Re: ASG-Accounts Solutions Group

Posted by Drew (24.59.27.46) on December 17, 2003 at 13:21:57:

In Reply to: Re: ASG-Accounts Solutions Group posted by Andrea on December 17, 2003 at 12:50:09:

A tradeline is a listing of an account under a creditors name.

If the tradeline is from a collection agency, it goes into a separate section on your credit report that is called collections and the account collection is listed there. If the account is listed as a collections it is always bad and it hurts your credit really bad. Paid in Full on a collection account is a little better than settled in full or settled. Paid in full means you no longer owe anything and a collection account stays on your credit report for seven years after the date of default. Settled in full means you didn't pay the whole amount but the account is considered paid. They cannot sell the remaining balance to another collection agency. Settled means that you didn't pay the entire balance, and that is all they are willing to take for you but they will then turn around and sell the remaining balance that you did not pay off to another collection agency who will then reinsert its tradeline into your credit report. Now for one account in collections, you might have several collection agencies in your report. That is credit suicide.

They offered you in writing to settle listing it under the original creditor. Normally creditors cannot do that unless they are collecting for the creditor and the creditor has authorized them to do so. If this is the case and the creditor has agreed to a settlement with the offer being paid in full and reported under their tradeline, then that is a good thing. A better solution would be to pay in full with that tradeline so there is no outstanding balance and the balance owed reads zero. It looks a lot better.

One other consideration though on settling with original creditor (make sure you get it in writing), is that if the agreement reads as settled in full, and the remaining balance is over $1000, I do believe that the original creditor is required to report this on a 1099C to the IRS. It will be considered loss income to them and income to you which you will then be required to pay taxes on that deficiency balance at your tax rate whatever that might be.

Make sure you get everything in writing and the words settlement in full (which will prevent them or the OC if they have the account from selling it) and their terms for tradeline inclusion. Make sure the collection account tradeline is deleted.

Just my opinion.

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