Should you payoff or Settle a Charge-off?


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. The debtor is in the best position to negotiate with a creditor once the statute of limitations has expired on a debt. Major banks such as Citibank, Chase, Bank of America and Wells Fargo often settle debts for as little as 20% of the original amount charged-off, however, such a low settlement is most likely when the charged-off amount was 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 if you come to an agreement with the collection company. In the event, the collection account is linked to an unrecognizable or frivolous account then you can challenge it using debt validation. But this will not remove charge-off, which will still remain on the credit report as a paid charge-off account.

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