Settling Credit Card Debt With Collection Agency

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Latest post 10-29-2012 10:19 PM by adjuster jack. 1 replies.
  • 10-29-2012 9:28 PM

    • BenRieder
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    Settling Credit Card Debt With Collection Agency

    I graduated college 4 months ago and I've been luck enough to land a great job but now that I'm in the "real world" I am having to deal with some mistakes I made while in school. One of these, like many other students, was racking up credit card debt. I was able to keep one in good standing, which I'm currently paying off, but I have another one that was sold to a third party that I would like to settle. (Full disclosure, the debt has actually been sold 4 or 5 different times) 

    Considering that the debt has been sold many times I'm expect that the company currently holding it has paid maybe 5 to 10 cents on the dollar and for that reason would be open to settling it for very little. 

    The company called me and I told them that I'm interested in settling the debt but I would first need to see proof that they own the debt. That was earlier today and they said they would send the right documentation in the mail.

    My First question is, how can I be sure that what they send me is legit? Is there something I should look for to ensure I am actually working with the company who owns the debt?

    As long as they are the real company that owns the debt I am going to offer to pay about 30% of the total amount. They are trying to say the debt is $3900 but that is after everyones BS fees, the actual debt is $3200. So, I will be offering to pay $1000. I should say that they sent me some generic piece of mail saying they would settle for 70%. There is obviously a large cap between 30% and 70% but I'm ready to play hard ball. I have no interest in getting a house, car, etc any time soon so I really don't need a good credit score. I plan to let them know this so they will understand that too me it really doesn't matter and they can take the $1000 or sell the debt to another company. 

    My second question is, what do you think about this approach? I'm aware it's not a great attitude but honestly I don't make that much and just scraping together the grand won't be easy, plus I'm going to need to start paying off my ridiculous student loan total so it is what it is.

    My third question is, how can ensure that the settlement agreement is legally binding? I've read that others have settled with these types of companies and if they're shady they will turn right around and say "oops well that wasn't a legal document and we're requesting the full amount now". Do I need to pay a lawyer to draft up a settlement agreement?

    My last question is, how can I get this account settled with the credit agencies? Once the debt is settled I would like my credit report to show the account as settled rather than open or whatever. Like I said it doesn't really matter but I'm sure it's better to fix my credit report sooner than later. That way, down the road, when I am ready for a house, I don't have to deal with it then.

     

    Thank you for any help! This is such a great resource!

  • 10-29-2012 10:19 PM In reply to

    Re: Settling Credit Card Debt With Collection Agency

    BenRieder:

    My First question is, how can I be sure that what they send me is legit? Is there something I should look for to ensure I am actually working with the company who owns the debt?

    A better way of handling that question is to wait till you get the documents and come back to this thread and let us know what you received. There's really no way to tell you what to look for because it could be anything, everything or nothing.

    BenRieder:

    As long as they are the real company that owns the debt I am going to offer to pay about 30% of the total amount. They are trying to say the debt is $3900 but that is after everyones BS fees, the actual debt is $3200. So, I will be offering to pay $1000. I should say that they sent me some generic piece of mail saying they would settle for 70%. There is obviously a large cap between 30% and 70% but I'm ready to play hard ball. I have no interest in getting a house, car, etc any time soon so I really don't need a good credit score. I plan to let them know this so they will understand that too me it really doesn't matter and they can take the $1000 or sell the debt to another company. 

    Your rather naive about that. The collection agency doesn't care that you won't need good credit. All they'd have to do is file a lawsuit, get a judgment, garnish your wages and levy your bank account. That'll add a thousand or two in lawyer fees to the debt and judgments in OR are good for 10 years.

    BenRieder:

    My second question is, what do you think about this approach? I'm aware it's not a great attitude but honestly I don't make that much and just scraping together the grand won't be easy, plus I'm going to need to start paying off my ridiculous student loan total so it is what it is.

    Never hurts to try it. On the odd chance that they take the thousand make sure you get a written settlement agreement when you hand over the money.

    BenRieder:

    My third question is, how can ensure that the settlement agreement is legally binding? I've read that others have settled with these types of companies and if they're shady they will turn right around and say "oops well that wasn't a legal document and we're requesting the full amount now". Do I need to pay a lawyer to draft up a settlement agreement?

    You can probably get a lawyer to draft one for a couple of hundred. A lawyer probably has stuff like that on his computer and can knock it out rather quickly.

    BenRieder:

    My last question is, how can I get this account settled with the credit agencies? Once the debt is settled I would like my credit report to show the account as settled rather than open or whatever. Like I said it doesn't really matter but I'm sure it's better to fix my credit report sooner than later. That way, down the road, when I am ready for a house, I don't have to deal with it then.

    Sorry, but the only change to your credit report would be something like "was delinquent, now paid." That's all you can expect. Creditors have contract with the credit bureaus that would be cancelled if they did it any other way.

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