So I shouldn't pay my Bills?

[Costello302]

I'm just curious, I've been back and fourth from this forum and now that I'm ready to pay my bills it seems that is the opposite of what everyone does here? I have some small bills over 3-4 years old in the amounts of anywhere from $80 - $250 and a Discover bill that may be over the SOL here which is for another thread. I now have some income and wanted to contact the OC to make payment in full. My mother paid one for X-mas with a local bank. I did receive a paid receipt from the bank. I know the credit agencies will take time to update but is this not the best process for getting out of debt. I'm seriously not interested in playing the ABC letter/waiting game and would rather make payment and wait.

Can't I just pay the debt?

[CleverCynic]

You can pay the debts, but it won't improve and may worsen your credit rating. This is why the games are necessary. If you are not being sued by them, or if the debt is beyond SOL for collectability, then there is no incentive to pay unless they will agree to a PFD (pay for delete). THen there would be no trace of the debt ever having existed.

A collection paid in full does not register in the current FICO scoring system, only the blemish. If you are going to buy a house, you'll also have to pay the debts too though, so that would be one reason to do so.

Usually we dispute negatives to see who will verify the debt as accurate, in the process some of them disappear. Then you can either try PFD, or go the more aggressive route of DV then ITS (intent to sue) based on any FDCPA violations. You learn about those from reading here and/or the act itself. It is very difficult for a collector to pursue collections without violating something in the act, and that gives you some leverage.

[VeVe]

Since the amounts are small and you have the money, of course, pay them.

However, you want to try to get the most of it. If they are with collection agencies, tell them you will pay in full if they delete the record from your credit reports. Negotiate as much as you can.

You want to get the most positive rating you can. A paid collection may drop your score a few points, but it will recover and at least you know the account is done with.

[CleverCynic]

If the debts are in collections with an agency, the OC will never see a dime of that money. This is why in principle we don't pay it as well as the lack of any FICO incentive to do so. You don't need a resource such as this site to pay old bills, it's here to tell you some better ways to go about it and protect your current situation and invest your money in more strategic ways.

Keep up on your bills and pay them, certainly, but the ones past are weighted less and less as time goes on as far as your credit score is concerned. So if you have an old debt that has caused its damage and will not improve by payment, but a current debt at xx interest, it is better to pay a current card down financially and for the best credit results. A 30 day late now hurts worse than a 1k Chargeoff 4 years ago. Strange but true. This is why you need the information we sling around here.

[Costello302]

These aren't cards if that makes any difference...

So I want to pay becuase I know personally I created the debt, didn't pay, ect... call it personal satisfaction. What I'm getting is that this will show PAID on the CR but not remove the blemishes? Does it help to pay and then dispute the debt? Most of my debts I cannot locate the current CA due to being under the radar so long for a PFD. As well I would rather not play the "games" and take time to write, wait over and over.

My big thing here is that I need a car and my credit won't allow for it. My parents have agreed to help (buy me a car in there name) if I get my debt paid off. There aren't going to want to hear I sent a letter to the CA disputing that is in fact mine, they want to know I paid it. So by doing this can I still go back and dispute to get the bad stuff removed later and wouldn't it be easier that it was paid at this point?

[CleverCynic]

Two schools of thought:

1) the CA, now having been paid, loses its appetite to punish you further and does not bother following through with the verification process.

2) a CA who would have otherwise been unable to verify due to insufficient records and uncertainty as to intimate knowledge of the debt, now verifies due to your admission of the debt being yours by virtue of having paid it.

Still, I would do the VERY SIMPLE online disputes, wait a month for the results, and then feel free to pay the remainders. No letters involved, just a couple simple check boxes at each CRA website.

As an alternative, you can poke around insidearm.com and get the pats on the back you may be looking for. It's a site for junk debt purchasers.

[trueq]

1.) You should always pay your bills.

IF YOU CAN!

If you can't, due to some unforseen circumstsance such as death, disability, business failure etc.

Most file bankruptcy. Some of us, like me, fall between the bankruptcy cracks. Don't qualify for a ch. 7 and are over the Ch. 13 unsecured debt limts. So we have to opt to negotiate or fight with our unsecured creditors as an alternative to bankruptcy.

Any unsecured debt, in default, is subject to negotitation. That's what makes it unsecured, its not attached to any property.

Unsecured debt needs to be reduced to a judgment in order to eventually to be attached by lien, garnish or seizure.

Theoretically, anyone could default on anything unsecured to get a better deal, but it wrecks your credit, thereby causing future borrowing to be more expensive.

