esi

received my debt validation, so have prepared a response that is a variation of the pay for delete letter, need advice

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I have a debt in the $1400 range. I responded to the debt collectors original communication by sending a letter for debt validation. By the way, the SOL has not passed as this debt is only about 3 years old. In response to my letter, an attorneys office responded that represents the collection agency, validating the debt. They have not threatened to sue yet, and as of this point we have not communicated any more. In response I have prepared a variation of the pay for delete letter to the collection agency and attorneys office.

The version to the CA:

Dear Collection Manager:

This letter is in response to the debt referenced above. As I am currently trying to correct my past mistakes and fix my credit, I wish to save us both some time and effort by settling this debt and avoiding all unnecessary further actions.

I am aware that your agency, (COLLECTION AGENCY) has the ability to report this debt to the credit bureaus as you deem necessary. Furthermore, (COLLECTION AGENCY) has the ability to change the listing since (COLLECTION AGENCY) is the information furnisher.

I am willing to pay this debt in full in return for (COLLECTION AGENCY)'s agreement to remove all information regarding this debt from the credit reporting agencies within ten calendar days of payment. If you agree to the terms, I will send certified payment in the amount of $1xxx.xx payable to (COLLECTION AGENCY) in exchange to have all information related to this debt removed from all of my credit files.

If you accept this offer, you also agree not to discuss the offer with any third-party, excluding the original creditor. If you accept the offer, please prepare a letter on your company letterhead agreeing to the terms. This letter should be signed by an authorized agent of (COLLECTION AGENCY). The letter will be treated as a contract and subject to the laws of my state.

Please forward your agreement to the address listed above.

The version to the attorney:

Dear (ATTORNEY):

This letter is in response to your letter on (da te) related to the debt referenced above. As I am currently trying to correct my past mistakes and fix my credit, I wish to save us both some time and effort by settling this debt and avoiding all unnecessary further actions.

I am aware that your office and/or (COLLECTION AGENCY) has the ability to report this debt to the credit bureaus as you deem necessary. Furthermore, (COLLECTION AGENCY) has the ability to change the listing since (COLLECTION AGENCY) is the information furnisher.

I am willing to pay this debt in full in return for (COLLECTION AGENCY)'s agreement to remove all information regarding this debt from the credit reporting agencies within ten calendar days of payment. If you agree to the terms, I will send certified payment in the amount of $1xxx.xx payable to (COLLECTION AGENCY) in exchange to have all information related to this debt removed from all of my credit files.

If you accept this offer, you also agree not to discuss the offer with any third-party, excluding the original creditor. If you accept the offer, please prepare a letter on your company letterhead or have (COLLECTION AGENCY) prepare a letter on their letterhead, whoever applies, agreeing to the terms. This letter should be signed by an authorized agent of (COLLECTION AGENCY) or (ATTORNEY OFFICE). The letter will be treated as a contract and subject to the laws of my state.

Please forward your agreement to the address listed above.

I have questions about this, however. Is there a point in sending this after I have received my debt validation? Is there anything in these letters I should add, rephrase, or omit? I really want to avoid any lawsuit and want to settle quickly and preferably save my already tattered credit score. Just looking for suggestions since I don't know the proper response after receiving a validation of debt.

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Read the following first:

 

RULES REGARDING SETTLING A DEBT:

1. NO LETTER, NO DEAL, NO EXCEPTIONS – EVER!

I have only one unbreakable rule for this game we call debt settlement. No letter, no deal, no exceptions, ever! In the course of negotiating settlements, you will sometimes run into lazy or misinformed debt collectors who refuse to grant a proper letter. They may use a variety of excuses, such as "There isn’t time and we need to get this handled today," or my personal favorite: "This is a recorded line, sir. It’s all on tape, so you won’t need a letter from us." This, quite frankly, is nonsense. If there were a problem later, how would you ever obtain a copy of that recording? You’d have to file a lawsuit against your creditor and obtain it through the discovery process. Good luck with that approach! It can be a real heartbreaker to think you have a good settlement, only to have the creditor take your lump-sum and treat it as a regular payment on the full balance and later deny ever having approved a settlement. Without a proper agreement letter, that is precisely the risk you take. The good news, however, is that getting a settlement letter is easy enough to accomplish.

