I made a move to another state for a new job in early 2007. By the end of summer in 2008 I was laid off from my job. I received unemployment pay but I was out of work for more than a year and a half.
At the time I was laid off I had some credit card debt. My unemployment pay was so far below what I had been earning that I had no choice but not to pay on the credit cards.
Fast forward to the beginning of 2010. I had found a full time job and made calls to each of the credit card companies that I had debts with (there was 4 in total). Two of the cards I was able to pay them off at that time, one card agreed to taking a monthly payment for 3 years, however the last one (already in collections) was not willing to work with me on making monthly payments.
They wanted the balance paid off in less then a years time (it had a balance of over $8,000) and they wanted almost half of the balance paid up front. I could not afford too.
Another year or so went past when I started getting calls from the new collections company (the debt had been sold to a new collection company). I was able to work with them to have the agreed upon debt paid off in a year.
I am now able to buy my first home. The problem that I am having is the debt (although it shows a zero balance) is showing up when the bank pulls my information. My lender is wanting a letter from the collection company stating that this debt has been satisfied.
I have called the company multiple times but they have not/will not send me a letter stating that the debt is satisfied.
Is there anything else I can do to make them send me the letter or do I just hold off on buying a property until this falls off my credit report?
It seems like there are several things you could do but ultimately the best thing to do is whatever satisfies the lender.
You could get a copy of your consolidated credit report which shows all of the major credit bureaus on it. Not all credit bureaus report all debts so once you figure out who is reporting the old account, you could follow the dispute policy of the credit bureau reporting the old debt and hope they then remove the account.
You could ask the lender to write to the company and judge for themselves what the lack of a response means,
You could provide some sort of proof you paid the debt. This could be cancelled checks or a statement showing it being paid off.
It is also possible the debt is no longer with that company that reported the debt and they might have been a third-party collector. In that case they would not be able to send you a letter. You might want to look on your credit report to see if there was another entity that might have actually been the debt owner and ask them for a letter.
Ultimately this just comes down to a loan underwriting policy and procedure. So what if you asked your lender if you could talk to the person handling your file and brainstorm if any of these ideas would work for them.
Please post your responses and follow-up messages to me on this in the comments section below.