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 – Very valuable info. How about hospital debts? in 2003 by spouse was in & out of hospitals for several months. I signed the “authorize to treat” paragraph in each instance, but REFUSED & crossed out the paragraph stating signor agrees to pay any balance not paid by insurance/any unpaid balance. the hospitals/their collection attys continue periodically to collect these debts from my spouse. do you know anything about these type debts? also, what if I had signed that I would pay bal? Any SOL on medical debts like these? What category do they fall in? THANK YOU KRISTY! d
When a collector calls tell them to hold on, and play some music thru the phone for them while waiting, then go do your chores!!!!!!
I have read your book and many other books concerning different proceedures on how to “win” with collectors and how to clean up your credit and up your score. Most of my collectors are at LEAST 3 yrs or older. Last year I signed up with a monthly creditoring monitor service and began to “fix” things. I was well prepared to do this, with all my template letters and advice in had. Year and half ago..my average credit scores was about 590, with about 22 creditors. A year and half later, my score is even LESS..about 570..with about 8 creditors. Unbelievable? Well, let me tell you how this happened..yes..some did take theirs off because they couldnt prove they owned the account. NO ONE…repeat NO ONE..and yes I DID do it properly..no one wanted to settle..all I go was nasty letters. What no one tells you, is the remaining crediors, or collectors..are now ‘refreshed’ and want to begin the whole process of harrassing you all over again. Most have only reported to one credit bureau, but almost all, in revenge, would report negative info to ALL THREE in hopes to wear you down. Thats when all my scores dropped. I sure this doesnt happen to just me. I even had one creditor (owed $400) look up my name and address on the internet and contact me AND my relatives, including EX INLAWS. Talk about embarrassing..I havent seen them in 8 yrs. So now someones going to say “get an attorney and sue”. Well, the attorney that I contacted, an expert on collectons, told me ” I should pay my bills”. Period. Guess on attorney pay I could. Sue in small claims? Most are out of state, and the proceedures Ive read about Im not prepared to handle. Call me weak, but I have been to small claims before, and its not a fun time.
This is just what I wanted to share with everyone as to my experiences. When I read and read about how “easy” it is..Im here to tell you that many do nasty things, and get away with it, and we are helpless unless your welling to spend alot of money to get this fixed. I cant.
I’ve had the same experience. Good Luck and keep going after it . You’ll come out OK.
I have found all this info to be very helpful. I wasn’t aware that disputing them with the credit agancies refreshed them until it was already to late. Score dropped 30 points. Now I am sending in dispute letters and hope to clean it up. I have three that are with collections and they are *$$holes!!!!! Hopefully my well writen letter (thank you for by the way) will resolve these matters. Best website I have ever come across!!!!
I have tried for months to get this one collection agency to validate my debt. They will not do it and when I threatened to sue them if they did not validate the debt and remove it from my credit report, they sent me another collection letter and stated that they had complied with the law and reported my debt as “disputed” with the credit bureaus. I don’t understand the information I have paid for from the Credit Inforcenter, because that seems to be their position and the credit bureaus agree. How do I get this unvalidated debt removed from my credit reports?
First off great site..I have learned a bunch. I have a question I am being sued by Capital One Bank (USA)N.A., but the accounts in question are from Capital One F.S.B., which is a seperate entity. I have previous statements that show this as the company to send payments too. When this goes to trial it should be dimissed right?
What about a judgement against me from a landlord? I missed the court date so they went for the landlords side, of course. But the landlord failed to mention in court that he was holding my 650.00 deposit. Can or should I take the Landlord back to court now? It’s been a year?
Sharon, try out our discussion boards to get a specific answer to your question.
I need help! I had a good credit score for a 21 year old who started. Then I went back to school and took out a school loan, 2007. At work I had a conflicting Schudle and I was paying hourly for my classes, Pilot. I was studing my dream and my job was getting in the way eventually they both excused each other along with all my credit cards. I started working in a dealership, but the economy is not helping at all. I’m worried about a couple of things. First, can I rebuilt my credit and what can I do about collections. I used to pay all my balances in one shot, but I’m very worried about my situation. What are some things I can do to rebuild my credit fast and if I could erase any, or all the negative incuries on my credit. Second, I am afraid of not flying again. Thank you for taking the time to read this.
Forgot to mention a couple of things in my last comment. First of all, awesome website and I have learned a lot from it.
Leo, try out our discussion boards to get a specific answer to your question. (Link at top of page.) Thanks for the compliments!
I had about $1,000 in Medical bills (ironically, owed to a non-profit hospital!) turned over to a collection agency.
