Should you payoff or Settle a Charge-off?

payoff or Settle a charge-off

Should you payoff or settle a charge-off? This is a common question that comes to our minds. If the charge-off is valid and accurate then you can look into settling the charge-off. Although every creditor may differ, it is very common for them to offer negotiated settlements on charge-off accounts.  Once the statute of limitations is expiring on a debt, then the debtor is in the best position to negotiate with a creditor. Major banks such as Citibank, Chase, Bank of America, and Wells Fargo often settle debts. This is for as little as 20% of the original amount charge off.  However, such a low settlement is most likely when the charge-off amount is a few or several thousand dollars. The lower the amount the less likely it is to get a significantly lower settlement.


For instance, for a charge-off amount of $300, the creditor is not likely to reduce the settlement amount. However, if the account is being reported by a collection company, then you may be able to settle in exchange for deletion. This is if you come to an agreement with the collection company. In the event that the collection account is linked to an unrecognizable or frivolous account. Then you can challenge it using debt validation. But this will not remove the charge-off, which will still remain on the credit report as a paid charge-off account.


If you want to lesarn more about how to payoff or settle a charge-off, you can avail our free credit help.


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