Wells Fargo Unsecured Credit Card “almost” in Collections?
Ok… So I got a credit card in 2007 from Wells Fargo. It is unsecured and the amount was for a $6,000 limit.
My Husband and I purchased a 22′ long trailer and Xmas gifts that year. Financially, we hit hard times and I never paid a single payment on it. So, it went over limit up to like $7,000+. After we got back on our feet, I contacted the bank right before it went into collections and made an agreement for them to automtically draft $140.00 out of my account per month. At this rate, we now owe like $5,000 on the debt. The “credit card” aspect is gone, so it is just debt. We will have it paid off in like 3 years. It is showing up on my credit report as in collections.
They said that they will accept a lesser amount. Any Suggestions?
Please help. I know nothing about credit and what looks good/bad on credit reports, but I know that it being in collections is BAD. They said it’ll say “collections” until it is paid off completely- that’s 3 years. I know that after 7 years, if I paid nothing, I’d be $5,000 richer and it would disappear off my credit.
Due to the fact that we also have 2 personal loans, one for my car and the other for our (HUD) house that we took out in 2006 with Wells Fargo, I wonder if I call and offer them like 1/3 or even 1/4 of the debt, if they’d accept if I threatened that I’d file bankruptcy and they’d get nothing for all 3 loans. The other two were $10,000 and we still owe $7,000 and the other was a $15,000 and we owe like $11,000. The 2 were both 5 year notes.
Please help. I know it’s alot to take in. We are financially set now and I DO want to pay off debt, but I want to do it so that it makes my credit look better as well.
Thanks in advance 
I am not really going to file Bankruptcy. I was told that mentioning Bankruptcy increases your chances of them coming down on the amount they will accept.
I just called and they said I owed $7,055.97 and now it is down to $4,955.97. She said that if I pay it all office it will say Charge-off, paid in full, zero balance.
The settlement amount offered right now is $3,469.17 but I would have to pay the IRS unearned income tax on anything over $600.00.
Right now, the debt is simply debt. There is no interest being added AT ALL. So I am tempted to keep paying $140.00 per month. But, if there is a lesser and shorter way out. I am all Ears
ALSO,
If I do decide to settle, does the 7 years start from today or does it start from the date it was “charged off” which was 1 year ago?
pagodaboy2001 posted: 16 Sep at 2:59 pm
You are no where near bankruptcy. Since your personal loans are secured debt not much of threat. Besides you’ll end up paying fees and the hassel of going through it, isn’t worth the $5000. Better off paying it off.
Credit is debt the amount you use on your card is considered debt because you used the card meaning you would pay back later. I wouldn’t worry about your credit score, the score only tells you how much you like debt.
To pay it off earlier pay more into it. Change your lifestyle, your broke, spend less than you make (it helps to get on a budget and plan out what to with your money).
Pay the debt off, show some integrity. You borrowed the money pay it back.
coleblondehead posted: 16 Sep at 3:20 pm
I think even if you paid it off it wouldnt come off your credit report
right away, are you ready for the consequences if you dont pay
anybody.
Have to change your phone number/private line
Not have any credit available for 7-10 yrs.
either for house,loans,cars
Now some of your creditors have certain time to sue you, depending
on your state, check online. tx. has 4 yrs. SOL (statute of limitations)
if they did ever sue you then that creditor call them and offer them
30% of whatever you owe, they might take it, who knows.
Its a gamble, on the other hand they might not bother you at all.
My little bfrother when he came home from the Gulf war, went crazy
with credit cards and bought a new truck, I think he owed about
25k altogether, one year later returned truck, couldnt get a job
right away, nobody looked for him or sued him. So go figure.
Call them one last time and tell them that youre going thru bad times
and offer a low settlement see what they say, if they dont want to
you can threaten with bankrupty, but dont say it if you dont mean it.
You have to be firm with money and decisions that youre going to
make, bankruptcy is also on your credit report 7-10 years. So either
way Good luck!!!
Eli G posted: 16 Sep at 3:56 pm
I would strongly recommend against threatening the bank with bankruptcy, or at all, for that matter. You might ask them if they can provide one, larger personal loan to pay off the other two and your credit card. If that doesn’t work, you could give Prosper.com a try. You can get a loan there with almost no credit, you’ll just pay a higher rate, but it would still most likely be a better rate than the credit card debt.
Andrea posted: 16 Sep at 4:07 pm
Maybe you should try calling them and seeing if you can refinance the all the debt into one loan with them. You mention the 7 years how info drops off your report but you need to understand that it will be 7 years from the date of the last transaction. It seems many folks think the 7 years is from when the account was opened but that is incorrect.
I would try calling them about the refinance. If they don’t want to do it, perhaps you can look into local credit unions you may be able to join and they could help you. If the refi works out, just make sure you have it in writing before paying off the one in collections that the negative info will be removed from your credit report.
Good luck.
Craig T posted: 16 Sep at 4:59 pm
First question is do you have the funds available to pay whatever the settlement amount is in full? If not, then there is to negotiate
“Please help. I know nothing about credit and what looks good/bad on credit reports, but I know that it being in collections is BAD”
That will still be on your credit report and will be notated as “settled for less than full amount” which is just as bad if not worse
“I know that after 7 years, if I paid nothing, I’d be $5,000 richer and it would disappear off my credit”
Not likely, since Wells Fargo KNOWS you have resources to pay that would certainly take you to court and win a judgement then proceed to garnish your wages
“if they’d accept if I threatened that I’d file bankruptcy and they’d get nothing for all 3 loans”
Again a faulty assumption, based on your statement “We are financially set now” you would be a Chapter 13 and would be paying all your creditors might be less but you would be paying and your credit would be MUCH worse
“now it is down to $4,955.97. She said that if I pay it all office it will say Charge-off, paid in full, zero balance.
The settlement amount offered right now is $3,469.17 but I would have to pay the IRS unearned income tax on anything over $600.00.”
You would get a 1099-C for the difference between the amount owed and the amount paid ($1486.80) assuming a 25% tax rate the additional tax would be about $371, so you are still saving over $1,000
Finance for life posted: 16 Sep at 5:13 pm
Well, first of all, do you have the money to pay of the loan at the settlement amount? If you can i suggest you do. You will pay taxes on the settlement amount, but looking at the big picture you will save money. Most all creditors, including secured and unsecured loans will allow settlements to be made. I would only suggest something like this is done when there has already been a CHARGE-OFF. and in your case there already has been one. Once you settle on this account it will say on your CBR (credit report) “settled for less then amount owed” but at least there will no longer be a CHARGE-OFF and the 7 year period will begin to get this off your credit. OH, and most companies will only gfive you 30-45 daqys to pay off the settlement amount in full or they can cancel the deal.. dont forget to get the settlement in writing… Hope this helps!