Settling Collection Accounts

I'd try debt validation first. If that doesn't work, then you can consider settling. For tips on debt validation, look up LizardKing's posts.

 

If you don't receive a response to the validation letter, do you recommend settling with the original creditor or the collection agency?

 

If you don't receive a response to the validation letter, then I would try getting it off your credit reports with the CRAs. You only want to have one derog for this account on your credit report if you have to have any at all. The next stage would then be to try and settle with the original creditor, yes.

Depending on what they think their chances are to collect on this debt at all, they most likely will be willing to settle with you. I have had many readers report sucess with settling. They correctly assume that the creditor figures collecting some of the debt is better than none.

 

An example of how I deal with creditors and collectors alike.

I am dealing with a collection agency over a hospital bill. I send the collection agency a validation letter containing a partial cease and desist clause. The collection agency calls me up on the phon and says (tape recorded on my end) that they do not have to validate the bill, and if I want validation of the debt then I must demand that of the hospital. I demand on the phone that they put that in writing and send it to me. They refuse to do that too. They threaten to sue. At that point I tell them "Well don't just sit there on your dead butt, do something" and slam down the phone. Those were my actual words.

I will immediately send a validation letter to the hospital. I can only conjecture what will happen after that. I will not, however, conjecture about what I will also do about the collection agency.
I will wait until the 30 days is up for them to have responded to my demand for validation with an estoppel letter. 30 days after that I will send them a letter which outlines their violations of law and ask them what they propose to do to make amends for their illegal actions and violations of the law.

Their response must be that they will pay the bill and remove the adverse listings from all public reporting agencies and data bases or I will immediately file suit on them for their violations of the law.

If the hospital violates any law in the process, they will get the same identical treatment and can pay for their illegal actions as well. Just let them send me a letter telling me that they turned it over to a collection agency and no longer have to validate the debt or that I must contact the collection agency for any and all demanded information.

And if they do validate it, they had better do it in the right way or they still broke the law.

Now then, that may sound like a pretty easy process to go through. For some on this board, it would be like falling off a log. But for those who are not thoroughly familiar with all the proper language to use when contacting collectors and creditors and credit bureaus, the exact timing necessary to get them properly trapped and in a losing position, I have a word of advice that you would be wise to follow.

Don't try it unless you are willing to spend several months at a minimum studying all of the material on this board learning how to do it and don't try to go to court and sue them unless and until you spend the time to learn how to do your legal research, properly prepare the legal paperwork and file the case or are willing to hire competent counsel to do it for you.

If you are not willing to do the work in the proper way, then you should just let somebody else who does know and is willing to put in the time and effort to do it for you. And there are always other steps which are left out of posts like this one due to time and other constraints.

 

Here is what I said in the last post. I did state that I was talking about the original creditor, the hospital, but it is the same with any party trying to collect a bill. In otherwords, it was a general outline of how I go about getting rid of bill collectors of all descriptions. Here it is again.

I don't want to sue anybody either. As I have stated many times in the past, I feel quite confident in saying that I can get better relief in the outhouse than I can in the courthouse and far faster.

If they have violated the law, which they almost invariably do sooner or later, then I simply make out what would appear to be a valid court filing absent the appropriate legal headers that would normally appear on a document or complaint filed in court and entitle it "NOTICE OF INTENT TO FILE LEGAL ACTION AGAINST SLEAZEBAG & CO." and ask them if they wish to try to reach an amicable settlement rather than to answer to a judge and jury pertinent questions as to why they broke the law. Each violation that I contend will be clearly stated and the appropriate statutes and relevant case cites for each of my contentions will be outlined and presented to them, point by point. Then I will tell them that if they wish to contest the matter rather than to make offer of amicable settlement would they care to save themselves additional expense by signing the enclosed WAIVER OF SERVICE OF SUMMONS.

Once they receive that, they have always decided that they didn't want to argue about it in a court of law and would rather make and offer of their own for reaching an amicable settlement. I don't even tell them what I would or would not accept as an offer to make amicable settlement.

Let them make the offer. That way they can't come back and say I did all of that just to get out of paying the bill. They make the offer, I either accept or refuse based on what they come up with. Usually I have to go back to them and additionally demand removal of the adverse notations on any and all public records and credit bureau reports and agree to cease and desistt from any and all future collection efforts on the item.

As far as tape recording devices go, you only need a common tape recorder and a Radio Shack telephone recording controller. $29.95 at Radio Shack plus the tape recorder and the hookup wire.