The most important point to bear in mind here is that a settlement is a CHANGE IN CONTRACT between you and your creditor. The creditor’s own agreement language (i.e., the fine print on your credit card application) will always insist that any change to the agreement must be approved by the creditor and put in WRITING. So when necessary, you can apply some verbal ju-jitsu and use the creditor’s own policy to get what you need. When verbal agreement has been reached but the collector is balking at sending a letter, take this approach:

YOU: "If I accept this settlement it will modify the terms of my contractual agreement with XYZ Bank, correct?"

REP: "Yes."

YOU: "Well, doesn’t the fine print in your original agreement state that any changes must be made in writing?"

REP: "Um, uh, let me get my supervisor for you."

Escalate politely if necessary, but stick to your guns all the way up the food chain. If you don’t have a proper settlement letter, then it’s your word against theirs and you should not fund the settlement, period. By following this simple rule, you will save yourself a lot of grief.

2. FAX COPIES ARE FINE

The majority of settlement letters are forwarded via fax, and this is totally fine for the purpose of documenting the transaction. The creditor may or may not follow with a hard copy by post, but the fax copies have stood the test of time and consumers have been able to safely rely on this method for years. I cannot think of a single instance where a settlement was later disputed by a creditor when the only issue was documentation via facsimile rather than hard copy.

3. YOU WANT IT ON THEIR LETTERHEAD, NOT YOURS!

In the past decade-plus, I have overseen more than 10,000 settlements. In ALL cases without exception the agreement was documented on the LETTERHEAD of the CREDITOR, collection agency, or collection attorney representing said creditor, and NEVER on the consumer’s own letterhead. This is the correct method for the consumer handling their own negotiations, and it’s also the method employed by virtually all professional negotiation firms. Only inexperienced negotiators use the method of trying to get creditors to sign self-generated settlement letters.

There are books, e-books, websites, and a number of online "coaching" programs (aka inexperienced people trying unsuccessfully to copy what I do at ZipDebt) that claim you should mail a stream of offer letters to your creditors. This is a BAD IDEA! I don’t care if there are a few examples here and there where a creditor did agree to sign an offer letter as proposed by the client. The problem is that 99% of the time this method will FAIL. The reason is that all the major credit card banks have existing template language for documenting their settlements. The language has been pre-approved by the creditor’s legal staff. So you’re not going to get a manager at one of these banks to sign your stupid settlement letter and agree to your terms! And by insisting on doing it this way, you’ll be potentially costing yourself good settlements.

The correct technique is to verbally negotiate your settlement by telephone, and then to request a proper settlement letter be faxed to you before you present payment.

Aside from the reality that bank executives won’t sign off on your settlement letter, another reason I am opposed to working it the other way is the FOOTPRINT problem associated with any letter writing campaign. If you are using some type of "settlement system" that you purchased, think about how creditors will react when they start receiving the exact same letter over and over again from lots of different consumers. Their computer systems will catch on to this quickly, and before long, these letters will be classified as THIRD-PARTY generated. That is the kiss of death for a good settlement. Once the bank realizes you are using a system – a system that they are very much NOT in favor of! – then you can expect your account to be flagged for a different track of collections than the usual one. I’ve even seen this approach trigger early lawsuits or arbitration filings by the creditor.

Let me put it this way: Sending a series of pre-formatted settlement offer letters to your creditors is like repeatedly whacking a sleeping rhinoceros on the top of the head. Sooner or later the beast is going to wake up and have you for breakfast!

