Negotiating With Collection Agents And Paid Deletion
Most debts assigned to collection agencies are debts that do not have any collateral attached to them which means that the creditors might be willing to accept a lump sum payment below the full amount to avoid spending months of collection efforts and expenses.
There are three things to watch for when communicating with debt collection agencies:
1. Get everything writing.
in
Never trust the “word” of a collection agent. If it’s not in writing, you don’t have a deal.
2. Don’t talk to the debt collector if you don’t have cash or a payment proposal. You may accidentally “re-age” an account. You have a 4 year old debt that you negotiated with the collection agency to pay 45% less than the original amount.
You tell them you can make 6 payments but in month 4 you are unable to pay. They will put it back on your credit report with the date of your last payment as the new default date which will have a bigger impact on your credit than a 4 year old debt.
3. Be careful of revealing too much “Loose lips sink ships� Talking too much, you may reveal information that can be used against you if the negotiations fall apart. Also keep in mind that most collection agencies record their calls.
Offering a lump sum payment to creditors There is no general rule on how much you should offer. It could be 70-80%, 50%, 30% OR less depending on the nature of the debt and how old the debt is.
Making the Offer ● Know EXACTLY how much you can afford to pay. ● Tell the collection agency a LOWER AMOUNT as collection agencies tend to try to talk you into paying more. ● Be FIRM on the maximum amount you are willing to pay.
Pay for Deletion Be sure as a condition of your paying that the collector will remove the tradeline completely from your credit report and the original creditor will change their status from charged-off to PAID AS AGREED or simply PAID.
If the debt collector can’t assure you that they can make the original creditor change their status, ask for the name and number of the person with the original creditor who has the authority to make this decision. After obtaining the information, ask the original creditor if once the payment is made, would they be willing to change the status.
Explain in a polite and honest tone the reason of the delinquency in payment. Also, tell them that since you are now in a slightly better position and trying to improve your credit, you would be grateful if they could change the status to PAID or PAID AS AGREED.
Do you have questions about rebuilding your credit? Join our Facebook group!
Feel free to ask your questions within the group!
JOIN OUR OTHER SOCIAL MEDIA COMMUNITIES! NewHorizon.Org
NewHorizon.Org