Credit card issue. Pay in full or settle?

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Agaytan96
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Credit card issue. Pay in full or settle?

Post by Agaytan96 » Fri Feb 08, 2019 1:43 pm

I have a credit card debt with slumber-land through wells Fargo. I had let my brother borrow my credit (I know my fault) he was sent away and I was stuck with the loan. I couldn't pay it as it was more than 400 a month for the payment as they are $4,000+ couches. The debt collector called and told me my options.

Option 1: Pay in full - $4,141.32 as a one time payment or a monthly payment plan of 116.00/month.
Option 2: Settle - $1,656.53 as a one time payment or payment plan with a down payment.

Obviously I would like to settle for 40% of the cost but i'm wondering how it will hurt my credit score, and what option would be more beneficial for me as i'm currently in the process of trying to repair my credit.

I was 18 when this happened and i'm trying to make things right. Can someone please help a sister out???

MDfive21
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Re: Credit card issue. Pay in full or settle?

Post by MDfive21 » Fri Feb 08, 2019 2:20 pm

creditboards.com

please go there because you will get all sorts of wrong information on this forum.

student
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Re: Credit card issue. Pay in full or settle?

Post by student » Fri Feb 08, 2019 2:23 pm

MDfive21 wrote:
Fri Feb 08, 2019 2:20 pm
creditboards.com
+1.

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8foot7
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Re: Credit card issue. Pay in full or settle?

Post by 8foot7 » Fri Feb 08, 2019 2:29 pm

If your credit is already shot, take the settlement. Chances are you have a 30, 60, 90, 120, 150, and 180 late pay, probably a charge-off if you are getting a 40% offer proactively, and perhaps even a collection entry. The point is, this tradeline for you is already as bad as it gets, so paying in full does nothing that paying a settlement wouldn't.
Last edited by 8foot7 on Fri Feb 08, 2019 2:40 pm, edited 1 time in total.

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Kenkat
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Re: Credit card issue. Pay in full or settle?

Post by Kenkat » Fri Feb 08, 2019 2:31 pm

If you take a settlement, it will affect your credit score much more than paying in full. It shows up as a settlement vs. a late pay or not at all depending on how the debt collector agrees to report it.

hayhayday
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Re: Credit card issue. Pay in full or settle?

Post by hayhayday » Fri Feb 08, 2019 3:09 pm

How old is this debt?

hushpuppy
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Re: Credit card issue. Pay in full or settle?

Post by hushpuppy » Fri Feb 08, 2019 4:44 pm

delete
Last edited by hushpuppy on Fri Feb 15, 2019 8:50 pm, edited 1 time in total.
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Topic Author
Agaytan96
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Re: Credit card issue. Pay in full or settle?

Post by Agaytan96 » Fri Feb 08, 2019 4:55 pm

That was very helpful. I do not have any statements but I i'm going to ask for them. Thank you so much.

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Agaytan96
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Re: Credit card issue. Pay in full or settle?

Post by Agaytan96 » Fri Feb 08, 2019 4:56 pm

hayhayday wrote:
Fri Feb 08, 2019 3:09 pm
How old is this debt?
It's from 2016.

mptfan
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Re: Credit card issue. Pay in full or settle?

Post by mptfan » Fri Feb 08, 2019 4:59 pm

Do not agree to do anything unless you follow two rules: 1) get the agreement in writing sent to you from the debt collector before you agree to anything, and 2) follow rule number one. Any words spoken over the phone are meaningless.

hushpuppy
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Re: Credit card issue. Pay in full or settle?

Post by hushpuppy » Fri Feb 08, 2019 5:38 pm

delete
Last edited by hushpuppy on Fri Feb 15, 2019 8:50 pm, edited 1 time in total.
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Olemiss540
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Re: Credit card issue. Pay in full or settle?

Post by Olemiss540 » Fri Feb 08, 2019 6:12 pm

Where is your brother and your 4000 dollar couches?
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Gronnie
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Re: Credit card issue. Pay in full or settle?

Post by Gronnie » Fri Feb 08, 2019 6:53 pm

I used to be in the collections industry. I think you will be able to get a better deal than 40%. I would aim for 25% lump sum settlement.

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whodidntante
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Re: Credit card issue. Pay in full or settle?

Post by whodidntante » Fri Feb 08, 2019 6:57 pm

Olemiss540 wrote:
Fri Feb 08, 2019 6:12 pm
Where is your brother and your 4000 dollar couches?
He was sent away sounds like he is an unwilling guest of the state to me.

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whodidntante
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Re: Credit card issue. Pay in full or settle?

Post by whodidntante » Fri Feb 08, 2019 6:59 pm

Your credit has been torn up and thrown in the trash anyway. I would offer $900 as settlement in full, get that in writing, pay the settlement, and move on with my life. Your credit will become passable over time.