4. ANATOMY of a GOOD DEBT SETTLEMENT LETTER

Here is a simple checklist on what a proper debt settlement letter must include:

• The letter must be on the bank or agency’s letterhead
• The letter must be dated
• Your account number should be clearly identified (it’s fine if they only show the last 4 digits)
• The transaction must be described as a "settlement" or "settlement in full"
• Amount of settlement payment is stated correctly
• Payment due date(s) are stated clearly and correctly
• Individual payments sum correctly to the total amount to be paid on the settlement

Notice what this list does NOT include. It does not include a requirement for a physical signature. Surprised? Don’t be. About 99% of settlement letters don’t get physically signed. Trust me on this. It’s ok. Just like I have never seen a single settlement go sour because the creditor sent the letter by fax, I’ve also never seen a settlement go bad because the letter lacked a physical signature.

Guess what else is missing from this list? You’ll notice that there is nothing about how the settlement gets reported to your credit report. Why? Because it doesn’t matter. You can argue until you are blue in the face, and you’ll never get a creditor to alter the language by which it reports settlements, nor should you care in the first place. All settlements get reported as "settled for less than full balance," or words to that effect, and they carry the same credit score code no matter what words are used. If it doesn’t get reported correctly, you can dispute the entry later on with the three major credit bureaus. But you can forget trying to have your creditor forgive 50% or more of your debt and also help you clean up your credit at the same time! It simply doesn’t work that way, and many an amateur has blown a perfectly good settlement over this point. Negotiate your settlements, THEN worry about your credit!

 

I may have more, good luck.

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@esi

 

If they are reporting the debt on your CR, I would be very surprised if they agreed to remove the entry. 

 

Is this a collection agency (collecting FOR the original creditor)?  Or is this a debt buyer (original creditor no longer owns the account)?

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They are reporting on my CR, and I'm not sure about your second question, but the sum they are asking for is exactly the sum I owe to the original creditor, so I guess they're collecting for the original creditor.

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In the DV packet I received there is a Bill of Sale from the original creditor to the collections agency, which has a part that reads "Seller hereby transfers, sells, conveys, grants and delivers to Buyer, it's successors and assigns, without recourse except as set forth on the purchase agreement, to the extent of its ownership, the receivables as set forth in the notification files..."

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So from what I understand now, I should call the attorneys office and try to negotiate a settlement by phone and receive a letter of whatever we discuss in writing before paying a cent, and drop all hopes of removing entry from my CR?

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@esi

 

The original creditor no longer owns the account.  Portfolio bought the account from the OC.   I don't believe that your written offer to settle would reset the SOL, but I'm not positive.  You need to check your state laws. 

 

If you want to settle, read Tom's post. 

 

So from what I understand now, I should call the attorneys office and try to negotiate a settlement by phone and receive a letter of whatever we discuss in writing before paying a cent, and drop all hopes of removing entry from my CR?

 

 

Yes.  Just be careful and do not agree to anything before getting the appropriate details in writing.

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Don't call them, write them a letter to discuss settlement and send it CMRRR. That way you will have a paper trail as to what was said etc. I am not a fan of trying to settle, especially with a JDB as they will lie to you from the beginning to the end of the deal and you will NOT get what you had hoped for or expected. Just my thoughts.

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I'm going to bed now, not as young and pretty as BV is or a night owl either, so I will throw this out. Make sure their letter is something like this on their letter head and make sure it fit's your situation if you must try and settle. You never did say what the SOL was for your state:

 

 

Settlement letter:
 
This agreement is made and entered into this _________________ day of _______, 2013 between XXXXXX and any of its heirs, assigns, predecessors, and/or affiliates (“XXXX”), XXXXXXX, any of its heirs, assigns, predecessors, employees and/or affiliates and XXXXXXX with reference to the following:
 
