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Proper methon of paying Collection Agencies


pinkeysas
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I pulled a copy of my credit report and there are 3 CA listed that I owe money to. I have not been contacted by any of these CA's by phone or mail. I only just found out about these debts by pulling my credit reports. I contacted the OC and found that they have in fact been sold off to collections. I am wondering, should i call these CA's and make a settlement offer of 25% of amount owed? Or should i still send them all a DV letter by cert mail.

If i do send them a DV letter, once validated. How then do i proceed to make a settlement offer?

Thanks for any help you can give.

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I pulled a copy of my credit report and there are 3 CA listed that I owe money to. I have not been contacted by any of these CA's by phone or mail. I only just found out about these debts by pulling my credit reports. I contacted the OC and found that they have in fact been sold off to collections. I am wondering, should i call these CA's and make a settlement offer of 25% of amount owed? Or should i still send them all a DV letter by cert mail.

If i do send them a DV letter, once validated. How then do i proceed to make a settlement offer?

Thanks for any help you can give.

Be aware that when you call them, you awaken the collection proceedings. I personally never call collection agencies. I am not sure how old they are but be aware this could happen. If you decide you want to settle, just remember that any balance left over of $600 or more will be sent to you in a form 1099 for tax purposes. You will have to include this in your taxes as income. If you do settle, make sure that your settlement includes the "pay for delete" which means if you pay, they will delete it from your credit report. Make sure you get this in writing first!! If you pay first, they are not obligated to remove the delinquency. There are sample letters on the forums you can use for this purpose. xpopcornx

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I pulled a copy of my credit report and there are 3 CA listed that I owe money to. I have not been contacted by any of these CA's by phone or mail. I only just found out about these debts by pulling my credit reports. I contacted the OC and found that they have in fact been sold off to collections. I am wondering, should i call these CA's and make a settlement offer of 25% of amount owed? Or should i still send them all a DV letter by cert mail.

If i do send them a DV letter, once validated. How then do i proceed to make a settlement offer?

Thanks for any help you can give.

I agree w/ the other responder about getting things in writing. I was just going to add that it may not be worth mucking with it if it's beyond 4-5 yrs old. You'll have to weigh the risk. When you pay it, it will re-age thus appearing to be a newer collection. So, take into consideration the age of the collection acct itself. JMHO. It's sad that folks can't even pay their bills and improve their credit and that it actually can WORSEN it.

Elyse

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I know that i owe this money these are my debts. I believe that the SOL in Wisconsin is 7 years, which would mean that all of them are within the SOL. the amounts of these each are $500, $300 and the last one is $150. I can pay them. But you are saying that it will hurt my credit to do so?

I am trying to buy a house by 2008 so i wanted to get these cleared up. I understand that when trying to settle these I should not mention that fact to the CA. But that is why i want to rectify these issues. So should i send the DV letter to them? I have had the letters ready to mail for the past 2 weeks but I am just so unsure of the safest and most effective way to handle this.

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First off, I commend you for wanting to resolve the debts. Here are some things to consider when paying a CA. You claim they are yours and not timebarred. But, you always want the resolve to be in your favor, not theirs.

Send them a letter by CMRR. If the debts are less than 2 years old, offer the full amount. BUT, they must agree to delete the TL's at all 3 CRA's. Their response must be in writing and signed by an officer of the company, not an agent. Too many times this has happened and the consumer has got the shaft simply because the agent did not have the authority to agree. Most times they will deny your request, while other times they will say they can't because it is illegal. It is only illegal if they want it to be. The law simply says that IF they report, it must be true. The problem is the CRA's are trying to dictate. If they refuse, simply respond you are aware the debt was sold for pennies on the dollar, therefore, will only pay $.10 on the dollar. They will either cede or offer a different amount. Just let us know what is happening. Stress the no phone calls please, only mail.

