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Question: Offering debt collectors a settlement ?

(Posted by: charmm25 on 2008-09-17 15:44:56)

Ive got some debt collectors on my back and was wondering if anyone knows do the debt agencies buy the debts from the original company or does the company still own my debt, as i was thinking of offering each one 50% of what i owe as a settlement figure but dont know whether to offer the settlement to the debt collectors or company ???

Posted by: not here on 2008-09-17, 17:40:43

The original creditor will sell the debt to a collection agency (receivables management company, etc.). If your debt is $1000.00 (example) they will probably get mere pennies for every dollar. But the debt collector is going after the whole amount. Contact the original creditor first. They'll tell you if they can no longer collect on these debts. They'll refuse to take payment and refer you to the agency they sold it to. But that agency may have sold it. There are lots of unscrupulous collection agencies out there who will try all kinds of fun things to get money. You could offer a settlement amount to the agency but get everything in writing, and put your request in writing. Pay by money order only. Do NOT give them access to your personal bank account. If they agree to the settlement, be sure to get a letter from them stating this debt is settled and closed. Good luck.

Posted by: vanlaere on 2008-09-17, 15:50:11

Debt collectors either buy the debt from the company or are hired from the company to collect on the debt. They will usually take a smaller settlement. It is worth a shot. Just be aware that once you offer a settlement then you are admitting that this debt is yours.

Posted by: mike f on 2008-09-17, 15:58:43

Offer it to the ones who are contacting you.

Posted by: mlpaige317 on 2008-09-17, 16:06:12

If the debt is less than 4 - 7 years old (depending on the state) then you can probably settle for 50% although I would try less to begin with. If the debt is older than that then it may be considered noncollectable and you will not have to pay it back. Of course any amount not paid back is considered income by the IRS and you will probably have to pay tax on it.

Posted by: Slimick on 2008-09-17, 16:25:39

Debt collectors buy the debt from the original creditor and they are entitled to any payment you make. FYI: often, the debt is purchased at a HUGE discount...sometimes as low as five cents on the dollar. Always get written settlement agreements from debt collectors PRIOR to giving them your money. This should state exactly how much is to be paid AND it should state that your account will be settled/ paid in full upon receipt of this amount. After getting this, pay ONLY via USPS money orders....NEVER give them your checking account # for auto debits. If these items are non-revolving items like defaulted cell phone or health club bills, for example, you need to negotiate the removal of these items from your credit report. You can get written Pay for Delete agreements when they agree to delete the item from your credit report upon receipt of the agreed-to amount. Get all terms in writing FIRST prior to paying them....DO NOT accept verbal promises from debt collectors regarding settlements. Once they get your money they will continue collection activity and deny that any settlement agreement was ever made. Without a written agreement you would not be able to challenge them. Defaulted/ charged-off credit cards are another matter. These can stay on your credit report for up to seven years.....paid or unpaid. Paying off charged-off debt will not magically repair your credit rating... Even if you negotiate with the debt collector for the removal from your credit report, the original credit card company will continue to report the charge-off on your credit report.

Posted by: lisa s on 2008-09-17, 16:27:11

To piggy back on what everyone else has said, if you make an offer, have them put it in writing that the amount you offer represents payment in full. Do not pay a dime until you have that in your hand. Also ask about payment for removal from your credit