What If Late Fees Put Me Over the Limit?

 

I’ve since hired an attorney to negotiate a $150-a-month repayment plan, but I want the company to subtract all the fees it charged. Can my debt be reduced by that amount without the company reporting it as a settlement to the credit bureaus?

 

A: You can always try. Sometimes creditors and collection agencies are willing to report debts as “paid as agreed” or “paid in full,” which is typically better for your credit score than having a debt reported as “settled.” To get the most negotiating leverage, you’ll probably need to offer a substantial lump-sum amount rather than a continuing payment plan.

 

The difference in your score may be hard to notice, though, because you’ve done such a thorough job of trashing your credit. You may not have liked the company’s policy on fees, but its practice of letting late fees trigger over-limit fees is pretty standard and was almost certainly disclosed to you in the fine print of the agreement you signed to get the card or in a follow-up disclosure included with your statement.

 

Your stubbornness about paying your bill turned what could have been a private matter between you and your credit card company over a $29 fee into a more public dispute. Once you’re more than 30 days overdue on a bill, lenders typically report your delinquency to the credit bureaus.

 

If you let this nonsense go on so long that the original account was charged off and turned over to a collection agency, then your credit may take years to recover.