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Two years ago my 20 year old son received a credit card with a limit of $5000, he was 18 at the time. For a year and a half he spent like crazy but was always able to make his minimum. Six months ago he missed a payment, and has not made a payment since. He has not answered any of their calls or letters because he was scared. Since I am an authorized user on the card they recently sent me a letter. It states that he now owes $6,110 and they are willing to settle for $1,260 in four payments of $315. I think this is a great deal because he will never be able to pay it off otherwise. My question is, should we ask for a paid or paid as agreed on the CR or will we even have that option. Would we stand a better chance if we paid the $1,200 in one lump sum instead of the payments? I don't want his credit ruined for the next 7 years. It's ridiculous that a company would give an 18 year old $5000 to play with, he didn't even have a job! Any advice would be appreciated.




My advice would be to let your son deal with this. Time to grow up and live with the consequences of poor choices. Regardless of if he pays any or none, his credit rating will still be effected for up to 7.5 years. Settling a $6000+ debt for $1200 will get him a "settled for less" notation on his credit report and a 1099C for the difference, or they will sell off the balance to a JDB and he'll have to go thru this all over again. Very unlikely that you can get any agreement for reporting or how the balance is handled for that for a 20% settlement. IMHO

Are you positive that you are only an AU and not a joint account holder? AU=no financial responsibility whatsoever. I would contact the creditor and remind them of that. Also, check you r reports to insure taht no derogatory info is hitting your reports.

Sub: #1 posted on Mon, 07/28/2008 - 06:53

NASCAR_Devil NASCAR_Devil
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Yes im sure im only an AU.

Sub: #2 posted on Mon, 07/28/2008 - 07:05

bmblbe69 bmblbe69

(Posts: 84 | Credits: 7.37)

Check your reports. When my DW and I went thru our financial crises 5 years ago, every acct that I was an AU on impacted my CR's until I disputed them off.

Sub: #3 posted on Mon, 07/28/2008 - 08:19

NASCAR_Devil NASCAR_Devil
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I have checked the reports so I am good. Is there a way to stop them from selling it after he settles with them? Whats the point of settling if the balance is going to come back to haunt him.

Sub: #4 posted on Mon, 07/28/2008 - 23:30

bmblbe69 bmblbe69

(Posts: 84 | Credits: 7.37)

That would depend on whether or not he is able to negotiate that as part of the settlement. If he could get to the 50-60% range he would have more bargaining power but since he is looking to settle for about 20% he has no leverage. 75% would be as high as I personally would be willing to go if the debt was still w/in SOL, which it looks like this is. Remember though, that they could just sue for the whole amount.

Sub: #5 posted on Tue, 07/29/2008 - 00:00

NASCAR_Devil NASCAR_Devil
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be sure to tell them that you want it in writing from them that the account has been "paid" and that the matter is considered closed--that way, if they sell it to some junk buyer in five years, all he would need to do is send them a copy of that letter to cover his ass.

Sub: #6 posted on Tue, 07/29/2008 - 01:04

Unregistered


At 20% settlement, that ain't gonna happen.

Sub: #7 posted on Tue, 07/29/2008 - 01:22

NASCAR_Devil NASCAR_Devil
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Guest, have you had this experience? Were you able to get a "paid" with such a small settlement amount? Nascar, do you have first hand experience with this as well?

Sub: #8 posted on Tue, 07/29/2008 - 20:56

bmblbe69 bmblbe69

(Posts: 84 | Credits: 7.37)

I settled an account years ago for around 25% with no aggreement in writing. Several years later, I had a JDB come after me for the remainder. When I reviewed my reports, they had reprted it as "settled for Less"

In another last year, after several attempts to negotioate a settlement on my DW's Discover for 65%, the balance would not be resold but reporting was "settled in Full". Also, I have successfully negotiated 2 PFD's for medical collections. YMMV

Sub: #9 posted on Tue, 07/29/2008 - 21:16

NASCAR_Devil NASCAR_Devil
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On the one that was sold to the JDB's did you end up having to pay the balance?

Sub: #10 posted on Tue, 07/29/2008 - 21:25

bmblbe69 bmblbe69

(Posts: 84 | Credits: 7.37)

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