Dispute a Credit Card Debt or Offer to Settle?

NikkiQSM

Quite Involved in Discussions
#1
I have been doing a lot of research lately on credit and how to clean it up - (I am in the process of bringing up my score so I can build a home) - and a question has come to mind from all the articles I have read.

Some articles say that the quickest way to clear debt from your credit report, if you have credit card debt, is to just dispute it. I read an article that explained that most credit card companies dont have the time to prove out you actually owe the money. And it would cost the credit card companies more than you actually owe them to fight the dispute.

Other articles have told me that if you dispute the debt, it can affect your credit score and can even make it more difficult for you to be eligable for a mortgage loan.

And then I have read it is easier to send the companies a letter, offering to pay about 1/3 of what you owe if they take the descrepency off your credit report.

Any thoughts on this? Anyone have any experience with methods of cleaning up their credit report like this?

Thanks for any help :)

:agree1:
 
Elsmar Forum Sponsor
#2
Hmmm . . . very timely topic. I've noticed in my local newspaper, right below the criminal court recap, many instances of a major CC company suing local folks. My research encountered similar crosstalk to what you describe. Long story short, I just fired off a "bare bones" style dispute/ validation level letter for a neglected account... wish I coulda fired off a Supplier Corrective Action Request... :read:
 
Last edited:

Wes Bucey

Quite Involved in Discussions
#3
I have been doing a lot of research lately on credit and how to clean it up - (I am in the process of bringing up my score so I can build a home) - and a question has come to mind from all the articles I have read.

Some articles say that the quickest way to clear debt from your credit report, if you have credit card debt, is to just dispute it. I read an article that explained that most credit card companies dont have the time to prove out you actually owe the money. And it would cost the credit card companies more than you actually owe them to fight the dispute.

Other articles have told me that if you dispute the debt, it can affect your credit score and can even make it more difficult for you to be eligable for a mortgage loan.

And then I have read it is easier to send the companies a letter, offering to pay about 1/3 of what you owe if they take the descrepency off your credit report.

Any thoughts on this? Anyone have any experience with methods of cleaning up their credit report like this?

Thanks for any help :)

:agree1:
Let me suggest that you really ought not make this a "do it yourself" project.

Given your ultimate goal, I suggest you consult with an attorney who specializes in credit matters - get a free referral through your local or state bar association. Typically the first consultation with an attorney referred by a bar association is for a minimal charge and you can get important guidelines for what you should do and, most importantly, what NOT to do.

As a former executive in the investment banking industry, I can tell you many horror tales of folks who tried the "quick and dirty" methods touted in self-help books (especially those of Robert Allen) only to find themselves in deep doo doo.

Above all, recognize that creditors have zero advantage in taking a small portion of what is owed and clearing your credit as if you had paid the full amount. As an individual, you will have little leverage in convincing credit card companies, especially, in cutting you a break. Some are absolutely implacable in the way they treat folks proposing "discounted" payment, since the vast majority of such proposals they receive are NOT made in good faith, but are merely ploys by would-be deadbeats looking to "beat the system."

Added in edit:
I should also mention there are tax consequences in having a creditor forgive a portion of debt, both for the debtor and the creditor.
 
Last edited:
G

gbcqc

#4
Wes,

You are very correct on the tax part. What is forgiven by the creditor is considered income by the IRS. I have an ex-family member that went through this. He did his taxes and did not include the thousands he did not have to pay. About a year later, he got a bill from the IRS along with penalties and interest for close to 3 thousand dollars.

To me the best part was him and his wife thinking how great it was they did not have to pay the debt they owned until the IRS bill showed up. Then they wanted to "BORROW" money from family members to pay this debt. "Sorry, but you credit is bad with me." :nope: :lol:

So be careful.

Greg
 

NikkiQSM

Quite Involved in Discussions
#5
Shifting this topic slightly...

Is it worth paying old debt? Small medical bills that are over 5 years old?

An old cable bill from 6 1/2 years ago?
 

