and fees would probably be more negotiable than would the principal.

Quote:

help...is it true that you have to pay capital gain tax if you "settle" with a cc co.

If more than $600 is waived/forgiven/whatever, then that money is to be reported as income, and you are liable for the taxes on said income.

I negotitated 35% today. From my wifes account. It is like over $5k but $1100 is from fees and intrest (loan sharks are cheaper). It has be nearly 6 months since they got anything. The said they would back date All intrests and fees to $3900ish. and I would get a better credit rating or they would settle for 35% and send me (and IRS) a 1099 for the difference, but the credit rating would be an R9 (R9 "Charge off to bad debt" ). My wife credit blows anyway so it is not like it is the only bad rating on her credit card. I agreed to the $1700, but I am calling back to her supervisor tomorrow and see if she can do any better than the R9

Do they set you up on a payment plan or to you have to pay all?