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Question By
DS1985

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Paying a delinquent account?
Hello all,
I have a few questions regarding delinquent debt and credit reports. I have an account with a balance of 13,144. I was recently offered an amount of 3,200 to consider the account satisfied. I don't believe the statute of limitations has expired yet as in Florida it takes 5 years and I believe this was the end of year 4. anyway, I am worried about the ramifications that this will have on my credit report. My report is already in the dumps but I have been working very hard to improve it. I am worried that if I accept this offer that the account will remain on my credit report for another 7 years. Do I roll the dice and just hope that I don't get sued and let the account fall off in 3 years or will it not increase the amount of time on my credit report if I make a payment?

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Nothing restarts the reporting clock, it's 7 years 180 days from Date Of First Delinquency, it dosent go by any other date except that one and can NOT be restarted. If you aren't sure when it's that? Give Credit Bureaus a call, they can tell exactly when was the DOFD.

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However, by paying it might restart the SOL clock of getting sued. That's if you entered a firm/signed payment arrangement with the debt owner/collector and stop paying it later on, as it can be deemed as a brand new contract.

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Beware that "at times" the collection agencies would sell the remaining balances or the whole account to another CA without telling them about the your settlement. Get everything in writing when deal with CAs.

Reply by
DS1985

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Thank you so much for the reply.  That answers my question and i honk paying this off is a no brainier.  Last question though.  the account is still handled by the original creditor.  Does that make any difference to what you told me?  I just ask because I noticed that you said "CA"

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It will fall off your credit report at the same time whether it's paid or not--they go by the date you became 30 days delinquent on the original account. 
As for settling, I would do it if you have the means. That is a relatively large debt, and many collectors may find it worth the trouble to sue you over it. If that happens, it will be for the entire 13K+, and then you'll not only have the collection on your credit report, you will have a judgment as well. From what I've read, a judgment will drop your score by about 75 points. You really, really don't want one of those! Another plus: your collection account will be marked something along the lines of "Paid for less than full amount" and closed. A closed collection is infinitely better than an open collection, not so much for a difference in score but for the difference in what your report SAYS should anyone read the content (and any potential creditor will). 

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