How to Settle a Four Year Old Car Repo Debt

A repossession is damaging to your credit rating. If you want to settle your debt, you can do so, although the repossession may still stay on your credit report for up to seven years. Unless the debt is paid in full, your credit report will be updated with a note that you settled your account for less than the amount owed. However, settling your debt prevents you from being sued by your original lender, and depending on the amount you owe, it may be beneficial to work out a settlement.

Instructions

1

Call your original lender. You can find the phone number online or in your old banking paperwork. Banks usually sell aged repossession debts to an outside collection company, so if you have been contacted by a different company for settlement, call the collection company instead. If you call the original bank to offer a settlement, a representative may be able to help you directly or provide you with the correct contact information for your collection company.

2

Let either the bank's collection department or outside collection company know that you want to settle your debt. Provide your Social Security Number and other identifying information, if necessary. The representative will let you know what amount is due.

3

Write down the amount due. If you need time to decide if you can pay the debt or if you will need to make payments, get off the phone and call back as soon as you come to a decision. Collection companies can be pushy. You may be offered an array of payment plans. Make sure you think your options through before agreeing or providing your card or checking account information.

4

Ask the representative how you will receive the receipt of your payment before you settle. Before paying, ask if you can have an email or letter sent stating that you owe the stated amount due and if paid, your debt will be paid in full. This may be a long shot, but it will help your credit rating. You can also try to negotiate the repossession off of your credit report entirely if you pay the total amount due.

5

Wait for your letter or email of credit report update confirmation, if one was made, before paying if you can work out a deal. You can use the letter and receipt for payment as proof that the amount is paid in full to send to the credit bureaus for proper updating of your credit report.

6

Settle your debt. Pay the amount agreed upon and ask for a receipt to be mailed to you.