I. Certain disputes and controversies have arisen between the parties hereto arising out of and related to a XXXXXXX Agreement previously owned by XXXXXXX. and related account with assigned number XXXXXXXX, previously, allegedly, entered into between the parties and later assigned to XXXXXX, which disputes and controversies have resulted in the filing of a lawsuit titled XXXXXXXXX, in which XXXXXXXX filed a counterclaim against XXXXX and certain XXXX Parties with threats to include more XXXXX Parties, with assigned case number XXXXXX now pending in the XXXXX Court, and this mutual release encompasses all claims in the aforementioned actions as well as any and all claims between the parties concerning or related to the subject matter thereto including but not limited to any and all pending counterclaims and any and all counterclaims which may be brought in said action. 
 
II. It is the intention of the above-named parties to finally and forever settle such disputes and controversies as only between them and release each other from, fully and completely, all claims, demands, and causes of action based upon or relating to the facts related to or arising from the transactions involved in the above-referenced litigation.
 
III. In consideration of the mutual promises, representations, acknowledgments, releases, covenants and commitments set forth hereinbelow, the parties hereby agree as follows: 
 
1. Each party will bear their own court costs.
 
2. XXXXXX and XXXXX will dismiss all claims in XXXXX with prejudice. 
 
3. XXXX will not issue a Form 1099 regarding the XXXXXXXX Credit Card Agreement with assigned account number XXXXX.
 
4. Each party, except as to such rights or claims as may be created by this instrument, hereby releases, remises and forever discharges and holds harmless each other party hereto and each of the party’s present and former agents, attorneys, servants, officers, directors, employees, shareholders, principals, predecessors, alter egos, parents, subsidiaries, sureties, heirs, executors, administrators, trustees, successors and assigns, including but not limited to XXXXX and XXXXX, from any and all claims, demands and causes of action heretofore or hereinafter arising out of, connected with or incidental to the dealing between the parties hereto prior to the effective date hereof, including, without limitation on the generality of the foregoing, any and all claims, demands and causes of action reflected in the facts as described in the aforesaid described transactions and lawsuit. 
 
5. The parties agree to refrain from publicly disseminating this agreement, the settlement terms embodied herein, or any other information regarding any dispute arising from or related to the transactions described above.
 
6. XXXXX will cause its tradeline regarding the XXXX Credit 
 
7. Card Agreement with assigned account number XXXXX to be deleted from XXXXX credit report. 
 
8. Further, XXXX will forever release, remise and forever discharge and hold harmless XXXX., any of its heirs, assigns, predecessors, employees and/or affiliates, including but not limited XXXXX, individually, as well as and all current and former counsel of XXXXXX who have provided services regarding this matter, including but not limited to XXXXXX and any of its heirs, assigns, predecessors, employees, and/or affiliates, including but not limited to XXXXXXXXX from any and all claims, demands and causes of action heretofore or hereinafter arising out of, connected with or incidental to the deal between the parties hereto prior to the effective date hereof, including without limitation on the generality of the foregoing, any and all claims, demands and causes of action reflected in the facts as described in the aforesaid described transactions and lawsuit. 
 
IV. Each of the parties to this Agreement represents and warrants to, and agrees with each other party hereto, as follows:
 
1. Each party has had to opportunity to receive independent legal advice from attorneys with respect to the advisability of making the settlement provided for herein, and with respect to the advisability of executing this Agreement.
 
2. No party (nor any officer, agent, partner, employee, representative or attorney of or for any party) has made any statement or representation to any other party regarding any fact relied upon in entering into this Agreement, and each party does not rely upon any statement, representation or promise of any other party in executing this Agreement, or making the settlement provided for herein, except as expressly stated in this Agreement.
 
3. Each party has not heretofore assigned, transferred, or granted, or purported to assign, transfer or grant, any of the claims, demands and causes of actions disposed of by this Agreement.
 
4. No threat, promise or representation of any kind has been made by any other party hereto or anyone acting on behalf of any other party hereto, except as is expressly stated in this Agreement.
 
