Is it possible to entirely remove a charged-off debt?

July 6, 2007 7:44 PM

What is the best method to resolve this debt? Is it possible to have it removed from my credit history entirely?

About four years ago, I moved from California back to Vermont. I had a cell phone in California through Sprint PCS. When I moved back, I stopped using my cell phone and also stopped paying the cell phone bill.

This racked up about $150 in unpaid bills, at which point they terminated my contract and assessed an additional $150 in termination fee. My total debt to Sprint PCS: $309.82.

At the time, I wasn't able to pay the debt and so I ignored it and eventually they stopped trying to collect and sold the debt to a debt collection agency named NCO Financial Systems.

NCO offered me several enticing settlements, around 50% of the total debt. I ignored these offers as well and left them in the dark as to whether I would be ever be paying this debt.

Eventually they stopped bothering me and several years passed.

Around a year ago, the company I work for began selling Sprint PCS phones as a Sprint Authorized Reseller. Employee contracts were offered a greatly reduced monthly cost.

I was interested and we asked Sprint if I would qualify. They checked and reported that I owed money to Sprint and would need to settle this debt in order to open a new contract.

So I left it at that for the time being.

A few months later I received a letter in the mail from NCO again requesting payment of the debt.

I was concerned about my credit history, so I got a free report through Equifax which showed that NCO had just recently reported the debt on my credit history. I was surprised that there was nothing on there from years ago and the only report was this recent one.

I continued to ignore the situation. (sigh)

Now today I received two letters in the mail from Genesis Financial Solutions, Inc. (GFS). They are offering me a pre-approved credit card onto which the balance of my debt will be applied with 0% APR and once they receive the first payment the charged-off account will be considered paid in full.

They label my debt as: "charged-off SPRINT PCS account, owned by NCO Financial Systems"



What is the best way to settle this debt in terms of my credit report? I am prepared to pay the debt in full at this time, if that is the way to go.

It doesn't seem like a "settled charge-off" is very good, nor does a "paid charge-off" even seem very good. Obviously, I would prefer to have the whole thing removed completely. Is that even possible at this point? Would it be possible to contact Sprint, who seems to have information on the debt still, and have them remove it completely from my history?? Or would NCO be able to do this??

What is the best approach here? I am clueless on this.

posted by doomtop to work & money (17 comments total)

I've said it many times & I'll say it again: Simply click the websites of the 3 credit report companies and contest the charges. Within 30 days or less they will be removed. That is all it takes.
posted by growabrain at 8:01 PM on July 6, 2007

growabrain's advice only works some of the time.

You should visit creditboards.com for advice on this. Sometimes if you offer to pay the debt to the collection agency, you can negotiate to have the record removed. Get your reports from Experian and TransUnion too since the debts might be there too. And Sprint could have reported the charge off before they sold the debt.

If you do pay it off, and NCO tells Sprint you've settled the debt, Sprint still will probably want to get a fat deposit from you if they want to do postpaid business with you again.
posted by birdherder at 8:06 PM on July 6, 2007

I am not hugely interested in continuing to do business with Sprint. I will if it makes sense, but I am mainly concerned with removing this blemish on my credit history. Entirely, if possible.

I will try disputing the charges and see how it goes. I'll let you know, growabrain.
posted by doomtop at 8:29 PM on July 6, 2007

Pull your report and look at the item. Does it contain any factual errors or omissions? If it does, regardless of how minor they are, you can probably successfully challenge it.

Once Sprint has you in write off status, you can't deal with them to settle the debt as they no longer own it. You have to deal with the agency. And probably they will never let you open an account with them again, and if they do you will have to pay a ginormous deposit. I once sold Sprint phones in a store near a low-income area and had to deal with this situation all the time.
posted by jtfowl0 at 8:38 PM on July 6, 2007

growabrain, would I want to dispute the charges as fraudulent or that it doesn't belong to me, or what?

jtfowl0, Sprint said I would have to pay them the debt and then could open new account. I assume this means there is possibility of settling with them directly, as they didn't indicated I would have to settle with credit agency, or anything to that effect.
posted by doomtop at 8:42 PM on July 6, 2007