So NOT paying unsecured bills, by choice, is a foolish long term choice.

I think most people on this site fall into the category of not having this choice because of business failure, job loss, etc.

So if you have already wrecked your credit through the bills you mention:

Either

1.) pay in full

2.) negotiate

3.) or fight when needed

or use a combination of the 3 options for the best outcome for you.

[Costello302]

Thanks, I've spoken with my father who is a Real Estate Agent. He is going to have his lender work with me to alleviate these issues. This is too much for me to do on my own and apparently just paying the OC isn't the route to go as the "baddies" will still remain on my credit.

[Robert Nashville/Savannah]

I'm just curious, I've been back and fourth from this forum and now that I'm ready to pay my bills it seems that is the opposite of what everyone does here? I have some small bills over 3-4 years old in the amounts of anywhere from $80 - $250 and a Discover bill that may be over the SOL here which is for another thread. I now have some income and wanted to contact the OC to make payment in full. My mother paid one for X-mas with a local bank. I did receive a paid receipt from the bank. I know the credit agencies will take time to update but is this not the best process for getting out of debt. I'm seriously not interested in playing the ABC letter/waiting game and would rather make payment and wait.

Can't I just pay the debt?

Not that you asked (me), but…

There is indeed a vein of thought, sometimes obvious and sometimes not so, that there is no moral or legal obligation to pay ones debts, especially if something happens that makes it impossible, for a time, to do so (or sometimes I think, even if it’s just inconvenient to do so).

Some rationalize that if a debt has been “charged off” that the original creditor has been “compensated” by tax write-offs or that you shouldn’t pay a collection agency because the original creditor doesn’t receive any of the money. As to the tax write-off theory, I’ll offer the same deal some here think is so good for creditors; for every one hundred dollars someone sends me I’ll send them 20! As to the original creditors not getting any of the money…if that were true, creditors would NEVER hire collection agencies to collect for them but would instead, always collect for themselves.

I believe this school of though you’ve noticed is a natural outgrowth of the never ending marketing that tells us that debt is good…that debt is absolutely necessary for life and that we all deserve all those things we want whether we can afford them or not. Taken to the next step, the only thing standing between all those things they want and can’t afford is the mighty, all-wonderful FICO score. So, it naturally follows anything you can do to protect, boost or otherwise strengthen your FICO score is only fair game.

There are also those who take federal law, designed to protect consumers from unfair collection practices, and/or inaccurate credit history reporting and use them as tools to avoid paying debts if possible or to re-write their credit history or both.

Least anyone think otherwise, I am fully aware that both original creditors and especially collectors make mistakes in their bookkeeping and use unfair, illegal and sometimes immoral collection tactics and I am the first to support the notion that a consumer should use the law to protect themselves from unfair practices and to ensure that when they are ready to pay a bad debt, they are paying the correct amount to the correct entity. They should also use federal law to ensure that their credit histories accurately reflect their history.

But the bottom line is, if you incur a debt you should pay the debt.

If you can’t pay for a while; pay when you can.

If you can pay some but not all, negotiate a fair settlement.

If you truly can’t pay at all, then you can’t pay and there isn’t much anyone can do about that except try to put themselves in a position where one day they’ll be able to pay.

If your ultimate goal is to finance a car purchase, I'd encourage you to consider buying the best vehicle you can for whatver cash you have on hand - car debt is the number one theif of our ability to build real wealth.

Just my $0.04

[LeslieR]

These aren't cards if that makes any difference...

So I want to pay becuase I know personally I created the debt, didn't pay, ect... call it personal satisfaction. What I'm getting is that this will show PAID on the CR but not remove the blemishes? Does it help to pay and then dispute the debt? Most of my debts I cannot locate the current CA due to being under the radar so long for a PFD. As well I would rather not play the "games" and take time to write, wait over and over.

My big thing here is that I need a car and my credit won't allow for it. My parents have agreed to help (buy me a car in there name) if I get my debt paid off. There aren't going to want to hear I sent a letter to the CA disputing that is in fact mine, they want to know I paid it. So by doing this can I still go back and dispute to get the bad stuff removed later and wouldn't it be easier that it was paid at this point?

You aren't going to be in any better position to buy a car if you pay a bunch of old collections than you are now. What you and your parents do is your (and their) business but by taking them up on their "offer" you really aren't doing anything to improve your situation, other than having wheels. No one is here to judge you, Costello -- but I think what we are telling you is that this board is about "lifestyle" repair as much as it is credit repair. Certainly if you need a car, you need a car. But what most of us have learned the virtues of doing is the cleanup so that when we get the car, we know we got the best possible "deal" and have the mindset to never make the mistakes of the past again once we're behind the wheel. Metaphorically speaking.

