HELP!! I have an old credit card debt from 4 years back that now has gone to a collection agency (Northland Group). The debt is 3k but Northland will settle the debt for $1600.00. The problem is i'm a full time student that is unemployed and there's no way i could pay $1600.00. I did a little research on the internet and i'm about to send them a letter. Any advise on how I should start negotiating with them? The most i could give them would be $800.
If you got the notice from the CA within the last 30 days, then your first step should be to send a DV letter. You shouldn't talk to them over the phone if at all possible. Avoid any settlement that involves more than one payment. Monthly payments have a way of getting lost or forgotten or misplaced, etc. If this means putting them off while you save up to make that one payment, then do it. Don't pay a little now "to show your goodwill" or "honest intentions." It's likely to cause you more problems than not. Review this site for other suggestions. There are lots of them here but you'll need to figure out which will work best for your particular situation. Good luck!
Pay them $800 and then try to get a student loan at some point in time? That just might not work out too well and might cut your education short if you can't get the funding to complete school. If that happens (and I'm not saying it will, but may be a possibility) then you will wish you had the $800 instead of them. They might take the $800 as a down payment on the $1600 but since they already came down half then another half isn't likely at all. You would be better off by far using informal bankruptcy and paying them nothing at all because then you would get rid of the debt and may have little or no credit report damage either. More and more people are turning to informal bankruptcy these days simply because it costs so much less and is far more effective.
Since there is already a decent offer on the table you can go back and negotiate for the settlement offer payments from 3-6 months if you can afford it. Something like 4 payments of $300. You will need a letter Before any payments are made and payment should be sent certified mail with bank check or / Money order.
The VERY FIRST thing you should do is check the Statue of Limitations (SOL) for your state. Also check the credit card terms to see if there is a Choice of Law provision, and find out the SOL for that state. This debt could be past the SOL, which should change your strategy.