Jen Kirley

Quality and Auditing Expert
Staff member
Admin
#7
Shifting this topic slightly...

Is it worth paying old debt? Small medical bills that are over 5 years old?

An old cable bill from 6 1/2 years ago?
Yes. Along with being the right thing to do, they will remain showing as owed on your credit report unless they are paid.
 

Marc

Hunkered Down for the Duration with a Mask on...
Staff member
Admin
#8
I agree with Miner and Jennifer as long as they are legitimate. I do know people who have disputed bills. Their problem is they didn't dispute them "immediately" (one was an old cable bill for "equipment not returned" which they didn't get a receipt of proof for) and follow through to some kind of closure/agreement.

If you do not start a "dispute file" (so to speak) at the time, and keep at it until resolution, you're the one who has dropped the ball.

My opinion - Pay the bill. Get it paid and out of your life.
 

Wes Bucey

Quite Involved in Discussions
#9
Shifting this topic slightly...

Is it worth paying old debt? Small medical bills that are over 5 years old?

An old cable bill from 6 1/2 years ago?
The nature of the debt collection business is that your long overdue bill has probably been sold at a discount at least once, maybe more times, to a firm or individual which makes a business of trying to collect old debts. Since they buy the debt for ten cents or less on the dollar (actual average is 4 cents), it is a "numbers game" for them, often using "robo-calls" to harass (much cheaper than snail mail) the debtor. This is a VERY lucrative business for most companies in the business.

If you intend to pay off the debt, confirm what entity now holds the debt. Make personal contact to confirm they will settle for less than the stated outstanding amount AND (most importantly) agree to remove any negative data on your credit reports.

Under no circumstances should you just send off a check to the original creditor or any subsequent one without assuring you will get a full release in writing to clear your credit report.

Note that there is a Statute of Limitations for how long a debt can remain on your credit report based on the state you live in. This is usually about seven years, BUT if the debtor makes ANY payment or agrees in writing to resolve the debt in any way, the time table starts all over from that date. Thus it is important to marshal all your facts before agreeing to pay or paying any debt.
 

NikkiQSM

Quite Involved in Discussions
#10
Thank you all for your advise.

I am still working on my credit and was told by a mortgage company to not bother paying off the really old bills since it would not help my credit score.

I was told to just pay off any recent ones...
 