Thesaints
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Re: Credit card issue. Pay in full or settle?

Post by Thesaints » Fri Feb 08, 2019 7:03 pm

Agaytan96 wrote:
Fri Feb 08, 2019 1:43 pm
I have a credit card debt with slumber-land through wells Fargo. I had let my brother borrow my credit (I know my fault) he was sent away and I was stuck with the loan. I couldn't pay it as it was more than 400 a month for the payment as they are $4,000+ couches. The debt collector called and told me my options.

Option 1: Pay in full - $4,141.32 as a one time payment or a monthly payment plan of 116.00/month.
Option 2: Settle - $1,656.53 as a one time payment or payment plan with a down payment.

Obviously I would like to settle for 40% of the cost but i'm wondering how it will hurt my credit score, and what option would be more beneficial for me as i'm currently in the process of trying to repair my credit.

I was 18 when this happened and i'm trying to make things right. Can someone please help a sister out???
Isn't your debt with Wells Fargo and not with slumberland ? Also, how could a $4,000 charge generate $400 in monthly payments ?
Last edited by Thesaints on Fri Feb 08, 2019 7:05 pm, edited 2 times in total.

Jack FFR1846
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Re: Credit card issue. Pay in full or settle?

Post by Jack FFR1846 » Fri Feb 08, 2019 7:04 pm

Offer the debt collectors the couches.
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8foot7
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Re: Credit card issue. Pay in full or settle?

Post by 8foot7 » Fri Feb 08, 2019 7:27 pm

Gronnie wrote:
Fri Feb 08, 2019 6:53 pm
I used to be in the collections industry. I think you will be able to get a better deal than 40%. I would aim for 25% lump sum settlement.
What OP needs to figure out is if Wells Fargo still owns the debt or if it has been sold off and the collector actually owns the debt (as opposed to just collecting on retainer for Wells). Wells is tough to work with and 40% is a good outcome if they still own the debt. Although I see now the debt is almost three years old, which in some states is running up close to the statute of limitations for debts--you should research what this is in your state. But that runs from date of first delinquency, not the date of the contract, so you'd count out from the first missed or short payment.

If indeed it's 3 years in your state, then you have a couple of options: point out to the collector that you're a couple of months away from SOL barring their ability to sue and you'll give them 400-600 to extinguish the debt; do nothing and hope they make a business decision not to sue you before the SOL expires, which is entirely possible; or accept their 40% offer, which is not a bad deal.

If it's longer than 3 years and Wells owns the debt, then honestly the 40% is a good deal. Maybe you offer 25% as Gronnie suggests but I think you'll find Wells is really not great at working with you on these deals and the 40% for this to be out of your life forever is a good call.

If the collector owns the debt, then they've bought the debt for 2-3 cents on the dollar. 40% is way too high, and if you offer them 10 cents on the dollar you've done them a huge favor. They'll huff and gruff to make a show ("But you originally owed $4,000!") and you'll disarm them ("I know but you paid $120 and I'm offering you $400") but they'll take that deal.

IMO
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Re: Credit card issue. Pay in full or settle?

Post by IMO » Sat Feb 09, 2019 3:05 am

Agaytan96 wrote:
Fri Feb 08, 2019 1:43 pm
I was 18 when this happened and i'm trying to make things right. Can someone please help a sister out???
It seems like people on the site have good advice on how to get out of the situation with as little financial hit as possible. Seems like your BROTHER did you wrong, and your brother ultimately should be making things right to you in the future. Hope it all works out for you.

This isn't meant as any personal "shot" at you, but I always find it odd that when it comes to someone failing to fulfill their obligation on some debt, that the natural response (as you see on this forum responses) is to make the bank/creditor out like that entity is the "bad" player in life. Why is that? I've always looked at it in the sense that If I borrowed money, I signed my name that I was good for paying it back as agreed. Even if I listen to Dave Ramsey, it never seems that there is the response on credit is to do the "right" thing and make good on one's debt. Instead, it's just the bank is the bad person.

Again, just me, and with that said, I do hope it all works out for the best for you.

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legio XX
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Re: Credit card issue. Pay in full or settle?

Post by legio XX » Sat Feb 09, 2019 9:45 am

hushpuppy wrote:
Fri Feb 08, 2019 5:38 pm
Agaytan96 wrote:
Fri Feb 08, 2019 4:55 pm
That was very helpful. I do not have any statements but I i'm going to ask for them. Thank you so much.
Also be sure not to make a small payment "in good faith". Many states have statute of limitations for how long they can wait to sue you in court over a credit card debt. Three years is common. Typically, any payment you make allows that statute of limitations to be extended.