[Costello302]

You aren't going to be in any better position to buy a car if you pay a bunch of old collections than you are now. What you and your parents do is your (and their) business but by taking them up on their "offer" you really aren't doing anything to improve your situation, other than having wheels. No one is here to judge you, Costello -- but I think what we are telling you is that this board is about "lifestyle" repair as much as it is credit repair. Certainly if you need a car, you need a car. But what most of us have learned the virtues of doing is the cleanup so that when we get the car, we know we got the best possible "deal" and have the mindset to never make the mistakes of the past again once we're behind the wheel. Metaphorically speaking.

Having wheels equates to me keeping my 55K a year job I just landed two months ago (after being out of work for 3 years) so my situation is a little different than the traditional I want a Ferrari, I can finance it so I'm going to. Unfortunately I don't have months to write letters back and forth to x agency in hopes they comply in a timely manner.

What I was looking for was to pay my bills off now in full to the OC so I get my parents graces on help with the car, keeping employment at the same time and then figure a year down the line that the bills I paid would get updated on my reports and I could get a decent rate on a house and continue to move forward, as opposed to trying to catch people slipping to get another 10 points out of my fico sitting in my parents basement at 27.

Is paying them off in full to each OC really that bad of an idea?

[CleverCynic]

Re: Moral reasons to pay the debt:

If dealing with the OC this is a considerable factor. But the flawed part of the logic is the "hiring" of collection agencies. This is not the norm, usually the debt is sold for pennies on the dollar and the CA now owns the debt, generating millions in perceived receivables for thousands of dollars in expense. The morals involved were a factor at the time of default. After several years, it may suck, but the damage has already been done. The OC has recouped a tiny percentage of it and written off the rest (no this does NOT mean they got their money), the damage to the taxpayer has been done and so has the damage to the credit report.

So I would not say it's MORALITY driven per se, but conscious driven based on no evidence that it would undo anything immoral that has already been done. You made mistakes and that sucks but its human. Like murdering someone, you cannot undo it and there is no moral thing to do in its place, only this is a much smaller scale. You did the crime, now you do the time, and in this case its a marred credit report. Paying it will accomplish nothing real, only perceived.

There are very responsible things you can do for genuine financial health with the money instead, and that should be focused on current, legitimate and ongoing debts. Learn from the past but there is no good reason to throw money at the past as well.

[VeVe]

You aren't going to be in any better position to buy a car if you pay a bunch of old collections than you are now.

I disagree. His score may dip a bit in beginning, but it will save him a lot of time and effort down the road.

It's easier to pay an $80 bill now than it is to fight every new CA that the account gets passed on to. There's also the peace of mind knowing that once the CA's fall off the credit report that they really are gone for good. Just because 7 years is up doesn't mean the debt won't be sold to a new CA, who won't try to re-age/report it, which just means more work in disputing it off.

It's also about responsbility. I can't believe I'm going to say this, but I agree with Robert. If you incur the debt, pay the debt, especially if you can afford it. The OP said he can and wants to pay them, so he should.

[vickinicole]

Having wheels equates to me keeping my 55K a year job I just landed two months ago (after being out of work for 3 years) so my situation is a little different than the traditional I want a Ferrari, I can finance it so I'm going to. Unfortunately I don't have months to write letters back and forth to x agency in hopes they comply in a timely manner.

What I was looking for was to pay my bills off now in full to the OC so I get my parents graces on help with the car, keeping employment at the same time and then figure a year down the line that the bills I paid would get updated on my reports and I could get a decent rate on a house and continue to move forward, as opposed to trying to catch people slipping to get another 10 points out of my fico sitting in my parents basement at 27.

Is paying them off in full to each OC really that bad of an idea?

It depends on what you are trying to do;

It's important to note that paying off your debt and improving your credit are two different things. They don't necessarily go hand in hand.

You need to decide what your ultimate goal is and then follow the route that will get you there.

[CleverCynic]

Get used to this denial reason for new credit:

A delinquent debt, either PAID or UNPAID was reported on your credit report.

We all get it, the same reason for denial. Only those of us in the unpaid category have more money. THEY DO NOT CARE WHAT YOU DID AFTER IT WENT TO COLLECTIONS. Only mortgage lenders care, and that's to protect from liens put on the property, and even that is irrational if it is SOL.

