Wiki User
∙ 10y agoThe simple answer is..a settlement is an agreement between the creditor and debtor for repayment of a specified amount of the debt, thereby ending the transaction (hopefully). A charge off is the action taken by the creditor after an account has been in default for 180 days. The debt is still owed and the creditor has several options to collect monies owed, including legal remedies such as a lawsuit.
So if it is then paid will it show settled on the credit report? And if so is it a big difference between the two as far as credit score goes?
If you decide to just ignore the debt, you still owe it to someone. A charge-off with a $0 balance looks much better to potential lenders than a charge-off with a $5000 balance that's still in collections. Plus, the creditor (or any collection agency willing to buy your debt for pennies on the dollar) can come after you in court YEARS later. Here's an example: You owe Sears $4000 on your Sears Card but haven't paid in 8 months. Sears charges the account off and holds the paperwork (they have up to 6 years in most states to come after you). Joe's Collection Agency goes to Sears and buys your account from them for $160. Now, Joe's can call you and offer a settlement for $2000 and still make a boatload of cash. The charge-off shows as "sold/transferred" on your credit report, and you also have a charge-off from Joe's with a $0 balance. What I would do: Talk to the creditor and see if there's a way to settle out of the account and have it removed from your reports. It's often called a "pay for removal". Just make sure you get their promise in writing.
The question might be better phrased "Should I pay the balance in full or pay the amount of the settlement offer?
Paying the balance is ALWAYS better. Why: To a risk manager, a person who pays their balances in full is a much better risk than a person who does not.
A settlement, on the other hand, though necessary for some, is not the preferred choice. Why? Several reasons;
1) By definition, a settlement is some amount less than the full balance. Before you pay any settlement, first have IN YOUR HAND a copy of the settlement offer from the firm making the offer. If you do NOT have the hard copy in your hand, it is YOUR word against theirs and the next collection agency will be after you again in a few months for the difference between what you paid and the balance - which will very likely be higher because of added interest & cost of collections. This can haunt a consumer for years.
2) Any time you agree to a settlement and the difference between what you paid and what you owed is equal to or greater than $600., the IRS requires the financial institution that "gifted" you the difference must send you a 1099C at year's end listing the amount of that gift. You then count this "gift" as taxable income for the year in which the settlement was paid.
3) For those who are concerned about their credit report scores, it is easier to remove a "balance paid in full" from the credit bureau report than it is to remove a "legally settled for less than the full balance".
Think about a settlement carefully before you decide. You cannot go back later and pay the difference. I would evaluate the amount of my savings in the settlement against the my tax liability at year's end and the increased cost of interest that I will pay over the next 7.5 years. My credit score is very likely going to drop as a result of my settlement.Decide wisely. Pay it off. You can also try to negotiate the removal of the charge off upon final payment of the balance. Either way you don't want the company to continue to report to your credit report with a balance. The sooner you pay it off the sooner you have a chance of removing it off your credit report.
Wiki User
∙ 10y agoIf you have a negative bank balance for six months, the bank is likely to charge you fees and ask you to pay them what you owe. Once the account is back to zero, the bank will likely close that account.
No. A creditor can report a paid derogatory account as delinquent PRIOR to being paid. But if you paid it off, the correct status is "paid" (collection or charge off).
Bank overdrafts occur when one makes a purchase by check, credit, or other vehicle to access money in one's bank account, but there are not enough funds in the account to pay for the purchase or charge. If the bank chooses to pay the charge anyhow, an overdraft occurs, which typically results in a negative balance, and the bank charging a fee. Careful attention to one's balance and spending habits is the most prudent form of avoidance of overdrafts, however, sometimes banks will give the user an option to not pay overdrafts, meaning that the check or charge will be returned unpaid.
A vector exception is a charge that had to be manually inputed into an account. Whether it be an old check, posting charges over a hard hold on an account, or even check that had to be clear by fraud operations. A quick call to your bank should illuminate you on why a charge had to be manually entered into the account.
This is a scam to get your account information. They are part of checkconfirm.com and they debit your account for $.01. Once they realize your account is valid they will take it all. I suggest you go to your bank and fill out an affidavit for the charge.....close your account and open a new one. Once your account has been compromised you should not take a chance with them that it won't happen again!
Negative. (the electron)
Negative. (the electron)
When an object has too many electrons, it carries a negative charge. This is because electrons have a negative charge, so an excess of electrons on an object results in an overall negative charge.
Iodide ions have a negative charge of -1 due to the gain of an extra electron by an iodine atom. This charge results from the imbalance of protons (positive charge) and electrons (negative charge) in the ion.
Banks often have the right to deduct service charges from your account, even if it results in a negative balance. This is typically outlined in the terms and conditions you agreed to when you opened the account. It is important to keep track of your small forgotten accounts to avoid such charges. You should contact the bank to discuss the negative balance and see if any resolution can be reached.
An excess of electrons would produce a negative (-) charge since these particles are negative. If you imagine a scale with negative and positive weights, more negative weights would make the scales tip towards the negative end.
When a balloon is rubbed on your hair, electrons are transferred from your hair to the balloon, giving the balloon a negative charge and your hair a positive charge. This results in an overall negative net charge on the balloon.
Protons and electrons are particles that account for the charge of the mass. Protons have a positive charge, while electrons have a negative charge. The net charge of an object is determined by the balance of these two particles.
If an object has both positive and negative charges in different regions, it can still have an overall neutral charge if the total amount of positive charge is equal to the total amount of negative charge. This results in a cancellation of the charges, making the object neutral overall.
Oxygen becomes negatively charged when it gains two electrons, forming the oxygen ion (O2-). This extra electron results in an excess negative charge, giving the oxygen ion a negative overall charge.
Chlorine's charge would be negative because it gained an electron, which results in it having an extra negative charge.
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