you can normally make a deal with them and and not have to pay the full amount. If they have written it off as a loss. But best thing to do is get them to put in writing that they will report it as a paid debit so it reports as good credit if you pay it off. The other thing is they can keep reissuing a claim on your debit for ever if they want to so it can stay in your history much longer than 7 years.
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