[Costello302]

Get used to this denial reason for new credit:

A delinquent debt, either PAID or UNPAID was reported on your credit report.

We all get it, the same reason for denial. Only those of us in the unpaid category have more money. THEY DO NOT CARE WHAT YOU DID AFTER IT WENT TO COLLECTIONS. Only mortgage lenders care, and that's to protect from liens put on the property, and even that is irrational if it is SOL.

So my original ? of whether I should pay, the OC, is no, but to work with the CA to get them removed by paying with agreement? How do I locate the CA if the one on my reports don't hold the debt and the one that does can't locate me?

[vickinicole]

So my original ? of whether I should pay, the OC, is no, but to work with the CA to get them removed by paying with agreement? How do I locate the CA if the one on my reports don't hold the debt and the one that does can't locate me?

If your Original Creditor will accept payment, I would think that would be a best bet. Sometimes they won't though especially if they've sold the debt, so they might require you to work with the collection agency.

If you must work with the Collection Agency, make them put in writing that in exchange for you paying the debt in full, they will delete the account from your credit report.

To find the correct collection agency, write the orginal creditor for the information on who they sold the debt to. Then follow the trail; call that company to see who they sold to, on down the line till you find the company that currently holds the account.

[LeslieR]

I disagree. His score may dip a bit in beginning, but it will save him a lot of time and effort down the road.

VeVe, sorry, but that's just incorrect.

I am not disputing the fact that there are personal reasons to feel strongly about paying debts that we owe. I'm not sure if Costello has these, or if this is the stipulation his parents have put on him in order to get the car in their name. It doesn't matter to me.

I see your dilemma, Costello -- and I think your only option is to PFD. I know you have no time to write letters, but if you pay these without agreements in writing that they will be deleted, you will live with paid collections for another seven years. And Cynic is right, VeVe is wrong, PAID are just as bad as UNPAID in the general scheme of things!!

So, do you have any time to send some PFD requests, perhaps on the most recent and/or largest of your collections? If not, then count yourself lucky that you can get the car in mom and dad's name, hope you don't need any other major sources of credit in the meantime, and just promise yourself this will be the last time you need mom and dad. And work to ensure that it really is! This place will help you a lot!!

[LeslieR]

If your Original Creditor will accept payment, I would think that would be a best bet. Sometimes they won't though especially if they've sold the debt, so they might require you to work with the collection agency.

Excellent suggestion. I had a medical and contacted the doc's office. He accepted payment even though he'd assigned to a CA. After my check cleared, he pulled it back from the CA and poof, it's gone. A form of PFD.

[Robert Nashville/Savannah]

But the flawed part of the logic is the "hiring" of collection agencies. This is not the norm, usually the debt is sold for pennies on the dollar and the CA now owns the debt, generating millions in perceived receivables for thousands of dollars in expense.

I suspect you are citing opinion here much more than fact and at the same time, you are completely ignoring the age of the debt in the process. It’s likely that the overwhelming majority DOES get sold EVENTUALLY but some debt will never be sold; the OC writes it off and eats it.

However, the likelihood is that if the debt is only months or perhaps a year or two old, it is still very likely fully owned by the original creditor.

Having worked for some of the largest companies in the world I know first hand we used collection agencies to collect our bad debts (and the company you work for probably does as well)…while I’m sure there are some companies out there who sell their debts the moment they write them off, they are hardly the norm.

[vickinicole]

I

However, the likelihood is that if the debt is only months or perhaps a year or two old, it is still very likely fully owned by the original creditor.

this brings up a question on what to do with a couple debts, I could use the forums advice;

I disputed thru a CRA a debt from HSBC

I recieved a letter from HSBC saying they completed their investigation, identified the account and HSBC sold the account to First Financial. This is from a Household credit card I opened in July 2006. It's about a year and a half old.

Do you think there is any chance I can convince HSBC to work with me instead of me having to go thru First Financial?

Ideally HSBC would reopen the account for me. Has that EVER been done in the history of OC/CA Chargeoffs? I'd like the account reopened thru HSBC, pay down the debt to them and have that credit line open.

Any suggestions on achieving my goal?

[Robert Nashville/Savannah]

this brings up a question on what to do with a couple debts, I could use the forums advice;

I disputed thru a CRA a debt from HSBC

I recieved a letter from HSBC saying they completed their investigation, identified the account and HSBC sold the account to First Financial. This is from a Household credit card I opened in July 2006. It's about a year and a half old.

