This is for anyone who can help me out, I would really appreciate it! Situation: I recently made a settlement with a Collection Agency (Cavalry) to pay $1200 on $4700 account. They gave me to March 10th to pay, I got the fax on the settlement Feb. 21st. The Statute of Limitations will start running out on this account on 2/25/08. The original creditor (MBNA) has it stated as "Charged Off as bad debt" with "$0" under balance. Question 1: I recently read that the original creditor is far more important than the collection agency on your credit report. If they put "$0" owed under balance, then I can not improve my credit score even if I pay the collection agency. Is this true? Question 2: If the above is true, and paying will not help my credit score, can NOT paying still hurt it? Should I just save my money and wait for the SOL to run it's course? (I've noticed that Cavalry keeps on doing "hard" inquiries on my Transunion. They did 2 inquiries with 10 days on this account in february) Question 3: Isn't it a law that you be given at least 30 days upon notification of settlement to pay your debt? Question 4: The CA (cavalry) told me that once I pay, they would notify the credit bureaus and it would say "Paid in full for less than entire amount". Will this wording on my credit reports hurt or have no effect on my credit score? Thank you so much for your help!
q1. paid collection or paid in full to your credit report is far better than unpaid or collection. q2. they can still sue you, think which would be better collection account or judgment on your credit report? judgments can be collected for 4-10 years depending on where you live. q3. no q4. read answer to q1. it would be better if they will agree to paid in full, but they may not be willing to do so.
Owosso does the posters name "collectman" sound like the kind of person who would give you advice that would better benefit you or the ca?
I'm not sure what you mean by this. Many things on this board indicate that 'paid collection' is just as damaging to your report as unpaid. Can you explain how FICO views the difference? In NY, judgements can be renewed at ten years extending the time to collect out to a total of 20 years. Where did you come by your information?
I was not specifying a particular states judgment time, I was simply stating a number of years as an example.
Yes after a certain time frame of the debtor not paying they are resold to purchase new accounts....whats your point?
methinks that peeper might have done a bit better job of explaining. I can't read his mind so I may be wrong but it sounds to me that he might have had a cherry picking process in mind. It works like this. The creditor sells a large amount of debt to a broker. A large debt collector might buy (for instance) 16 billion dollars worth of debt for around 300 million. He uses a software package to sort out the cherries which are most likely to be very easy to collect. Then he bundles up the rest and sells that batch of cherries to the next sucker who wants to buy junk debt. By selling it in smaller bundles he might actually end up with a profit from selling the bundles as well. So trashman & Co. buys a bundle of cherries and again uses software to pick the cherries over one more time. He makes a profit on collecting the cherries and sells the now half rotten cherries to another sucker. The process goes on and on until the statute of limitations is about to run out or already has and there is nothing left of the cherries but the pits. What's the point? A DEBT COLLECTOR'S LIFE IS NOTHING BUT A BOWL OF CHERRIES?????
The point i was making is collectman tells everyone that if you don't pay a ca they will sue you and get a judgment against you.If that is true than why do ca's sell their acounts to other ca's instead of doing what collectman says they will do.
I never said they will sue you...it's always an option until the SOL runs. It's always something to think about in the back of the debtors mind before choosing to take your advice and never pay them.
Because it is all about economics and return on assets. When a CA sells off some of its debt portfolio, they usually are selling at a discount also (read at a loss). They merely have calculated that the cost of recouping the debt outweighs the probability of payoff. A simple business decision.
