Help with very old credit card defaulter.

[Umang85]

A friend of mine has a HSBC CC default from 2009. Amount due since then is 40k. And his cibil has tanked because of this. The bank is okay with settling it at 20k.
Will this impact the cibil more?
They are finally looking to settle this and work on improving their CIBIL.

Please post your suggestions on paying the settlement amount or the full amount.
What would be the impact on CIBIL in both scenarios?

 

[akshayhs]

He is already late. He is aready classified as a defaulter by now and the bank offers to settle. A settled remark against a credit account is also a negative sign for new lenders. Either way its a messy situation.

 

[Umang85]

He is already late. He is aready classified as a defaulter by now and the bank offers to settle. A settled remark against a credit account is also a negative sign for new lenders. Either way its a messy situation.

Yeah. That's the reason I am asking for opinions. Settled vs cleared payment. Which would be better? And how much of a impact would it be. He was looking for a mudra loan and that's when he found out about this entire situation. As far as he remembers the cc should have been cleared.

 

[Umang85]

Would really appreciate help with this.

 

[keerthirahul123]

Settlement is bad. It's better if he pays in full. Check with bank what will they update in cibil for this payment. Is it settled or pwo or closed etc.

 

[VasukiVasuki is verified member.]

A friend of mine has a HSBC CC default from 2009. Amount due since then is 40k. And his cibil has tanked because of this. The bank is okay with settling it at 20k.
Will this impact the cibil more?
They are finally looking to settle this and work on improving their CIBIL.

Please post your suggestions on paying the settlement amount or the full amount.
What would be the impact on CIBIL in both scenarios?

Don't settle
Pay full if your friend is in situation to pay

Also negotiate on payment of orginal default amount without intrest rate

This way
On cibil there won't be tag of
Defaulter
Not even settlement


Just a longgg longgg late payment


Then get each and every bank secured credit card .
Just for improving % of on time payment

 

[VasukiVasuki is verified member.]

Would really appreciate help with this.

Remove the thread mark..

You should thread mark information not question 😁

 

[Umang85]

Was

Remove the thread mark..

You should thread mark information not question 😁

Was just trying to see how it works 😊

 

[Cosmicgaze]

Don’t settle, 40k is a small amount technically. Can ask them to waive some interest. If not just pay whatever is due. Get noc and in writing that they will change the cibil to closed from default or settle or loss.
Sometimes they may ask for some cibil masking fees.
If it has been due from so many years his score would be absolutely trashed.
Will take a long long while to restore trust. So fd cards would be best choice.

 

[snike1792]

Settlement stays in the credit report for 7 years. There will be difficulties on getting a loan as the bank will ask the reason and will most probably deny you the loan. I would advise you not to settle. As others have suggested, if you are in a position to pay in full that would he better. The late payment remark on your credit report stays for 3/4 years, I believe. Slowly and steadily you could increase your score as well.

 

[Cosmicgaze]

Also I remembered one thing, when I had defaulted my card it was just 3+ months the dues had to be paid via net banking of card payment. The agent from bank handling it told me, that the default was still with bank so any payments have to be made to the card account either by way of minimum part or full payments and once dues cleared bank will automatically close card and it will list as such. My card got closed but still they keep reporting on time payment till this day.
He did say that after a period bank sells the default to a recovery agent so I guess your friends default is sold to a recovery agent who is agreeing for a settlement if they payment is to them directly then maybe it will not get marked close but speak to them and get in writing.
Check cibil what it is marked as either a loss or something else.
If it’s in recovery agency then you would need to make fully sure the cibil remark will be removed as most times it won’t. Then you can decide settle or full.

 

[Umang85]

Also I remembered one thing, when I had defaulted my card it was just 3+ months the dues had to be paid via net banking of card payment. The agent from bank handling it told me, that the default was still with bank so any payments have to be made to the card account either by way of minimum part or full payments and once dues cleared bank will automatically close card and it will list as such. My card got closed but still they keep reporting on time payment till this day.
He did say that after a period bank sells the default to a recovery agent so I guess your friends default is sold to a recovery agent who is agreeing for a settlement if they payment is to them directly then maybe it will not get marked close but speak to them and get in writing.
Check cibil what it is marked as either a loss or something else.
If it’s in recovery agency then you would need to make fully sure the cibil remark will be removed as most times it won’t. Then you can decide settle or full.

Will keep this in mind. Will be speaking to him today about the same.

 

[Umang85]

Settlement stays in the credit report for 7 years. There will be difficulties on getting a loan as the bank will ask the reason and will most probably deny you the loan. I would advise you not to settle. As others have suggested, if you are in a position to pay in full that would he better. The late payment remark on your credit report stays for 3/4 years, I believe. Slowly and steadily you could increase your score as well.

Will ask them not to make settlement. But they are in touch with someone from HSBC, the bank that is reporting it to CIBIL. So will ask them to get it in writing about everything

 

[Umang85]

Don’t settle, 40k is a small amount technically. Can ask them to waive some interest. If not just pay whatever is due. Get noc and in writing that they will change the cibil to closed from default or settle or loss.
Sometimes they may ask for some cibil masking fees.
If it has been due from so many years his score would be absolutely trashed.
Will take a long long while to restore trust. So fd cards would be best choice.

Agreed with this.