Working A Deal With A Collection Agency That Will Benefit You

If you call them up, offer a pay for delete and they tell you, “NO, we’re not going to agree to a pay for deletion deal.” Simply tell them thanks, and hang up. After that, get a “pay for delete” letter prepared for them, but add to it, if they decline this offer the next offer will be significantly less and won’t be offered for at least 2-6 months after this offer expires (30 days). If it happens to be a medical collection account, include a print out of the new proposed bill: H.R. 3421 or at least mention it in your agreement.

An example of how this once worked: There was a collection agency that refused to help someone out and wouldn’t agree to any sort of a pay for delete deal. Every 3 months as followed, a new letter was sent to this collection agency and each offer with it was 10-20% less than the original offer (original offer was full payment). It took about a year, but eventually, there was an offer from this collection agency: “Pay 1/2 of the total owed and we will delete this account from any/all bureaus reporting it.”

It didn’t happen over night, but if you remain persistent, they may very well give in to your demands.

Next step, if they refuse any pay for delete deals, you should dispute this debt through the credit reporting bureaus. This is something the collection agency should already see coming, but it’s something you should do in any case. The first part in this is disputing the info with the credit reporting bureaus and have the collection agency verify the debt. Verifying debt can be something as simple as the collection agency sending over “verification” to the reporting bureaus. It’s important to realize the reporting bureaus are only reporting what’s been reported to them as accurate. If the collection agency or any creditor reports something to the bureaus as accurate, then they’ll report it as such. Verification typically makes the collection agency double check the account numbers, date(s), amount owed, and other basic info. There’s not much work involved with verifying a debt, but the important thing is requesting verification. You never know, they may overlook the request, and if that’s the case, the negative account will have to be deleted. Please note: it’s unlikely that will be the case, but there are plenty of other options for you to consider below…

Requesting full validation of the debt is your next step or your next request. Debt validation becomes much more complicated for the collection agency. So what is requesting validation of debt?

The collection agency must prove they own the debt or they have been assigned the debt by the original creditor. In other words, they must be able to provide something that proves they legally have the right to collect or attempt to collect on this bad debt. Something like a contract between them and the original creditor would prove they have that right. Many collection agencies will not want to hand over contract agreements, so to avoid this option, they may send something like account statements from the original creditor. This would also be considered as proof they have the legal right to collect on this debt. If you truly feel they are not going to work with you, you might as well get down to requesting every possible request legally allowed by you. Depending on the type of debt, this would include for example: complete payment history (starting from the beginning with the original creditor), all interest and other additional fees added to the debt total (if applicable) by both the original creditor and the collection agency. In other words, request what payments you have made, what fees you have paid, what fees they are seeking, what interest rates were you charged (with both the original creditor and the collection agency ~ if applicable), and any other applicable questions you can relate to the history of that particular collection account. You can also request for the original contract between you and the original creditor. On a side note, depending on what the collection agency sends as proof they can collect this debt (account statements for example), this would satisfy the request for the original contract.

You may think this should be a easy for the collection agency to obtain and send to you as proof and/or validation, but in many cases collection agencies buy bad debt in large packages. Meaning, they’re not a collection department on behalf of the original creditor. One collection company/agency could have multiple bad debt accounts from multiple original creditors. Have them think they are going through all this trouble and you still will not pay unless they agree to a pay for delete deal. The more time and work they have to spend on an account, in which they feel you are not going to pay on, the more likely they may be to take the pay for delete deal while they can. There are some tough collection agencies ou there, and they may try yet another scare tactic by sending you a summons to appear in court. While you shouldn’t ignore this summons, you also shouldn’t worry too much about this it… There has been precedence set by the courts that filing suit before validating a debt within the 30 days, may not hold up in court… The case that set this precedence was Spears vs. Brennan No. 49A02-0003-CV-169, it had to do with this, as well as other violations under the FDCPA.

There are some collection agencies/agents that are just simply impossible to work with. They will push right up to the line on what’s legal and what’s not. In situations like that you can send them a “Cease and Desist” letter. Ultimately, if you send them a “cease and desist” letter, they are required by law to only communicate by mail. This is a great way to get the pesky ones off of your back and stop them from calling you. There are guidelines set however on what a collection agency can and can’t do, so you check out Collection Agency Info to find out more.

If you simply pay off or settle a collection account and not have it deleted in the process, this will do little, if anything, to improve your score, and in some cases it may actually hurt your score. If a collection account has been sitting in your credit report for 1-3+ years with no activity, it will have far less impact than a collection account with new activity. Paying off or settling on the account will bring new activity (new activity: “paid in full” or “settled”) to this otherwise dying off account. Just having new activity could very well hurt your credit score. Of course, as this account ages once again, it will have less and less of a negative impact. That’s why it is important to offer a “pay for delete.” Having a paid or settled collection will do little to improve your credit score, and it can actually do more damage.

The next step in credit repair: Improving Your Credit

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