As to the comment as to hurting your credit, just remember a collection is a collection, whether paid or not. When paid it will take time to season causing your score to go up. Thus, it could hold your score down for at least 6 months. But, most important, do realize that mortgage lenders overlook collections as long as they show a zero balance, no matter the score. As to the score, if your numbers fall below a certain level, you may only qualify for sub prime lenders, and pay a higher interest rate. Not always a problem. Let's say you have a 635 score and can only get an 8 1/2% loan, which is adjustable after 2 years. Very scary, yes, but, after one year of seasoning on your mortgage could bring your scores up suffifciently enough to qualify for a better loan. Always remember you can sign papers now and turn right around and refinance again. There is no definite timeframe to wait. To add, go to the mortgage section here and read. Look for posts by Charles. Send him a personal message or create a thread about your current situation. Charles is wonderful. Very honest and straight.

Lastly, do not, at any time, let this CA know of your intent to buy, or refinance a home. Your intent is to resolve the debts most amicably to both parties and you are sorry these were not paid sooner, but, due to personal matters, they weren't.

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im sorry i am new to this. can you please tell me what these abrv. stand for?

TL's CRA's???

Thanks again for your info. So the letter that i have ready to mail is this:

My name

Address

Collection Agency

Adress

Date

Re: Acct xxxxxxxxxx

I just pulled a copy of my credit report and noticed that your agency is reporting that I owe you a debt. I was not aware of this debt until now, and under my rights under the FDCPA, I request that you validate this debt.

This is NOT a request for “verification” or proof of my mailing address, but a request for VALIDATION made pursuant to the Fair Debt Collection Practices Act, 15 USC 1692g Sec. 809. I respectfully request that your offices provide me with competent evidence that I have any legal obligation to pay you.

Please provide me with the following:

• What the money you say I owe is for;

• Explain and show me how you calculated what you say I owe;

• Provide me with copies of any papers that show I agreed to pay what you say I owe;

• Provide a verification or copy of any judgment if applicable;

• Identify the original creditor;

• Prove the Statute of Limitations has not expired on this account

• Show me that you are licensed to collect in my state

• Provide me with your license numbers and Registered Agent

Sincerely,

Should I send this letter or should I get straight to the ponit and send a letter telling them that i am offering them a payment of .10 on the dollar pending that they remove all "TL's"?? (Oh, and yes these accounts are older than 2 years)

Thanks again for your help.

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TL - Trade Line: This is what we call the particular information you find on your credit report. Each reparting party is considered a trade line.

CRA - Credit Reporting Agency: Equifax, Experian, and Transunion

You could do the DV in hopes you can catch them in violation to offset the debt. By this, what you would want is for them to send you a computer generated "bill", which does not meet the requirement. The proof must be on the OC's own letterhead and contain a breakdown of how the amount was figured. Since the debt was purchased, most often they can not prove the validity of the debt.

OR

You could just send them an offer of settlement for $.10 on the dollar with a total deletion. What you would include is the fact that you were unaware of debt until you pulled a credit report. Also, that the debt was purchased for large discount. And, lastly, you "could say" you are fully aware they more than likely cannot prove validity of debt. Therefore, to avoid aggravation on both sides, this will be the better way, because, if they refuse, you will cause them to prove validity of debt before any futher action is taken. If it gets to this point, let us know for next step. As to the "could say", what I mean is you do not have to include this in that letter, but, wait to see their response, then, if they do not accept your offer, you can begin the prove it or else way. It is up to you.

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Thanks for your help. here is one more question.

I know that once a collection agency validates the debt, i will be sending them a settlement offer letter.

Once we come to an agreement on a settlement amount, I know that there are two(2) very important things to word in a letter to the collection agency before sending payment by money order.

1.) I need to request that the collection agency removes the item from all 3 credit reporting agencies.

and

2.) Because I live in Wisconsin I know that even after a Collection agency cashes the settlement payment that we both agreed upon. They can still legally come after me at a later time for the amount unpaid.

So, what do i write in a letter to the collection agency to cover my rear to make sure that #1 does happen and #2 does NOT!!!

Thanks for any help.

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Just write it in your letter. You could word it as follows:

It is understood that upon accepting this offer of settlement, (enter CA's name) accepts this payment of $XXX as payment in full, and account will not be sold, transferred, or reassigned to any other company who collects delinquent debt.

You can change the wording to fit your situation, or, if one of the others has another idea, do not hesitate to use as you decide.

Since tyou are aware of the law of your state, do not include the verbiage regarding the endorsing of a check. Some states require that a definite set of circumstances must occur before this can be true.

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