Many people are really worried when an account goes in to collections, meaning a credit card company has decided to charge off your debt due to non-payment. Sure, now you have two big negative marks on your credit report, but I’m going to make a statement now that may seem counter-intuitive: once something gets to collections, you are pretty much home free!
Much of my reason for making this crazy statement comes from the fact that your protections under the law are dramatically increased when an account goes into collections. Let’s see how.
- It’s pretty hard for the collection agency to build up a good case against you in court if they decide to sue. Read more.
- If they are reporting on your credit report, it’s generally easy to get this off using the debt validation or so-called “623″ method of requesting an investigation from the information furnisher. These two methods are effective because collection agencies do not have documentation adequate enough to support them if you challenged them in court. When a credit card company sells off bad debts, they place them in million dollar packages of debt to be sold on the market to junk debt buyers. No documentation regarding the original debt goes along with this debt when a junk debt buyer purchases the paper.
- It’s very easy to get them to settle for 10-25% on the dollar and also remove the item from your credit report. Our readers do this all the time, it’s called pay for delete in the credit world.
- It’s easy to tell them to just “go away” via your rights in the Fair Debt Collection Practices Act (FDCPA). Under the FDCPA, you can send them a written note telling them you wish no further contact with them and they MUST comply or they are violating the law. This way you call essentially call off the dogs forever.
So while being in collections is not necessarily a good thing, there really is no need to panic. Remain calm and read the information on this site and you will be ok. As a parting tip: here’s another good article on ways of dealing with collection agencies.
Does anyone have any other good tips? Leave a comment!
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Kristy,
I never received any letters from a “lawyer” collector (I have never received letters from collection agencies that were sent by registered mail or return receipt) until I was served in July with a lawsuit. Since then I have answered them (and the court) on two separate occasions. The 1st complaint, I requested a validation of debt and proof of balance. They responded with a 1st request for documents and interrogatories. I answered again that I need a validation of debt and proof of charges since we had not received a statement in months and had no documents in regards to this $5,000 credit card. I just got a letter in the mail from them asking me to call them to “settle the account amicably”.
We have NO money to settle a dime. Should I keep fencing with them on the validation of debt
line? I just cant believe that they are going to spend the money to do a “motion to compel” on such a small account.
Thanks.
Hello. I followed your debt valadation advice and mailed a letter to the law firm that sent me a letter requesting full payment for an outstanding amount for a credit card. The law firm sent me a fax copy of the last statement of the credit card and a copy of the computer generated original application for the credit card. They did not send me a copy of a contract between the law firm and the credit card company assigning them the debt. Do I write another letter requesting validation of the contract? If so, am I still entitled 30 days to investigate?
Thanks
Debra
ive had an office contact me that i think are lawyers concerning chase credit card account i havent been able to pay on.when they called i told them i could pay 50.00 month till i could pay more and they wouldnt even consider it.At this time thats all i can pay but their wanting to know when i do my taxes and when my husband gets paid and copies of his pay checks to determine what we have to pay.Can they do this?they threatning to put leins on assets seize my bank accounts and garnish wages.What should we do?
I received a letter from an attorney in NC saying he had been retained by citicard to collect the amount in full or I could request validation of the debt within 30 days. What should I do? I only have 2 days left to reply. Should I request a debt validation. Exactly how should I reply to them as I don’t have the money to settle the debt. What is the best way for me to prevent a lawsuit. This account has never gone to a CA.
Always start with a debt validation letter. An attorney acting for a credit card company is covered under the Fair Debt Collection Practices Act. The worst that could happen is that they won’t respond.
Chase Credit Card sends their dogs Zwicker and Associates as a collection agency. They are well known for their threatening tactics and unwillingness to settle the debt or to come up with a reasonable payment plan (Google Zwicker and Associates ). I am currently in dispute with them. They have called me and my husband over 17 times at our jobs despite our cease and desist letter. What should we do at this point? they are also threatening wage garnishment and placing a judgment against our home.