Understanding how to settle a debt with a collection agency is very important. Understanding this process can save you a lot of money and help you to repair your credit to boot.
We know that in these tough times of economic instability, it is becoming increasingly hard to keep up with all your financial obligations. If this is the case with you and you are beginning to fall behind on your payments, call the creditor immediately and attempt to work out a payment plan.
If you are unable to work out a payment plan with the creditor, you account may end up being suspended or closed. In the event this happens, two things will most likely take place - 1) your credit score will be severely damaged and 2) your debt will be passed on to a collection agency. This is when an understanding of negotiation tactics will come in extremely handy.
It is important to know and understand that the collection agency probably purchased your debt at just a few cents on the dollar. Most often, collection agencies purchase debt at 8 cents to 12 cents on the dollar, so a debt of $500 might be purchased for as little as $40 or a debt of $6,000 may be purchased for as little as $480.
Collection agencies make their money by getting you to pay as much as they can squeeze out of you. In light of this, they will attempt to get you to pay the largest amount possible. It may even be that, when they speak to you, they will be unpleasant and possibly even threaten a law suit.
However, legal action represents money, time, and effort on the part of the collection agency and, in light of this, it will normally not follow through with this threat. After purchasing your debt for cents on the dollar, your debt may, in fact, amount to very little to them. You should not, however, ignore any of the collection agency's attempts to contact you. Your goal, as with the collection agency, is to settle this debt and get it behind you.
If you have the funds to offer a lump sum payment, make an offer to the collection agency. Twenty-five percent (25%) of the original amount owed is a good starting point for settlement of the debt in full. Then, wait and see if the collection agency counters your offer. This process may go back and forth a few times but, eventually, you may come to an agreement. Be sure to keep copies of all correspondence to and from the collection agency. Also, make sure that any agreement you come to is in writing.
Try to negotiate a payment plan with the collection agency if you don't have a lump sum to pay. The matter will likely not go to court if the collection agency can see that you are making an attempt.
One thing you want to make sure of is that your debt will be "deleted in its entirety" from your credit history, whether you are paying a lump sum or are going to make payments. If you do not obtain this assurance "in writing" from the credit agency, this black mark may remain on your credit report for up to seven years.
So, in summary, if you decide to settle a debt with a collection agency, go confidently to the collection agency and make an offer. Do not give in to bullying tactics, stay firm, but realize that this is a debt that you owe and the collection agency is in the business of collecting debts. Therefore, also attempt to be fair. Do not in any way ignore letters or phone calls which warn of possible recourse against you. Attempt to obtain the best rate possible. By following the advice in this article, you may be able to come to an agreement with the collection agency and clean up that old debt. - 31377
We know that in these tough times of economic instability, it is becoming increasingly hard to keep up with all your financial obligations. If this is the case with you and you are beginning to fall behind on your payments, call the creditor immediately and attempt to work out a payment plan.
If you are unable to work out a payment plan with the creditor, you account may end up being suspended or closed. In the event this happens, two things will most likely take place - 1) your credit score will be severely damaged and 2) your debt will be passed on to a collection agency. This is when an understanding of negotiation tactics will come in extremely handy.
It is important to know and understand that the collection agency probably purchased your debt at just a few cents on the dollar. Most often, collection agencies purchase debt at 8 cents to 12 cents on the dollar, so a debt of $500 might be purchased for as little as $40 or a debt of $6,000 may be purchased for as little as $480.
Collection agencies make their money by getting you to pay as much as they can squeeze out of you. In light of this, they will attempt to get you to pay the largest amount possible. It may even be that, when they speak to you, they will be unpleasant and possibly even threaten a law suit.
However, legal action represents money, time, and effort on the part of the collection agency and, in light of this, it will normally not follow through with this threat. After purchasing your debt for cents on the dollar, your debt may, in fact, amount to very little to them. You should not, however, ignore any of the collection agency's attempts to contact you. Your goal, as with the collection agency, is to settle this debt and get it behind you.
If you have the funds to offer a lump sum payment, make an offer to the collection agency. Twenty-five percent (25%) of the original amount owed is a good starting point for settlement of the debt in full. Then, wait and see if the collection agency counters your offer. This process may go back and forth a few times but, eventually, you may come to an agreement. Be sure to keep copies of all correspondence to and from the collection agency. Also, make sure that any agreement you come to is in writing.
Try to negotiate a payment plan with the collection agency if you don't have a lump sum to pay. The matter will likely not go to court if the collection agency can see that you are making an attempt.
One thing you want to make sure of is that your debt will be "deleted in its entirety" from your credit history, whether you are paying a lump sum or are going to make payments. If you do not obtain this assurance "in writing" from the credit agency, this black mark may remain on your credit report for up to seven years.
So, in summary, if you decide to settle a debt with a collection agency, go confidently to the collection agency and make an offer. Do not give in to bullying tactics, stay firm, but realize that this is a debt that you owe and the collection agency is in the business of collecting debts. Therefore, also attempt to be fair. Do not in any way ignore letters or phone calls which warn of possible recourse against you. Attempt to obtain the best rate possible. By following the advice in this article, you may be able to come to an agreement with the collection agency and clean up that old debt. - 31377
About the Author:
Free' Page Collection Agency Deletion Guide at www.myncodebt.com. Stop NCO in its Tracks. Fast, Easy, and Free.
