Followup to an earlier question. I was unemployed for a while, and let one of my credit cards go unpaid too long. It went to collections... I think? Now I may be able to settle for about 40% of the debt, but should I? How do I decide? I asked the previous question in May: credit card with about $21K balance, Citibank closed the account and referred it to an outfit called Client Services. In June, Client Services offered to settle the debt for a lump sum of about $8500, but I didn't have any money, so I didn't accept the settlement. BUT - after a few months pause, Citibank has resumed sending monthly bills as if nothing had happened. So it doesn't seem like Citi has actually written the debt off yet.
If I paid the minimum payment of $5500 to Citi (that's about $500 as monthly minimum and $5000 in fees and delinquent monthly minimums), I'd be back on the old track, paying a minimum $500 a month for a decade or two until it's paid off.
Now I have a job again. I could probably afford to pay the Citi minimum of $5500 now and pay off the rest in installments. Or, if I borrowed some money from other sources or waited a few months, I might be able to pay Client Services' settlement offer - if it's still open.
Assuming I could still get a settlement, let's say $10K or less, which is better for my credit rating: pay the settlement and get a $10K writeoff on my record (and have to pay taxes on that), or get back on the $20K grind, pay it all slowly, and get my account back in relatively good standing? I have no plans to apply for new credit, loans, mortgages, or car leases in the next few years, but I might have to rent a new apartment, so I may need a good score.
Paying the settlement would be a greater hardship right now (larger lump sum plus tax implications) but if it's not any worse for my credit, it might be worth it. If Citi had already written off the debt, then the credit blemish would already be there, but that doesn't seem to be the case.
Data: my current credit score is 520 (weirdly, it was more like 480 last week). It was around 680 a year ago (high credit utilization but no delinquencies) when I started having financial troubles.
My credit report as of yesterday shows this status for the Citibank card:
Last payment made: 12/2017
Pay status: Account 120 Days Past Due Date
Terms: $2500 per month; paid monthly
Date closed: 05/2018
Maximum delinquency of 120 days in 06/2018 for $2500 and in 07/2018 for $3000
Credit limit of $19,400 from 01/2016 to 07/2018
Estimated month and year that this item will be removed: 01/2025
The last 5 months are rated 120 120 90 60 30, and then OK for all previous months.
All my other accounts on the credit report are solid OK, except for a second credit card with about $16K balance that is OK 60 30 OK OK .....
If my landlord has reported me for being late on rent, it hasn't shown up on my credit report. I never let anything else get significantly late.
If I paid the minimum payment of $5500 to Citi (that's about $500 as monthly minimum and $5000 in fees and delinquent monthly minimums), I'd be back on the old track, paying a minimum $500 a month for a decade or two until it's paid off.
Now I have a job again. I could probably afford to pay the Citi minimum of $5500 now and pay off the rest in installments. Or, if I borrowed some money from other sources or waited a few months, I might be able to pay Client Services' settlement offer - if it's still open.
Assuming I could still get a settlement, let's say $10K or less, which is better for my credit rating: pay the settlement and get a $10K writeoff on my record (and have to pay taxes on that), or get back on the $20K grind, pay it all slowly, and get my account back in relatively good standing? I have no plans to apply for new credit, loans, mortgages, or car leases in the next few years, but I might have to rent a new apartment, so I may need a good score.
Paying the settlement would be a greater hardship right now (larger lump sum plus tax implications) but if it's not any worse for my credit, it might be worth it. If Citi had already written off the debt, then the credit blemish would already be there, but that doesn't seem to be the case.
Data: my current credit score is 520 (weirdly, it was more like 480 last week). It was around 680 a year ago (high credit utilization but no delinquencies) when I started having financial troubles.
My credit report as of yesterday shows this status for the Citibank card:
Last payment made: 12/2017
Pay status: Account 120 Days Past Due Date
Terms: $2500 per month; paid monthly
Date closed: 05/2018
Maximum delinquency of 120 days in 06/2018 for $2500 and in 07/2018 for $3000
Credit limit of $19,400 from 01/2016 to 07/2018
Estimated month and year that this item will be removed: 01/2025
The last 5 months are rated 120 120 90 60 30, and then OK for all previous months.
All my other accounts on the credit report are solid OK, except for a second credit card with about $16K balance that is OK 60 30 OK OK .....
If my landlord has reported me for being late on rent, it hasn't shown up on my credit report. I never let anything else get significantly late.