Is it better to pay a judgment in full or settle for less?

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neptunejcw
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Is it better to pay a judgment in full or settle for less?

Postby neptunejcw » Sat Dec 01, 2012 1:42 am

This Monday I'm going to take care of this judgement that capital one has against me. The attorney's office did mention I could settle for a lesser amount but I'm trying to see if its better to pay it in full or settle for less.

I'm trying to have my credit look as good as possible & I need a little advice. I owe $1,400 but I remember saying I could settle for around 900.


neptunejcw
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Postby neptunejcw » Sat Dec 08, 2012 4:16 pm

No replies :(

AvailableCredit
 
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Postby AvailableCredit » Sat Dec 08, 2012 5:01 pm

Depending on the terms of the settlement, the bank could report the unpaid amount to credit bureaus, and so you could save a few hundred dollars but end up with damaged credit. However, I'd guess that it's already been reported anyway.

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Postby MemberSince99 » Sat Dec 08, 2012 5:05 pm

To creditors, of course either way is going to be a black mark. It may make some difference if you apply for something and get decline you can say you paid them off in full. But if you could do that, you would have been better off avoiding the judgement in the first place which will remain on your record for years to come lowering your score and making it harder to get credit. Not meaning to pass any judgement (bad pun) just pointing it out.

Now if they will delete the tradeline from your credit if you PIF, that would be WELL WORTH paying the extra 500 for. Ask your attorney if they would agree to this. If so, it would be foolish to try to save 500 bucks then because in the long run you will pay that and more for other credit down the road if that's your only black mark. Also Cap One is known to eventually forgive from what I've read and PIF may give you enough goodwill that after a few years have passed you can get back in the door (probably won't work for a while).

I'm just thinking that if all you want to do is save money, yeah they may well settle for 900, but see if you can't get the tradeline deleted for paying in full. You said you need your credit as good as possible, and a charge off and judgement is going to hurt it. You have nothing to lose by offering the worst they can say is no.

That would be my advice.

Hey wait a minute you must mean a suit right rather than a judgement. A judgement means they already won where a suit means they filed and you have to go to court. I doubt they would negotiate a judgement they would just garnish your wages. So this is still in progress right?

If so and you settle the judgement would not appear on your credit HOWEVER the charged off tradeline will unless you get them to agree to delete it. Again that's worth paying in full to get.

Finally be aware that if you settle for 900, they will file a form with the IRS that they forgave 500 in debt, and you will pay taxes on that as the IRS considers that as "income". If you are in say the 30% bracket, count on being taxed enough that you aren't really saving much money on a settlement. It all adds up to where I think just PIF is the way to go and try to get them to remove it as part of that from your credit.

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Postby pc510 » Sat Dec 08, 2012 6:44 pm

I am curious to hear this too. Thanks for input and am hoping to hear some more.

neptunejcw
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Postby neptunejcw » Sat Dec 08, 2012 7:32 pm

The judgement was put on back in 09, I was laid off at the time. They took me to court & at the time I ain't know what judgment was. They won & I owe. Now who would I ask for the pay for delete. capital 1 or the attorney's office... Me saving the 500 doesn't matter if its better to pay in full I will. I'm just hoping the pay for delete works

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Snowman
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Postby Snowman » Sat Dec 08, 2012 7:36 pm

Neptune, If I were you I would PIF, and ask if they can pay for deletion (if your goal is to have good credit, you wanna try to keep any negative stuff off your CR's as much as possible.) Ask C1, the attorney's office I don't think would be able to do anything for you.
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neptunejcw
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Postby neptunejcw » Sat Dec 08, 2012 7:50 pm

I will give them a call Monday & see what they say. & of course my goal is to have good credit lol

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Postby MemberSince99 » Sat Dec 08, 2012 9:07 pm

Agree with snowman, you would ask C1 to delete it. Failing that, send their executive office a letter asking them to do it as a "goodwill gesture". If you google "goodwill pay for delete" it should give you more information.

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Postby Snowman » Sun Dec 09, 2012 1:51 am

And if that does not work, I have heard people filing a complaint with BBB. That might get them to take up whatever you are requesting.
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