I have been paying minimum payments on 2 closed credit card accounts. In the next couple of months, I’ll be getting a lump sum of cash, to then pay off some debt.
I’m wondering if anyone knows if I can call the CC company and offer them a set amount to settle the account. Do they do that? If they would, does that get reflected on my credit report? How low can I offer? I used to be months behind on payments, but have since caught up, and pay my minimum payments on time. Thanks!
Yes you can call and ask for a settlement but from what I understand you may not be successful if you are not behind. I am not 100% sure but you should always call and ask.
It does reflect on your credit and it does reflect negatively. I confirmed with one of my creditors that the difference between what the balance was and what you paid will reflect in a 1099-C which means that you will have to pay taxes on it.
There has been discussion on how low you can offer. Some have said to start as low as 20% and possibly expect to pay up to 35-40% but I am not sure and I don’t have any personal experiences with it. At least yet. That’s what I am working on now. Settling my debt.
I used to be months behind on payments, but have since caught up, and pay my minimum payments on time. Thanks!
First there is no such thing as “on time payments” on a closed account. Once an account is closed the balance is due in full immediately.
I’m wondering if anyone knows if I can call the CC company and offer them a set amount to settle the account.
Yes you can and that is an excellent idea. As for as them accepting a settlement that will depend on if they think they can get the full balance from you. By paying them each month you have put yourself in a position of being one that they can get the full balance out of. I know you were trying to do the right thing but the CC companies NEVER try and do the same so you really have to learn to play harder ball than them.
If they would, does that get reflected on my credit report?
Again depends on the CC company and the terms of your settlement. I would suggest a pay for delete settlement.
How low can I offer?
Whatever you want! That is what is great about “settlements”. You start the ball rolling and let them come back and keepgoing until you both agree. Just make sure you get it in writing! I suggest you start at 10% of the balance owed.