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Collector wants paystubs + tax returns in order to settle. Give it?


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Ideally I'm looking to settle, but in order to get the settlement in a ballpark that I feel comfortable the agency said I must provide 2 years of tax returns, 2 pay stubs, and a hardship letter. I've settled other accounts and never dealt with this. This collection agency is a "law firm" and was outsourced by the original creditor (who still owns the debt).

I feel very skeptical about giving them this information as they could use that against me in court (if we ultimately don't settle). Granted I can elect JAMS, but I don't think this info is relevant to them.

What would you recommend? 

At this point I'm thinking of just waiting it out with my current offer (25-30%) and see if they end up biting without the additional information. If they decide to sue, then elect arb. But should I take the chance of a settlement by sending them those docs?

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It's really a tough call. That information couldn't be used against you in court per se, but it could be to your disadvantage if they obtained a judgment against you.

Some creditors consider a reduction in the principal amount owed if there is a showing of need. I have seen creditors ask for bank statements, W-2's and pay stubs as proof that the debtor does not make $100,000 per year. I get where they are coming from they want to be sure before offering a reduction of a balance due to hardship, that there is actual financial need for it. 


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