Do you think there is any chance I can convince HSBC to work with me instead of me having to go thru First Financial?

Ideally HSBC would reopen the account for me. Has that EVER been done in the history of OC/CA Chargeoffs? I'd like the account reopened thru HSBC, pay down the debt to them and have that credit line open.

Any suggestions on achieving my goal?

if an account is truly sold, then it isn't theirs to do anything with.

For a creditor, a debt is an asset (like owning a car)...once it's sold they have zero to say about what happens to it at that point.

Now, could it be that they could buy it back and then start over with you, sure I guess it's possible but I would think highly unlikely.

[vickinicole]

if an account is truly sold, then it isn't theirs to do anything with.

For a creditor, a debt is an asset (like owning a car)...once it's sold they have zero to say about what happens to it at that point.

Now, could it be that they could buy it back and then start over with you, sure I guess it's possible but I would think highly unlikely.

is it possible it isn't truly sold? I guess I could write them and ask if they'd reopen it and that I don't want to work with a Collection Agency and see what their response is?

[Rick9972]

Having worked for some of the largest companies in the world I know first hand we used collection agencies to collect our bad debts (and the company you work for probably does as well.

The credit manager for my company has stated, "I will never hire a CA, for any reason. They actually have rules/laws they have to follow. My collectors can say and do anything to collect and the preemption clauses in the FCRA shields us completely."

Back to the topic of discussion. I thought like the OP does about 5 years ago. I dropped almost 4k in paying collection accounts. I just pulled the dun letters and sent the money.

NOw 5 years later, all of them are still on my CR and half state they have never been paid. Plus since I have been identified as a "s4cker" I have several additional accounts added to my CR that were never mine. So do I feel much of a obligation to CA's. The answer is No. If it is a Legit debt, I will pay it, but I will have a written agreement in hand of exactly what I am paying and to whom. So in another 5 years from now when they try to stick it on my CR again, as most of them have already done, I will have the documentation to instantly sue.

[TTigggers]

I disagree. His score may dip a bit in beginning, but it will save him a lot of time and effort down the road.

Wrong They will have a long lasting negative effect. I know from personal experience paid a couple off in 04 when I had the money...Big Mistake

It's easier to pay an $80 bill now than it is to fight every new CA that the account gets passed on to. There's also the peace of mind knowing that once the CA's fall off the credit report that they really are gone for good. Just because 7 years is up doesn't mean the debt won't be sold to a new CA, who won't try to re-age/report it, which just means more work in disputing it off.

Once again wrong. 4 out of 7 that I paid have tried to collect the money again 2+ years after I paid. Not to mention CA have tried to collect the difference of the settlement amount from me. Big PITA

It's also about responsibility. I can't believe I'm going to say this, but I agree with Robert. If you incur the debt, pay the debt, especially if you can afford it. The OP said he can and wants to pay them, so he should.

I agree but GET EVERYTHING IN WRITING. signed sealed delivered

It depends on what you are trying to do;

It's important to note that paying off your debt and improving your credit are two different things. They don't necessarily go hand in hand.

You need to decide what your ultimate goal is and then follow the route that will get you there.

I agree 100% Well Put

So my original ? of whether I should pay, the OC, is no, but to work with the CA to get them removed by paying with agreement? How do I locate the CA if the one on my reports don't hold the debt and the one that does can't locate me?

How do you know they don't hold the debts? Have you talked to them? Call the OC they will tell you which CA they sold it to then call that CA and ask who they sold it to. You will get answers and CA will come out of the woodwork looking for your money.

Back to the topic of discussion. I thought like the OP does about 5 years ago. I dropped almost 4k in paying collection accounts. I just pulled the dun letters and sent the money.

Me Too STUPID STUPID STUPID

Now 5 years later, all of them are still on my CR and half state they have never been paid.

Just like I stated earlier

Plus since I have been identified as a "s4cker" I have several additional accounts added to my CR that were never mine.

Same with me. Again a big PITA

So do I feel much of a obligation to CA's. The answer is No. If it is a Legit debt, I will pay it, but I will have a written agreement in hand of exactly what I am paying and to whom. So in another 5 years from now when they try to stick it on my CR again, as most of them have already done, I will have the documentation to instantly sue.

Well put. This is the only way to handle these low life bottom feeders.

I thought I was doing a good thing by paying back my debts Big mistake what did I get for it nothing my credit score dropped almost 100 pts (not a little ding as stated before) so get it in writing and get the TL deleted.