Settling Debt

[ikonaccord]

What happens when you settle your debt with a collection agency for a smaller amount? Is it better to just pay the whole amount?

[turbo_lude]

I have settled with an agreed price with the collection agency. After you pay off the debt it takes six months to clear.

[Flores]

it doesn't matter. Once your dealing with a collection agency, your credit has ALREADY taken the hit.

Understand, those fuqers buy your debt from the original company at pennies on the dollar. The company you had debt to has already reported you for non-payment.

You can usually get the collection agency to take half or less, depending on how much they paid for the debt. The good news? Once you come to an agreement and pay them off, that debt shows up as PAID, and your done with it.

Obviously, having too many records like this on your credit is a huge red flag to anyone thinking about loaning you money, but sometimes shit happens.

I had one of these about 10 years ago, in Oklahoma, the apartment leasing laws are a bit different than Texas. One thing most apartment leasing firms in texas will do is let you out of your lease if your buying a house, or moving for work. You may have to pay an extra month, but they wont hold you to the entire thing.

Not so in Oklahoma! I bought a house with 6 months to go on a one year lease on an apartment, gave them 30 days notice and they said NOTHING to me except 'ok! no problem!'

Got everything moved out, closed on the new house, and went to write them their last months rent and they tried to hit me with the entire 6 months of the lease at once!

I laughed at em. Told em to send it to collections, and I will make sure they get NOTHING for it. They got all serious and said it would mess up my credit. I laughed at em again. "I told you 45 days ago I was buying a house? Do you REALLY think it's going to bug me your going to hit my credit! By the time I need to worry about credit again, this will be off my record. Are you sure you wont take my check for last months rent? No? Fine. See ya later! here are the keys.

[Narcissistic]

LOLOL

[chris_smith_07]

They normally report it as Paid but not for full amount and some will report it as paid and closed. Either way pay as little as you can and get them to report it as Paid in full.

[axio]

What happens when you settle your debt with a collection agency for a smaller amount? Is it better to just pay the whole amount?If you are settling debt then your credit has already taken the hit. Settle for a lower amount and pay it off asap, the activity will look better than slowly paying it off to creditors. It shows that you care now.

[ikonaccord]

thanks

[chris_smith_07]

Just call the collection agency and say this is what I have to pay. Your credit has already taken the hit as was stated above. If they will not take it then tell them that is all you can do. They can not garnish your wages in the state of Texas. So they can take your offer or leave it. Alot of times they will take it as long as it is reasonsable because if they dont take it more then likely they will not get anything.

[NisAznMonk]

Just watch out for the supposed "fees" they might want to charge you as well. You don't have to pay for it regardless of what they say.

[Din]

would helpmycreditnow.com type places work to improve ur credit if you have had stuff in collections?

[Gunz4Sale]

If they'll let you ask for a pay for delete. You pay them, they delete the collection, win win. And since they(the collection agency) paid less than what they want to collect its a bigger win on their side. When accounts are sold to collection agencies they pay a % of the actual debt, and the original creditor can write it off on their taxes in most cases.

[Prissy]

would helpmycreditnow.com type places work to improve ur credit if you have had stuff in collections?

You don't need them to take care of it. You can do it yourself.

[whiteboy1634]

great to make that claim.... BUT HOW???

[Gunz4Sale]

great to make that claim.... BUT HOW???

Its fairly easy

1. Order a credit report or obtain it for free

2. Find inaccurate information on it and dispute

3. Wait for responses

4. Repeat 2-3 if needed.

[whiteboy1634]

ive done that a few times, and actually something got taken off my report even though i still owed money, then a few months later it popped back on there

[axio]

would helpmycreditnow.com type places work to improve ur credit if you have had stuff in collections?Not really, companies like that take a cut from the settlement from the creditors (usually 1-2%). So it is always in their best interest to settle for higher than you could probably settle for yourself.

[Din]

Not really, companies like that take a cut from the settlement from the creditors (usually 1-2%). So it is always in their best interest to settle for higher than you could probably settle for yourself.

oh i didnt know that they settle for u? I thought that just go around and get stuff deleted from your file. I wouldnt pay somone 200$ tohave them tell me to pay more towards each debt.

[axio]

oh i didnt know that they settle for u? I thought that just go around and get stuff deleted from your file. I wouldnt pay somone 200$ tohave them tell me to pay more towards each debt.
Most "fix your credit" companies will do the following:

Check your credit reports for inaccuracies. Contact creditors and have it fixed.
Help settle "bad" (read as "old", profitable for them) debt.You can do both of those on your own. Pull your credit reports and look through them for anything that shouldn't be there. Contact the number listed on the reports and have it fixed. Contact creditors and ask them to take discounted lump sums.