Thread starter Similar threads Forum Replies Date
N AS9120 9.2.2 Objectivity? Dispute AS9100, IAQG, NADCAP and Aerospace related Standards and Requirements 9
JoCam Dispute with Competent Authority Other Medical Device Regulations World-Wide 3
N CMM Layout Data Dispute between two CMM Laboratories General Measurement Device and Calibration Topics 8
B Definition of Calibration Frequency - Dispute during Audit ISO 9000, ISO 9001, and ISO 9004 Quality Management Systems Standards 9
G Dispute - Checking a thin walled, round, hollow part with micrometer Inspection, Prints (Drawings), Testing, Sampling and Related Topics 25
I Supplier Dispute Procedure - parts on hold not yet replaced IATF 16949 - Automotive Quality Systems Standard 1
D Example of an "Internal Audit Plan" - Format dispute with extrnal auditor IATF 16949 - Automotive Quality Systems Standard 5
G Part Submission Warrant (PSW) dispute APQP and PPAP 19
Edward Reesor Exporting from China - Unified Social Credit Code ISO 13485:2016 - Medical Device Quality Management Systems 2
Ajit Basrur Credit Suisse - Advertising Client Campaign Coffee Break and Water Cooler Discussions 1
N Government Help to Clean Up Credit to Buy A House? Coffee Break and Water Cooler Discussions 24
N Does Debt Consolidation Really Help Your Credit Score? Coffee Break and Water Cooler Discussions 7
SteelMaiden PSA - Protect your Plastic (Credit Cards, etc.) Coffee Break and Water Cooler Discussions 3
S Taking credit for CAPA Effectiveness Audits as Internal Audits Nonconformance and Corrective Action 4
N Comcast Equipment Rental - Getting credit for returned equipment After Work and Weekend Discussion Topics 4
Stijloor Suppliers Deserve Credit for Quality Boom World News 0
L Issuing Credit to Customer - Example form / template Nonconformance and Corrective Action 1
Wesley Richardson Identity Theft - It just happened to one of my credit card accounts Coffee Break and Water Cooler Discussions 20
J Where can I get a certification in Credit Risk? Professional Certifications and Degrees 3
S Carbon Credit for using Solar Energy instead of Electricity Miscellaneous Environmental Standards and EMS Related Discussions 6
Marc Credit Union Audit - Social Engineering, the USB Way After Work and Weekend Discussion Topics 2
P Who can give carbon credit certification and what are the standards Various Other Specifications, Standards, and related Requirements 1
Q Internal Auditor Training for College Credit for elective courses Training - Internal, External, Online and Distance Learning 1
E Wall Credit to all ISO 9000, ISO 9001, and ISO 9004 Quality Management Systems Standards 4
S Shelf Life Test for IFU and Implant Card Other Medical Device Related Standards 1
J Is Device Tracking Card an actual requirement under FDA regulation? Other US Medical Device Regulations 0
K Article 18: Implant Card and information to be communicated. EU Medical Device Regulations 5
T Implant Card - Article 18.1(a) and MDCG 2019-8 clarification EU Medical Device Regulations 3
K Article 18 in the Implant Card - Expected lifetime of the device EU Medical Device Regulations 3
K Implant Card - Full Manufacturer's Address - Space issues EU Medical Device Regulations 4
M Informational EU – Guidance document Implant Card relating to the application of Article 18 Regulation (EU) 2017/745 of the European Parliament and of the Council o Medical Device and FDA Regulations and Standards News 2
T Clarification on MDR - Article 18(d) - Implant Card EU Medical Device Regulations 14
W Job Card/Router sign off - Want to go paperless AS9100, IAQG, NADCAP and Aerospace related Standards and Requirements 1
Q VDA 6.3 Process Auditor Card VDA Standards - Germany's Automotive Standards 1
W "New" MDR implant card for absorbable substances EU Medical Device Regulations 6
S Supplier Evaluation - Is a supplier score card a requirement under ISO and QSR? ISO 13485:2016 - Medical Device Quality Management Systems 7
0 Safety Instruction Card and Safety Work Instruction Document Control Systems, Procedures, Forms and Templates 3
S SPC Card for One Sample Size - Customer requires for all critical dimensions Statistical Analysis Tools, Techniques and SPC 8
W Engineers signing off the back of the Route Pack Card AS9100, IAQG, NADCAP and Aerospace related Standards and Requirements 3
C SOP Work Instruction (Job Card) Template Revisions question Document Control Systems, Procedures, Forms and Templates 6
S Serializing Circuit Card Assemblies (CCAs) in EPICOR Misc. Quality Assurance and Business Systems Related Topics 2
G UID Compliance Verifier Calibration Test Card Calibration Frequency General Measurement Device and Calibration Topics 3
DanteCaspian Plastic Card Printer: Looking for recommendations Coffee Break and Water Cooler Discussions 3
S MTTR - MTBF - Machine History Card template form Manufacturing and Related Processes 16
D CCA (circuit card assembly) First Article form 1 requirements AS9100, IAQG, NADCAP and Aerospace related Standards and Requirements 5
Q Reference Card for Dimensions at QC on the Shop Floor IATF 16949 - Automotive Quality Systems Standard 15
JoCam Nadcap AC7120 (Audit Criteria for Circuit Card Assemblies) - Acceptance Criteria AS9100, IAQG, NADCAP and Aerospace related Standards and Requirements 3
R Signal Conditioning Card - Calibration Measurement Uncertainty Measurement Uncertainty (MU) 5
M MRI Marking - The level of information the FDA expects on the Patient ID Card Other US Medical Device Regulations 6
ScottK Card used to indicate Sterilization Status - Australian Medical Device Question Other Medical Device Regulations World-Wide 3

Similar threads

Top Bottom