Trying to Settle with a Collection Company

[boyd_m]

There is also another debt, orginally with Chase for around $15000. They have a collection company trying to collect the debt for them and will not talk to us. They have not sold the debt though. The collection company originally contacted my sister with all kinds of threats that they could take her husbands 401k, their house and garnish his wages. She agreed to settle with them for 80% and let them withdraw from her account in a couple of weeks. They were going to get the money from the 401K. I had her talk to a lawyer and the lawyer said they couldn't touch her husband assets since the card was in her name and the only thing the could do was but a lien on the house and told her not to cash out the 401k but to call the collection agency back and try to get a better settlement.

She called them back and told them that she was stopping the withdrawl because she wasn't going to have that much money in there and because they had lied to her about what they could do (which I understand is even illegal). They offerred them 30%. At this time the collection company said that they were only authorized by the card company to accept 80% and that if she stopped the payment that offer was withdrawn and she would owe the full amount again.

Questions I have are:

Hasn't the card company already written the debt off since that collection agency has it and can't the collection company settle for pretty much whatever they want?

Will the collection agency come back and try to negotiate with us? If they don't, what are our other options to get the debt settled?

[nascar]

The collection agent, as long as they are working on behalf of the original creditor is going to attempt to get as much as they can as quick as they can, period. Any authorized settlement amounts etc., is a part of the agreement between the original creditor and the collection agency.

As long as the original creditor still owns the account, the collection agent is limited in what they can legally do. Number one, they don't have legal standing to sue you, they can't take your house or 401k or firstborn, no matter what they tell you. If they do tell you these things, they are breaking the law.

You'll be much better off not dealing with these people by telephone. Do everything in writing. I'd also think about closing the bank account. They have your account number now; they'll find a way to get the money out of your account. You'll wake up one morning and it will be gone. Protect yourself.

[eagle82]

You sd they threatened you with garnishment and taking their house. Did they say that they WILL do something if you don't comply, or that it's a possible outcome after a judgement? If it's the latter and the debt has been charged off, than that's ok, but if they actually threatened you with a clear statement, from what I know, that's an FDCPA violation.

If they're making threats like that, you should consider getting a lawyer and try to sue them. That kind of activity shouldn't be stood for. When I (as a collector) process suits on debtors, we try to get a judgement on the person (which I think lasts for 20 years). After a judgement, if the debtor still fails to pay, we go for a writ of execution. After the execution, we can go for a levy or lien, or garnishment, which is perfectly legal.

If the debt is charged off, than it's up to the collection agency / law office to bring forth the legal stuff. But if the original creditor still holds the debt, than only that creditor can go foward legally, not the collection agency.

I think you should offer a 50% settlement and accept 70% if they offer it. Plus, they are always more apt to get you a better deal towards the end of the month.

[AISLE4]

On a 15K debt you can do much better than a 70% settlement with Chase (or any other creditor). If the account has not charged off yet you can likely get 40% or under. I'd start with a 25% offer close to the charge off date and expect to end up around 35%-40%. Do research on settlements others have gotten with Chase. Keep in mind that the guy above me identifies himself as a collector. He'd like to be the collector getting you to settle for 70% on a 15K debt.----Don't mean to suggest that eagle82's pov and experience are not welcome here, but research and read read read before you do anything.

[eagle82]

You might be able to do better than 70% and you might not. It depends on a variety of factors. The worst off your circumstances, (ie. credit report, exployment status, etc) the better you are to get a better settlemet. With my experience as a collector working with a charged off acct on Chase Manhattan, 70% is likely. If the acct is not charged off than I honestly have no idea. I only work with charged off accts the have been bought by investment companies.

As for AISLE4 comment about me being the collector, would I mind getting the bonus on 70%...of course not. Buy as a consumer working to get out of debt, plus just being the type of person I am, if the person's circumstances warranted it, I'd love to get you the best deal possible.

I agree with AISLE4 statement on "Read, Read, Read before you do anything."

Just thought I'd though in my two cents.

Edit: I just wanted to point out, as a collector, it's a lot easier (especially when I have hundred and hundreds of accts I'm handling) to work something out over the phone. Plus, working in the legal section, a person's acct is already being considered for suit or has already been sued. If you've already been sued, then time is of the essence. In my opinion, you should go over the phone, just notify the collector at the start of the conversation that you're recording the call for your records (if your state forces you to). Then if a settlement can be reached, have them fax or mail out the settlement agreement letter. From a psychological standpoint, I'm always more apt to get the person a better deal if they make my job easier.