charge off balance 3 times the limit?

[payinbills]

What is the name of your state? Florida

As my wife and I prepare to attempt to buy a home, we have addressed all of our credit issues, paying off everyone we have ever owed money via credit report.

My wife had a credit card back in '99 that has since been charged off.

Here's the gist of the credit entry.

Chase N.A.
Opened: 6/1999
Balace date: 8/2002
Balance $: 2,155
High/limit: Equifax - $1488, Ex - $1120, Trans - $2155
Status: collection
Comments: Charge off, Purchased by another lender

We got in touch with them to arrange paying off, and they state we have to pay $3,398.85 to satisfy. They state she had an original credit limit of $1,120. From what I understand, the balance climbed and climed as she neglected to pay.

Someone told me that they cannot insist we pay that much. I have sent the first of 3 payments ($1132.95) via mail. Is there some other way we should handle this, other than just paying what they say we owe? Should I cancel this check before they cash. Are we being ripped off.

Appreciate any advice you can offer.

Thanks
Payinbills!

[Ladynred]

They have every right to attempt to collect the full amount, including acrrued interest. However, that doesn't mean you have to pay their extortionistic price. Junk Debt buyers pay pennies on the dollar for old debts, the older they get, the lower the amount they buy the debts for, down to fractions of a penny on the dollar. So, they got the debt at a bargain-basement price, then turn around and demand payment of the full amount == a HUGE profit for them.

That does not mean you can't negotiate for a settlement of a lesser amount, but you need to do that IN WRITING. You are at a disadvantage though, they know you are willing to pay to get your mortgage, so they may give you a hard time about settling. If they DO settle, make sure you get a confirmation letter from then stating the matter is settled and they considered it paid and closed.