 

If you send a validation letter, most likely they will either

a) ignore it
b) send you something unsuitable as validationn
c) send you real proof.

Just as a poll, how many people actually got good validation back?

Until the collection agency validates the debt, they can't continue to pursue collecting this debt, so it is like sending them a cease and desist letter.

If either a) or b) happens, then you just contact the CRAs and tell them that the collection agency is unable to validate the debt. According to LizardKing, they usually remove the accounts from your credit report. Your next step is to negotiate with the original creditor.

If c) happens, then you would be negotiating with the collection agency, as they would be the ones "legally" handling the debt.

 

Kristi:
I've seen 2 or 3 validation letters get returned that sure would fool the average person into thinking they were valid. One of their major problems is that I am building a paper trail by sending everything CRR. They almost never do it that way so I just go right on with the next step because if they can't prove they sent it, I didn't get it.

I've seen one court case where that was one of the points of contention, but it didn't get proved very well if CRR was a legal necessity for the collection agencies or not because the guy finally gave in and agreed to admit that he might have received it. So who knows for sure what would happen if the defendant stoutly maintained that he built a paper trail and if the other party didn't then they have no proof so without proof their statement is not admissable in a court of law.

Maybe we will find out the truth of the matter as to whether it can be sustained or not. Someday we will either get a judge to rule on the point or someone will find a case where the judge actually did rule on the point.

Only time will tell. In the meantime, if they don't build a paper trail, they don't have a point to argue about.

 

Doddyhead do not settle with out deletion and get in writing before paying. Collection will remain,only difference is it will show"paid" if it does not get deleted. If it's a older collection and is soon to fall off it has lost it's srength. Believe it or not alot of creditors don't go back more than two or three years of your credit history on credit reports and if over three years it's not even seen by the creditor. Most will just review the last 2 years of history for negatives as a general rule. I have been told this repeatedly by one creditor after another.




BK,charge-off(which loses any value as it ages), judgements and defaulted student loans are your main concerns.

 

I would never call,if anything send a certified letter but before that, see how old the acc't is? It may not be worth the effort unless you are looking to purchase a mortgage in the near future. All correnspondences should always be done with certified letters. Things can be misunderstood over the phone and you find your acc't re-aged because they will say agreed to pay. You tell them what you want in return if you pay in full. You control the situation and know your rights.It's been awhile since I had any dealings with collection agent on phone,but last time I had a conversation with one on phone: I let him run his course and then when he says:what are "we" going to do about this: I said: I have no intentions of doing anything because it is being reported still by Original creditor and as long as they are reporting it ,you can't report it anyway because it only can be reported once on each or all three reports.Why do you want to pay it anyway?

 

Disputing will not re-age it but amitting you own the debt and saying you will pay could re-age it. If you pay it and they remove it ,will it make a big difference in your ability to aquire new credit?

 

River:

I really hate to disagree with you, but nothing he says over the phone will re-age the debt.
The law is quite specific about what can or cannot re-age the debt.

I realize that there is currently a lot of discussion and disagreement going on in another thread and that many do not understand the FCRA on this point. Theri confusion is very understandable, but nothing in the law says anything about re-aging the debt by phone or in writing either for that matter. All that is mentioned in the FCRA or FDCPA is that depending upon the age of the debt, the date of last activity is the only thing that determines the age of the debt. Last activity does not include communication about the debt by the debtor.

 

I would concentrate on paying off CA tax lein. Looks like you are doing that. The charge-offs are so "new" that you should let them ride for now.Same with collections.You said you had 4 past acc'ts listed as closed and paid as agree.Car re-deemed repo????U still have car or not?But with 5 payments left,pay it. What I would do is start re-establishing from here out. I would go back to the 4 acc't closed and if you have any retail card in the 4, I would call them back and see if you could re-open acc't without having a credit check(1 less hard enquiry). Only re-open acc'ts that you will use. I would get or re-open gas card.And get another visa or mastercard,which ever one you don't have and go from there.

 

Doodyhead:

First of all, let's have a little laugh by having you (or anyone) click on the last line in green down below.
See if you think that might re-age the debt.

I just found out that I had an error in the link and just now changed it.

What will re-age the debt. Well, as I said just above, from what I read into (or out of) the law is that it is the date of last activity. Personally, I understand that to mean that it is the date when the debt was written or charged off. Others think it is the date one made the last payment.

In any case, it is not going to change because of any action by the debtor with the possible exception of making a payment on the debt.

 

Bill,thanks for the correction. If there is any money applied to the debt ,then it could be re-aged. Is applying money to the debt the only way you can re-age it?