The hospital told me that this was a “good option” for me, because I could not pay the balance off in 6 months or less. But the collection agency would have better options available. Sure they would!
I had a VERYbad experience with the same agency in the past. They garnished MY wages, because my husband at the time did not pay his bills, and was not working. While they did supposedly leave two court summons at my house, the fact that I never saw them means nothing. (I would have been in court, with BELLS ON, had I known!) Apparently, this is legal in the state of CO.
So, although I am paying what I can, I was sent a letter, threatening to take me to court. Which would mean my wages would be garnished, and I would be in even more dire straghts. (Last time, they got 30% of my take home- can ANYONE survive with that kind of loss?)
Hasn’t the hospital, in all likelyhood, already used these bills in their loss statement for that year, for a tax break? Can the hospital hand this over/sell the debt to a collection agency, against my wishes? (I have seen some info that this is NOT legal?). I tild them that I did not EVER want to have to deal with this agency again.
Because of my Ex, I have filed bankruptcy. I am trying, so hard, to improve my credit rating. These bills are not helping me. I am not happy about my financial situation. I cannot, at this point, even imagine what it would be like to have my ends meet. Ironically, I have a good job. Marrying the wrong guy – that I will be punished for forever! Dont get me started on marital property laws! They have been made punitive – not the intent, but what has been done.
Is there anything I can do about these debts? This collection agency? I did actually find the name of the hospitals CEO, and the CEO of the agency. (I got a little help in the past by going higher up in the company). They know where I work – I have worked there since I moved here. They know where I live; they have my phone number.
I am tired of living in fear.
Thank-you-
i am handling a debt collection attempt from a so called”law firm” for my elderly mother. they have made her life a living hell. she tried to deal with them in good faith & made regular monthly payments. despite this they kept harrasing her. i have been answering my moms phone & when they call & ask for my mom i try to confuse them, don’t know this person, she’s in a out of state nursing home, i would turn the table on them & interogate them. while all fun with the ”law firm/collection agency” has been going on, i have been getting dirt on them & compiling TONS of info & all the court actions brought against them & learning everything i can about fed. law & state law. i don’t want to start my contact with them concerning demand for validation because i want to be confident that i know more about them that they know about my mom &me because i am planning to sue. i have 2 questions, can i demand validation any time during collections or only 1st 30 days? 2nd question, this ”law firm” is the 2nd collection agency trying to collect & i want to clarify that in the contract with the original creditor she owed the original creditor or their assignee. does that mean that when the 1st collection agency sold debt to ”law firm” that technically she dosen’t owe them because they are not the original creditors assignee & is it harder for them to validate debt? sorry so long & thank you. I WANT TO DO TO THEM WHAT THEY DID TO MOM!
how do you remove a repo from credit report
I was sued by a collector. It was a debt from a Providian card, approx $10,000 due. This collection lawyer said he bought the debt, and sued me. It forced me into bankruptcy chap 7. So they will sue you. I was lucky and filed under the old chap 7 law.
Hi Kristy,
I owed $100k in credit card debts with 2 creditors, one with $70k and the other one with $30k. I can’t file chapter 11 beacuase I own a house and 2 rental properties with my sister as the co-owner on them , also there’s some equity in both properties. I can’t afford to pay my credit bills any more due to lack of cash. If the bank sue me or send my accounts over to collection agency. Can they put a lien on my rental properties? You said if my account go to collection, that mean I’m home free. If the collection agency sue me, how should I do? What’s the best way to resolve my problems now? Any advise?
i was sued by a collection attorney who had bought a debt and i got a atty he demanded proof of the debt the atty could not provide absolute prrof so it was thrown out of court it cost my 500.00 but it was cheaper than the inflated amount this blood sucker tried to get IF i had not fought it he would have put a lien on me and got it
@gordon – good work! Who is your attorney?
Kristy,
You (and your terrific website) have more than helped my husband and I deal with an unbelievable collection agency! We got an atty and have them in court trying to get their case dismissed based on their inability to provide proof of ownership… however, atty said we could not use the divorce papers signed by my husband’s ex-wife 5+ years ago, where she acknowledged and claimed responsibility for the debt (she used the card that was in his name and created the debt), regardless, SOL had passed, BUT –and this is where I pick your brain: collection agency claims a payment was made 2 years ago -absolutely false!, as we were (ironically) out of country getting married the very week they claim payment was made- we even archived bank records to make sure we were not ‘forgetting’ that had sent a payment… nothing on bank archives proving we aren’t crazy, and losing our memories. Bullying and being belligerent is one thing but FALSIFYING info on credit report… HOW do we hold them accountable for that?