5. Each person executing this Agreement on behalf of any party is fully competent and authorized to execute this Agreement on behalf of such party.
 
 
V. Each party is aware that it may hereafter discover claims or facts in addition to or different from those it now knows or believes to be true with respect to the matters related herein. Nevertheless, it is the intention of the parties to fully, finally and forever settle and release all such matters, and all claims relative thereto, which do not exist, may exist, or heretofore have existed between them. In furtherance of such intentions, the releases given herein shall be and remain in effect as full and complete mutual releases of all such matters notwithstanding the discovery or existence of any additional or different claims or facts relative thereto. 
 
 
VI. This Agreement effects the settlement of claims which are denied and contested, and nothing contained herein shall be construed as an admission by any party hereto of any liability of any kind to any other party. Each of the parties hereto denies any liability in connection with any claims and intends hereby solely to terminate and avoid litigation and buy peace.
 
VII. This Agreement is the entire Agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous oral and written agreements and discussions. 
 
VIII. The parties hereto agree that this Agreement shall be interpreted according to Ohio Law. 
 
IX. Should any part of this Agreement for any reason be declared by a court of competent jurisdiction to be invalid and not otherwise enforceable, such decision shall not affect the validity of any remaining parts, which remaining parts shall continue in full force and effect.
 
X. This Agreement may be executed in one or more counterparts and each such counterpart shall for all purposes be deemed to be an original, and all such counterparts shall constitute one and the same Agreement
 
XI. A facsimile or scanned and electronically transmitted signature on this Agreement shall be deemed to be an original.
IN WITNESS WHEREOF, the undersigned have set their hands:
 
to be signed by Me and them
 
MAKE THIS LETTER FIT YOUR SITUATION.
 
 
1. 
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@TomnTex

@BV80

A question referring to my original post. Can I add maybe something to the letter I already have like this offer or I will settle for half if you won't remove it of my CR? Or add something along the lines of I dispute the amount? I truly do. This was a credit line for dental services. I went in for one appointment that cost me around $300, but they said I need my teeth pulled and yada yada and charged up all my available credit for "future work". I never had it done, called them a few times to charge it back and they didn't, and now that dental office is permanently closed. I never made payments because 4 months later I ended up broke, jobless and moving back to my parents across the country.

Also for debt like this in FL I believe the SOL is 4 years, but could be 5... currently this debt is 3.5 years old.

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I'm doing much better financially now, maybe I should hire a lawyer and let them sue and try to explain my position in court. If i lose, however, how can a judgement affect my credit score? I'm trying to repair my credit. Any recommendations for my best course of action right now?

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If they haven't sued yet, you could always dispute the debt amount as invalid since it was charged for work that wasn't done.  We considered them merchant disputes.  Did you dispute with the credit card?  I'm guessing probably care credit?

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@esi

 

If you send a letter, and if it were me, I'd include that I dispute the debt and that my offer of a settlement is not an admission that I owe the debt to them or anyone else.

 

You said that the debt is in the $1400 range.  You need to find out how much an attorney would cost you. 

 

As far as any demands that you may make, you can make them, but Portfolio doesn't have to agree.  Also, since the account is still within the SOL, your bargaining power is not as strong.   If you settle, they are required, however,  to note that settlement on your CR.   They might note that the account has been settled for less than the full amount.  Note that if they sue you, and the case is dismissed without prejudice, that type of dismissal would not be enough to have their entry removed from your CR.

 

If you end up settling, I'd want the agreement to include that the agreed upon amount settles the account in full.

 

Arbitration is an option especially considering the amount of the debt.  It might not be worth it for Portfolio to arbitrate.

 

It all boils down to what you want to achieve and deal with.  If you want this over and done with, you might need to settle.   If you don't want to settle, then you just have to wait and see what happens.

