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Discussion in 'Credit Talk' started by Grace, Jun 28, 2001.
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Here is a suggestion, although not really an answer. I have tried it to get my way. And, it worked.
Explain that you have limited resources to take care of bad debt. Your offer is the best you can do, but you want something in return, a deletion of all negative references in your credit reports.
If they cannot help you, you will use your limited resources to pay other debts, those who will offer you deletions. There may not be other debts, but they do not have to know that.
This puts it in a light they can see. If they want anything, they have to do it your way.
Right now, they are playing hardball. Its part of the negotiating game. You can just wait and when they call back, tell them you are sorry, but you just cannot do any better than your previous offer. Sooner or later, they will decide to take it and run.
When I helped my father in law, we negotiated $75,000 of debt down to less than $20,000. Some were easy to deal with, others very hard. Penneys said we're sorry, we will just write off the debt. Sears said pay 100% or we will sue. I called their bluff and they sued. Sears was the largest debtor. If it had not been for them, I would have settled for less than 20% overall.
The point is that you have waited a long time. You can wait longer until they come around. Incidently, it appears you may be settling for more than you need to. But, I don't know your circumstances nor do I know your feelings towards this. Some feel a moral obligation to pay it, some don't.
Simply put, the collector appears to have you over a barrel depending on when you â??Made payments against this debtâ?¦â? If you did so after the initial delinquency date plus the stretch (8/93), then youâ??ve reset both the reporting and SOL restrictions. So the collector knows heâ??s got some options, leverage against you, if these presumptions are accurate.
Now if you havenâ??t made a payment or don't have an offer in writing (sent or memorialized) at any time after August of `93, then the collector is most likely taking a shot; meaning, he/she is testing to see if more money can be obtained. You shouldnâ??t fault them for this, thatâ??s at long last a collectorâ??s function.
In order to more properly address your question, however, please answer the following:
Have you made any payments after August 1993?
Was your settlement offer verbal or submitted to the creditor/agent in writing?
If settlement was offered verbally, did the creditor/agent memorialize this in a writing to you?
Was your offer for a $3,500 lump sum or through payments?
Thanks for the feedback, this appears to be a really good forum.
Anthony, in answer to your questions:
Yes, I've made payments since 1993 - over $5000, however, since falling behind on the account, I've never caught up and the account has been past due and thus delinquent.
My settlement offer was verbal and actually I haven't agreed to $3500, only to $1700, (I asked them IF I could come up with the original debt amount would they report as favorable.)they have come down to $3300 and are sending this in writing to me for accept or make another offer.
The offer settlement will be in a lump sum only, however, the creditor did offer a payment option.
Ooops, too bad you paid it after '93. Lots of us who did such things in the early 90's are now completely off the hook. The fact is these bastards make more money from people like you than anyone else and you'll never get credit for that.
Okay, please bear with the length of this post; how this is handled depends on certain issues that require some explainationâ?¦
Presuming the debt was charged off around August of 1993, the creditor can no longer report the debt because it doesnâ??t comply with the latest FCRA amendment. In fact if no payments have been reported since youâ??ve made them, this debt should be subject to CBR deletion. If Iâ??m correct in this presumption, donâ??t let on to the creditor that youâ??re wise to it. Not just yet.
Before you go back into a negotiating posture with the creditor, obtain a copy of your credit report (most current if you donâ??t already have one). If the last report is as youâ??ve indicated in your initial post (and doesnâ??t show the payments youâ??ve made after August `93), proceed with option one (1). If the payments youâ??ve made have in fact been reported, consider option two (2).
First check to make certain where the debt stands in relation to SOL (Statute of Limitations). You may do this by following the link just above my Sigline. Use the CONTRACT column to determine SOL of the debt, as credit cards ARE governed under contact provisions.
Next calculate the SOL from the date of last payment. If the statute that applies to your state, for example, covers a period within todayâ??s date and the last payment made; then youâ??re within statute. If not then the statutory limit has expired; meaning the creditor cannot litigate (sue you) to recover the debt face value or any portion thereof. This is a good thing.
If the debt is no longer in statute stick to your guns and offer only about $500, max., cash deal all up front. As a proviso instruct the creditor (verbally) that payment is subject a letter from them indicating they will not attempt to report ANYTHING (not even the fact youâ??ve paid a portion). If the collector (or supervisor) refuses the deal, propose the same terms to the collection manager.
With the collections manager, youâ??ll want to expose to facts (if applicable). Mainly that heâ??s got a nothing hand because; 1) the SOL is â??staleâ? (use the term, stale), and 2) he/she can no longer report because the seven (7) year rule has expired (without report after December 30, 1997). Offer the $500 as a good faith effort to resolve the issue, again under the proviso that you obtain a letter indicating the creditor WILL NOT REPORT any matter whatsoever (and use the bolded phrase).
If the collections manager balks, remain confident and business like in voice tonality. Thank him/her for time spent and conclude further dealings, even under a guise that youâ??ll think about his/her counter offer (and there will be one, rest assured). Nonetheless, keep a tight lip about what avenue youâ??ll take next. If asked, state that such information is irrelevant to settlement talks, the deal on the table ($500). Although youâ??ll probably want to conclude all further telephonic dealings after this, unless the manager (or staff) calls you to state a reconsideration of your offer ($500, take it or leave it).
From here dispute the reported item directly to the CRA(s) based on lack of ancillary reporting, and the date of last reported delinquency (February `93). Expressly specify (in your written dispute) that the seven (7) year reporting rule, in compliance with the FCRA 1996 Amendment has expired â?? based on the CRAs own reports! Under the conditions discussed this should cause the item to drop.
Without entering into further negotiations, dispute the CBR hit as in the last section of OPTION ONE. If the item comes back verified (by the creditor) then youâ??ll be best served by taking some of that $1,700 cash, and retaining good counsel (a lawyer specializing in consumer affairs, preferably debt issues). Your angle of attack should be focus on the issue of reporting in opposition to the 1996 FCRA Amendment, even though the creditor may have a legitimate cause for reporting. Irrespective, once your attorney composes a letter warning of possible action, the collections manager is more than likely to back down (put it this way, I would in his/her position and I'm pretty guttsy).
Should you go with this option, however, make certain youâ??re seriously prepared to engage litigation. This can be done in any court of competent jurisdiction. If the collections manager doesnâ??t back down after your lawyerâ??s initial letter, itâ??s probable he/she will after you file suit. But you still must be prepared to go the distance, no matter how unlikely.
All and all, the amount in controversy isnâ??t that much. Cost of defense is likely to run the creditor $5,000 or more, for a Municipal or Federally filed case. So you can see, itâ??s not worth the fight â?? and is better resolved amicably.
Going back to OPTION ONE for a moment, then Iâ??ll shut upâ?¦ The only reason why one would consider offering at least the $500 is cost-effectiveness, in relation to obtaining the creditorâ??s written commitment not to report any info whatsoever. With it, you can dispute directly to the CRAs and have the item removed because the creditor could not technically respond to verification efforts, based on the written commitment not to report or update the account in any fashion.
In other words, if the creditor did respond to a verification request youâ??d technically have them for breach and bad faith. Not to mention deceptive practices if your state provides for mirror provisions to FDCPA. In short, $500 is well worth your putting out.