Donna asks…
What does “settlement reported” mean on a credit report? It says it’s potentially negative.?
I think that it means that a payment settlement happened, however I never actually paid anything off with this creditor, so I’m not sure what’s going on. It says the balance is now $0 when it was over $300.
answers:
They probably wrote it off. And it is definitely negative on your credit report, whether you do end up paying it or not. But BEWARE….just because they wrote it off does not mean it cannot continue to haunt you. They may try to reactivate the debt after the traditional 7-year statute of limitations (by recontacting you)… Or… Other collection agencies can offer your original creditor pennies on the dollar to “buy” that debt, and attempt to collect on it. If anyone calls you regarding that debt DON’T admit that you owe it (even if you do). Ask them to prove it in writing that you owe it. They likely will not bother. If they do and you pay it make sure they report it correctly immediately – stay on top of them. They don’t like to do their job right.
James asks…
Can I receive settlement from car payments?
I was rear ended by a drunk driver. The police came, took her in, etc. Now I have GAP insurance and the balance of the loan will taken care of. What about the 13,000 dollars I have put into payments on the loan. Because of her actions I am stuck with nothing. Can any of these payments back? Why should I have to scramble for a down payment on a new car for her stupidity? Is this something I can expect from her insurance or would I have to take her to court?
Forgot to mention the car was totaled out.
So basically because off this drunk driver I have to scramble to find money for a deposit on a new car. One in which I wouldn’t have to do if it wasn’t for her stupidity?
answers:
Normally you would just get fair market value for the damaged car, assuming it was totaled. Since you also had GAP, you would have any balance over the fair market value taken care of, and your loan paid off. The money you already paid is the cost of using the car for the time that you had it. You are entitled to be compensated for your loss, and that loss is the fair market value of the car. You are not entitled to make a profit on that loss.
Bottom line, no, you can’t get more compensation than your loss. Let’s say for lack of real figures that you had a $15,000 car that you owed $15.000 on, and insurance paid it off. That’s the end of it, you are not entitled to get a down payment for a new car on top of that.
Jenny asks…
How does negotiating a settlement with your credit cards affect your credit on a long term basis?
I have a credit card B of A, they seem more willing to negotiate a lump sum rather than reduced payments. How negative is a settlement?
answers:
It is somewhat better then a charge off. It would all depend upon how much the settlement was for. They will report it as being paid in settlement but will also show the remainder owed as charged off.
Unless they agree to a pay for deletion, it will be on your report for 7 1/2 years from the date last missed payment.
However it will go from a derogatory to a potentially negative entry and the affect will diminish over time. Creditors will see that you at least came to an agreement and met your end of the deal.
Hope this helps answer your question.
Robert asks…
are there any debt settlement companies that are legitimate?
I have several old debts at least three years old that have been put into collections…haven’t been able to pay on any in years. Looking to pay off but cannot make very high monthly payments so the CCS seems like it wouldn’t work since I have SO many creditors to work with and so little money. The credit counseling pays off the whole balance due which has been greatly increased unecessarily. Looking for some debt reduction and a monthly payment option. Is debt settlement right?
answers:
Credit Repair: Self Help May Be Best
http://www.ftc.gov/bcp/conline/pubs/credit/repair.shtm
The National Foundation for Credit Counseling
http://www.nfcc.org/
Self Help Credit Union
http://www.self-help.org/
Joseph asks…
Has anyone received a settlement payment from the Ameridebt case yet as of July 2008?
answers:
Not me!!!
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