I have an old credit card from Bank of America that was charged off years ago and recently fell off my credit report. Now, they’ve reached out offering to settle for half the original amount. Since it’s already off my report, should I take the deal? Pay the full amount? Or just ignore it?
I wouldn’t bother with it. Since it’s been over 7 years and it’s off your report, paying or settling won’t help your credit.
Arlo said:
I wouldn’t bother with it. Since it’s been over 7 years and it’s off your report, paying or settling won’t help your credit.
And if you make any payment, even a small one, the 7-year clock starts all over again.
Just because it’s off your credit report doesn’t mean the debt isn’t valid. Collectors can still try to get money from you, but here are a few things to think about:
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Statute of Limitations (SOL): Check if the SOL for collecting the debt has passed in your state. If it has, they can’t sue you for it, but they can still ask for payment. The SOL varies, usually between 3 to 10 years depending on where you live.
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Risk of Resetting the Debt: If you make any payment, even a small one, you might reset the SOL and make the debt collectible again.
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Credit Report Impact: Settling the debt won’t help your credit since it’s already off your report, but it might stop collection calls or potential lawsuits if the SOL hasn’t passed.
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Negotiate: If you do decide to settle, try to negotiate a lower amount and get it in writing that it’s “paid in full.”
It might be worth talking to a financial advisor or lawyer before deciding.
Since it’s off your credit report, the SOL has probably expired, meaning they can’t sue you. They’re likely trying to trick you into paying or resetting the clock. Even just asking about a payment plan could count as admitting the debt and restart the countdown, which could allow them to sue you again.
Also, make sure the people contacting you are legit. Some collection agencies buy old debts for pennies on the dollar and try to scare you into paying. Ignore their calls, texts, and voicemails. If they had any legal way to make you pay, they wouldn’t be asking for a settlement—they’d be suing you.
The SOL and the time the debt falls off your credit report are different things. Most states have an SOL of 3-6 years, though some go up to 10.
Do not respond to them. They’re hoping you’ll acknowledge the debt or make a small payment, which will reset the clock.
If it’s past the statute of limitations, don’t pay. Doing so restarts the clock.
There’s no benefit to paying it now. I’d just ignore it.
Absolutely not! They’re just trying to get some easy money.
When was the last payment? What do you gain by paying them now?
When you say ‘charged off,’ was the account officially closed?
Don’t acknowledge or agree to anything. Most likely, a collection agency bought the debt for next to nothing and wants you to reset the clock so they can go after you again.
How long ago was the last payment? What state are you in? The statute of limitations matters more than the charge-off date. A charge-off happens when you’re 180 days past due, but legally, it doesn’t change much.
Don’t respond, and block them. I used to buy old debt, and most of it is cheap because it’s past the statute of limitations. In some states, it’s not even legal for them to contact you.
Don’t worry about it since it’s already with a third party and off your report.
If it’s off your credit report and the SOL is up, there’s no need to pay it—unless you feel morally obligated.
Even if it’s off your report, when you apply for a mortgage, they might find it on a deeper check. You’ll just need to explain it if that happens.
Don’t accept anything without them proving the debt is valid. Be clear that you’re not acknowledging the debt. If they don’t respond with proof, then forget about it. Keep all correspondence and send everything certified with a return receipt.
If you can afford to, you should pay it. Ignoring it won’t make it go away completely. Settling for half seems like a fair deal.
You used the credit card, so you should pay the debt. Even if you’re not legally required to, it’s the right thing to do.