Settle Charge off account

[wdsman1]

I am in a bind. My wife and I are trying to purchase a home. We were recently married and most of our savings went to pay for the wedding.

I have a Chase account with a charged off balance of $4800. I do not have anywhere near enough to offer a Pay for Delete.

If I offer to settle the account what is the best way to go about it? Phone, letter?

Will this lower my score? It will fall off in 2 years. I am out of the SOL to be sued but it is still reported as an unpaid charge off.

I have disputed this account numerous times, sent 623 investigation letters which have not worked. Chase has provided me with quite a bit information. Other than the Chase account I have late payments on a paid in full student loan 2 1/2 years ago. I have 2 open CC's with 20% utilization and a joint car payment.

We were going to try and just use my wife to obtain the mortgage but just her income is not enough.

Please help....really looking for the best idea with Chase. Would it help if they listed it "paid in full", and would that even help. Thanks in advance for the help. A

[Lian]

Since you are planning to apply for a mortgage loan, the lender may require settlement of the debt as a pre-condition for mortgage approval, regardless of your FICO score. If you are in a community property state, the mortgage lender will most likely put as much scrutiny on your CR as your wife's, regardless of whether you are a signatory to the loan. So I would anticipate that settlement of this debt wont be an option in the mortgage approval process.

Settlement of the debt, in full or in part, wont improve your FICO score since it wont result in CR deletion of the reported CO. So, my first question is whether your FICO score, with continued inclusion of the CO in your CR, will be sufficient to meet their FICO scoring qualifications. Assuming it is, then you may still have to settle the debt.

Considerations in settling the debt will first require you to know who currently owns the debt. Many times, an OC will sell the debt to a debt collector after charging off the debt. You can only offer payment to the owner of the debt. Does the OC still own the debt? Are they still reporting an unpaid balance under their account in your CR? Has a debt collector contacted you, or reported to your CR?

Once determining who you can offer payment to, then it is a matter of contacting them and reaching a settlement agreement for less than the full amount. Expiration of SOL makes that a bit more promising. You may or may not have the option of a debt settlement payment plan, depending upon whether the mortgage lender stipulates settlement must be obtained prior to mortgage approval. You probably wont know that until you apply for the mortgage. You might want to do some informal investigation before applying, and try to determine what the requirements are from your prospective mortgage lender. That will, in my opinion, most likely govern what you will need to do in the way of settlement. Until then, it is hard to determine what settlement path you must take.

[wdsman1]

Thank you for taking the time to respond. We gave the loan officer at the bank the our info including the unpaid charge off. The loan officer did not seem concerned that the charge off was unpaid. I think after the holiday next week we will officially apply. With my wifes score in the mid 700's and mine today Transunion 670, Equifax 642 both FICO and FAKO Experian of 657. I hope we are good to go. Also my student loan is now completely paid off which has not been updated yet to show paid in full. Thanks again.