I think the google phrase you're looking for is "pay for delete site:creditboards.com/forums." Here's the sample letter forum where a keyword search should help. Another option is to write to NCO asking them to "validate" the debt. In other words, you never did business with them, so why do you owe them anything? If they can't provide all the documentation you ask for, you can eventually get it removed via Experian & co. A third creditboards term to search is the "1-2 punch."* That place is crazy -- I only read those forums for like 3 days after it was mentioned on Mefi, and somehow I absorbed all this terminology.
posted by salvia at 8:48 PM on July 6, 2007

Most of the many people I know who fixed their credit reports by simply contesting everything, fixed most of all their negative items, whether they were true or not.
In the old days, you had to write letters explaining each situation, and some of the credit bureaus may have gone back to verify the information.
Now, when you go to the companies websites, there're only tiny menus with half a dozen pre-set "excuses" on the page where you contest: ex-wife's bill / not mine / wrong info, etc. And all it takes is pick any item. Even if they do not correct the information the first time, you may try again after 30 days, and in most cases, they will do it then.
I am not condoning lying to some giant information/mis-information-gathering entity, but it boggles the mind that many people wait passively 7 and 10 years for derogatory items to "fall off" their report, while their financial lives are put on hold.
The mandate that congress gave the credit bureaus when they established them, was to report gathered information, and to correct it if contested, that was all. So do with it as you please.
posted by growabrain at 9:13 PM on July 6, 2007

doomtop, definitely don't lie. Just make truthful requests for information that these companies must legally provide. Then when/if they can't, you start asking for deletions. So, instead of saying "this is inaccurate," say "please provide proof that this is accurate or else please delete it." You are just exercising your legal rights to receive proof that the debt is yours, and by making detailed requests, you're hoping that eventually someone either misses a deadline or decides it's easier to just give you what you want. (I'm cribbing from this.) (I've never been on the website form that growabrain is describing so I'm not sure how to translate this to their check boxes, but you can always send them a letter).

The other key thing to know is that there are multiple actors (Sprint, NCO, Experian), and different laws tell each of those actors what they have to do. So, you can exercise your legal rights on any of those levels. These laws, etc, are all explained in the transcripts of that that seminar, so I encourage you to go read them.
posted by salvia at 9:51 PM on July 6, 2007

Listen to the people pimping creditboards.

Never, I repeat never just pay a debt collector without an agreement in writing that they will remove any and all reporting that they are doing related to the account from your report.

Also, the validation thing is a great way to deal with it without actually paying anybody.

Personally, I feel like I should pay my debts, so I've in the past dealt with the original creditor. I have never paid a collection agency, as I think they are the scum of the earth. (Probably because they used to call me so much, even after I told them not to..that was before I knew I should keep track of their violations and make some money off of them)
posted by wierdo at 7:09 AM on July 7, 2007

Obviously, I would prefer to have the whole thing removed completely. Is that even possible at this point? Would it be possible to contact Sprint, who seems to have information on the debt still, and have them remove it completely from my history??

I'm sorry, I must be missing something. You breached a contract. You haven't actually paid the debt, right? Why would Sprint have any incentive to do this? For that matter, why would any of the collecting agencies? Many of the responses here advocating that you dispute these (legitimate) charges seem a lot like fraud to me.
posted by mkultra at 8:07 AM on July 7, 2007

mkultra, no one is suggesting he defraud anyone, certainly not me. You can say he should pay the debt, and that's fine, but Sprint has probably already sold the debt to NCO for pennies on the dollar and then gotten a tax writeoff for their loss. But that's a different issue than what is reported. There is no law that says Sprint or anyone has to pass around gossip about your payment history with them. The credit laws exist to make sure this gossip isn't way off base, so what's "fraudulous" about saying "hey, show me your proof that it's not off base?" And if they're too lazy or disorganized to do that in a timely manner, how does it hurt anyone if they'd rather just take it off the report? Sounds like he pays his bills now.
posted by salvia at 9:16 AM on July 7, 2007

OK, fraud is probably too strong a word, but here's the way I see it:

- You, doomtop, signed a contract. You broke the contract. Because of that, you owed Sprint money.

- Sprint sold your debt to a collection agency (How is this "gossip", btw? It was all probably quite well documented). You repeatedly ignore several attempts to settle.

- Your attempt to get another phone from Sprint is what tickled NCO. Since it's still an open case, they updated your credit history accordingly.