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As far as arbitration, I can tell you there is a very high chance that PRA will ignore any arbitration demand.  They will refuse to pay JAMS or AAA and then the arbitrator will close your case for non payment.  Although this does protect you from them suing (if they file suit after you initiated arb, even if it was closed for their non payment, it is an FDCPA violation and you can show the court you already attempted arb and claim court is improper venue).

 

As far as settlement, since this is a JDB, my personal favorite way of dealing with them is to definately always continue to deny and dispute the debt in every letter to them.  Then I would offer a low settlement to start - something around 20%.  I would say something like, "while I dispute this alleged debt, in the interest of putting this matter to rest, I will offer $280 as settlement in full with the stipulation that withiin 30 days of recipt of payment, this account is removed from all CRAs".

 

They will reply saying you are crazy and they will never agree.  I would then reply with an offer of around $300 for SIF plus deletion.  You may have to go back and forth with them a few times, and in the end they may never agree to delete, but if you are okay with the TL at least being marked as "paid" or "settled for less than full" with a $0 balance, then I can see a settlement somewhere around 50%.

 

If you feel settlement is the best route for you, that is how I would proceed.  I, personally, like to be more agressive with the JDBs and just set them up for violations, wait for them to violate, then file suit or threaten suit to get a settlement where I pay $0, or I get paid from them.  But I know that is not everyone's cup of tea.

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@Rogue198

Indeed, it is Care Credit. I didn't dispute with them. How would I do that? And how do I dispute it as invalid?

 

Well, since you didn't dispute with the original creditor (Care Credit) before it was sold not sure that it would work at this point; but as to how:  Write a letter explaining what happened & offer to settle for the amount that you feel you do owe ($300 I believe).  This downside is this does close the door on Cheese's & BV80's suggestion of "I don't owe it but in order to put this behind us I'll pay $X" tactic because you're admitting it's yours and just arguing amounts.

 

As far as any demands that you may make, you can make them, but Portfolio doesn't have to agree.  Also, since the account is still within the SOL, your bargaining power is not as strong.   If you settle, they are required, however,  to note that settlement on your CR.   They might note that the account has been settled for less than the full amount.  Note that if they sue you, and the case is dismissed without prejudice, that type of dismissal would not be enough to have their entry removed from your CR.

 

If you end up settling, I'd want the agreement to include that the agreed upon amount settles the account in full.

 

CR reporting on settled debt is the same if one pays 1 cent less than owed or 1% of what's owed.  It's settled for less than the full balance owed.  Now it might report as Settled; Settled for less than the full balance; Settled as agreed but it will be reported as settled. The only way any credit reporting entity can report as "In Full" is if it's actually paid in full.  Settling accounts zero's the balance & satisfies the obligation.

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CR reporting on settled debt is the same if one pays 1 cent less than owed or 1% of what's owed.  It's settled for less than the full balance owed.  Now it might report as Settled; Settled for less than the full balance; Settled as agreed but it will be reported as settled. The only way any credit reporting entity can report as "In Full" is if it's actually paid in full.  Settling accounts zero's the balance & satisfies the obligation.

 

This is true for credit report status after settlement.  However, I agree with @BV80 that I would want their agreement to say that my payment settles the account in full, just so that they can not come back later and try to collect on the remaining amout or sell the remaining amout to another JDB.

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This is true for credit report status after settlement.  However, I agree with @BV80 that I would want their agreement to say that my payment settles the account in full, just so that they can not come back later and try to collect on the remaining amout or sell the remaining amout to another JDB.

 

Gotcha, I dealt with way to many people who wanted their CR to show as "Paid in full" when they settled & I had to tell them that the creditor had to report as Settled to comply with the FCRA.

 

To achieve what you're talking about I would include language similar to what you said here:  just so that they can not come back later and try to collect on the remaining amout or sell the remaining amout to another JDB.  Something "agrees to no longer attempt to collect on, sell or assign for collection any remaining amount after the terms of this settlement have been completed."

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