Good luck with getting the statements. If you make a request for validation of the debt, (usually in writing on their form) they should at least provide you with some statements. You need to insist on all of them. A favorite tactic of the collection agency, or their attorney in court, is to just show the last statement, or wave around some statements, knowing a judge is likely to accept the last statement at face value without actually totaling payment amounts and asking something like: Really Mr. Slumberland attorney, it looks like the defendant has already paid for the couch three times over - can that be right? Exaggeration, but you get the idea.

hushpuppy
+1 on this and all the similar warnings. Pay an honest debt? Yes. Let the lender or collection agency run over you? No way. The advice to get copies of your statements and be able to show what you owed for the merchandise, what you have paid and how much of the claimed debt is interest and fees is a basic first step. (I take it you get your credit card from Wells Fargo and made the purchase at Slumberland. Which is dunning you? Your credit card co has to send you copies of statements, but they may make you pay a fee for them. Get them!) Once you make it clear that you are willing to pay your debts, but that you will not send any payment until you have a clear and acceptable agreement in writing - and that it will be scrutinized before you sign it - you may get a reasonable response.

Is there any advice available to lower income consumers in your area? It may be minimal, but worth a try -you might find a pro bono lawyer to scrutinize the agreement for a token fee. That kind of thing. In any case, it will take a while to repair your credit so be patient and don't let them spook you.
Good luck.
Last edited by legio XX on Sat Feb 09, 2019 10:11 am, edited 1 time in total.

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legio XX
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Re: Credit card issue. Pay in full or settle?

Post by legio XX » Sat Feb 09, 2019 10:10 am

IMO wrote:
Sat Feb 09, 2019 3:05 am
Agaytan96 wrote:
Fri Feb 08, 2019 1:43 pm
I was 18 when this happened and i'm trying to make things right. Can someone please help a sister out???
<snip> I always find it odd that when it comes to someone failing to fulfill their obligation on some debt, that the natural response (as you see on this forum responses) is to make the bank/creditor out like that entity is the "bad" player in life. Why is that? I've always looked at it in the sense that If I borrowed money, I signed my name that I was good for paying it back as agreed. . . . Instead, it's just the bank is the bad person. <snip>
A bank that gives an 18-year-old a 4K+ credit line - based on what ability to repay? - probably is a bad player. Although it doesn't change the fact that OP owes for what she allowed to be bought in her name, Wells has hardly been a good corporate citizen. They no doubt have a well worked-out business plan that includes the likely losses from what is barely a step above loan sharking. They're crooks even if they operate a nanometer inside the boundary. As financial advisors they were miles outside it. In an ideal world, OP would have been taught by age 18 to recognize a bad deal and told Wells to stuff their 24% APR card. I haven't been to that place yet.

OP, the question as to where these couches are now is a goodone. You are being dunned for a debt incurred to help your brother. Asking whoever has this furniture to pay for it, or to sell them for what they can get and give you that money, is reasonable. Somehow doubt that Slumberland will take them back, but it won't hurt to ask what they would refund if you did return the couches (factor in the cost of doing this). Those were not cheap furniture so they should still be worth something after only two years and they are yours, not your brother's. Even a couple of hundred $$ "on account" could help you a bit.

hushpuppy
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Re: Credit card issue. Pay in full or settle?

Post by hushpuppy » Sat Feb 09, 2019 1:20 pm

delete
Last edited by hushpuppy on Fri Feb 15, 2019 8:49 pm, edited 1 time in total.
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fortfun
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Re: Credit card issue. Pay in full or settle?

Post by fortfun » Sat Feb 09, 2019 1:30 pm

legio XX wrote:
Sat Feb 09, 2019 10:10 am
IMO wrote:
Sat Feb 09, 2019 3:05 am

A bank that gives an 18-year-old a 4K+ credit line - based on what ability to repay? - probably is a bad player. Although it doesn't change the fact that OP owes for what she allowed to be bought in her name, Wells has hardly been a good corporate citizen. They no doubt have a well worked-out business plan that includes the likely losses from what is barely a step above loan sharking. They're crooks even if they operate a nanometer inside the boundary. As financial advisors they were miles outside it. In an ideal world, OP would have been taught by age 18 to recognize a bad deal and told Wells to stuff their 24% APR card. I haven't been to that place yet.
Agreed about WF. I still don't understand why so many people still do business with them, even if they haven't had any problems with them. Who's to say they won't be the next victim. I can't believe schools are letting them in their doors to teach about financial literacy now, ughh...

phxjcc
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Re: Credit card issue. Pay in full or settle?

Post by phxjcc » Sat Feb 09, 2019 8:55 pm

Be aware that if you settle, the difference between your settlement and the amount of the debt may be reported as income for this tax year.

So your cost will be greater than just the settlement amount.

hushpuppy
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Re: Credit card issue. Pay in full or settle?

Post by hushpuppy » Sun Feb 10, 2019 1:28 pm

delete
Two dogs are better than one. One dog needs to have at least one companion that can consistently measure up to standards. Humans need not apply.

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