Look, all of this seems on the up-and-up to me. You owe money. Asking NCO for documentation of the charges is fine and expected, but the ones here advocating a path of trying to game the process is just wrongheaded.

You want it off your record? Pay the debt. Then ask NCO to remove it. It will likely take a bit of patience and determination on your part, but, well, you put yourself in this situation, dude. This is what happens.
posted by mkultra at 10:10 AM on July 7, 2007

Don't do what mkultra says. If you feel the need to give scum money, at least get an agreement in writing that they'll remove their reporting before you pay them.

Regardless of all that, if they can't document, they must remove the item from your credit report. That doesn't mean you can't pay them if you want to, it just means that they have to remove it. mkultra is way off base here.

Actually owing a debt and what is on your credit report are two entirely different and only somewhat related things.

On a ChatFiltery note, I don't understand why it is that some people never graduate past a 10 year old level of understanding of morality, and insist you should just take your lumps, when in all probability the OP didn't set out to con SPCS out of anything, but instead got into that situation through unfortunate circumstance.

As I said earlier, if you do want to pay off the debt, that's excellent, but you should try to get Sprint to recall the debt from NCO and pay Sprint, since they're the ones to whom you really owe the money. NCO is a bunch of scum.
posted by wierdo at 10:41 AM on July 7, 2007

If you feel the need to give scum money

Say what you want about the business model of debt collection agencies, but let's not forget the original issue- the poster dodget a debt. This isn't some kind of shakedown.

I don't understand why it is that some people never graduate past a 10 year old level of understanding of morality, and insist you should just take your lumps, when in all probability the OP didn't set out to con SPCS out of anything, but instead got into that situation through unfortunate circumstance.

I'm not suggesting that the OP is conning anyone. But your characterization of what happened as "unfortunate circumstance" is inherently at odds with:

NCO offered me several enticing settlements, around 50% of the total debt. I ignored these offers as well and left them in the dark as to whether I would be ever be paying this debt.

...

I continued to ignore the situation.

wierdo, you're reacting as if some grave injustice has been committed against doomtop, that he should really Stick It To The Man, and that he's entitled to essentially get away with not paying his debt.

I reiterate my earlier suggestion: Go through NCO (Sprint will just refer you back to them). Get documentation, but expect to have to pay this off. It's possible you can negotiate removal with them but again, it's going to cost you.
posted by mkultra at 11:01 AM on July 7, 2007

I have dealt with NCO financial before - they actually shoot straight. You have to pay, then they'll report the account as paid or settled. They will not remove it, because it is a legitimate default of a credit agreement.

They will not change the status ahead of time, either. Don't be naive - they're the ones holding the cards here and you ignore them at your peril.

The Sprint Charge Off will remain. Why? Because they charged it off. They've no reason not to "un-report it."

The rules were set in place before the account was opened. Both parties knew it. Both signed.
posted by TeamBilly at 12:21 PM on July 7, 2007

- Sprint sold your debt to a collection agency (How is this "gossip", btw? It was all probably quite well documented).

Since this doesn't seem the place for debating the morality of it all, and in the interest of mitigating the derail, I won't go into it. It's largely in the transcript I linked. If someone does want to debate it, feel free to email me or set up some MeTa thread. Suffice to say, and without commenting one way or another on the current situation, I think people can try to get negative marks off their credit while still being moral people who do keep their word.
posted by salvia at 8:48 PM on July 7, 2007

mkultra, while I appreciate your opinion of the situation, I was not really looking for advice on how I should handle the situation in general but more specifically advice on the most efficient way to get my credit report clean.

I am happy to pay the debt, but I am not willing to do so if that doesn't change the way my credit looks in any way. I have let it go on so long I have no incentive to pay it at all if it doesn't heal my credit, outside of a personal obligation.

I will pay my debt, to the company that I owe it, Sprint PCS. I have done no business with NCO Financial and I don't feel like I owe them anything.



growabrain (and others), thanks for the advice! I disputed the reported charge-off online and it was removed within five days!!

Now I should just need to clear my debt with Sprint and I can get a contract with them again. I can also move forward with the house I am trying to build for my family, which is why I am trying to clear up any debts, etc. that I currently have.
posted by doomtop at 7:10 AM on July 12, 2007