[LabtopThief_jr.]

i heard those debt helping companies dont do jack, i heard that from dave ramsey's show on AM radio and he's helped a lot of people get out and stay out of debt also all the people i know that signed up with those companies are still in debt.

[extremest]

actually i just got done "settling" when you settle for a certain amount other than your acutual debt in the first place, it still shows as a negative mark on your credit report. any time it goes to a collection agency your screwed. i am in the process of having a company work on my credit. only reason i am doin this is because my friend and his parents all of used them and has helped their score, and remove the negative marks, or hidden them from being able to be pulled up. Also they cant remove at least 60% of your bad marks they refund your whole $400

[the Asshats]

I don't have any collections or bad marks on my credit, but I decided to go to a debt consolidation place. Consumer credit counseling services is what it's called. They are non profit and charge $15 for pulling the credit reports. They are in the process of getting all our credit cards set at a low interest rate with no late fees. Only downside is that I have to close my cards and can't open any new cards until the shit is paid off. (which will be within 9 months) All our shit was on the introductory rate and jumped from 7 to 22%. Really fucked us on the monthly payments so we didn't have a choice.

[axio]

They are in the process of getting all our credit cards set at a low interest rate with no late fees. Only downside is that I have to close my cards and can't open any new cards until the shit is paid off.Wait, so they are having you close out your old cards for new ones? You do realize they are probably getting paid by the company that you'll be opening new cards with, right?

Also, why would you close out your old cards? Once you transfer the balance onto the new ones you can just leave the credit open.

[the Asshats]

Wait, so they are having you close out your old cards for new ones? You do realize they are probably getting paid by the company that you'll be opening new cards with, right?

Also, why would you close out your old cards? Once you transfer the balance onto the new ones you can just leave the credit open.

NO! We aren't getting any new cards. We aren't allowed to lol. We have 3 maxed out credit cards totaling about $6000 and 2 credit cards we put our 3 4wheelers on totaling $18,000. we of course sold the 4wheelers but were too stupid to put the money on the cards. Now all our interest rates are at 22%, asking the monthly payments impossibly high. All they do is close the cards and argue with the companies to lower our interest rates to under 10%. That way, our monthly payments are SUPER low and everything will be paid off within 60 months. But with John deploying in a couple weeks, he'll be making tons of money and everything will be paid off within 9 months. We just did it to get low interest rates and lower monthly payments.

The point is to get completely out of debt, starting over fresh basically. Once we pay off everything except the truck, we can start rebuilding our credit with new cards. (used only for emergencies)

[axio]

NO! We aren't getting any new cards. We aren't allowed to lol. We have 3 maxed out credit cards totaling about $6000 and 2 credit cards we put our 3 4wheelers on totaling $18,000. we of course sold the 4wheelers but were too stupid to put the money on the cards. Now all our interest rates are at 22%, asking the monthly payments impossibly high. All they do is close the cards and argue with the companies to lower our interest rates to under 10%. That way, our monthly payments are SUPER low and everything will be paid off within 60 months. But with John deploying in a couple weeks, he'll be making tons of money and everything will be paid off within 9 months. We just did it to get low interest rates and lower monthly payments.

The point is to get completely out of debt, starting over fresh basically. Once we pay off everything except the truck, we can start rebuilding our credit with new cards. (used only for emergencies)lol, credit counseling agencies all make money from creditors in 2 ways: getting you to agree to pay your debt at a discounted amount, they get a percent of the amount you agree to pay back upfront; and by getting you to open up other lines of credit. Please realize that you never start over fresh. Have you tried getting a bank loan? 30K @ 5 years shouldn't be hard to get if you demonstrate that you have income and ability. Have you tried calling the card companies and asking for lower APRs? You want to avoid having "settled" appear 5 times on your credit history (it will be a bitch to try to open a new credit card at a decent APR). Once or twice is ok, but 5 times is a huge hit. Reason I ask is because it is smarter to rebuild your credit and pay off your debt at the same time.

What is the breakdown on your cards?

Card 1 - Age, Amount, APR
Card 2 - Age, Amount, APR
Card 3 - Age, Amount, APR
Card 4 - Age, Amount, APR
Card 5 - Age, Amount, APR

[the Asshats]

Card 1-3 yrs,2000,10.9%
Card 2-3 1/2 yrs,5000,10.9%
Card 3- 4 yrs,2000,18%
Card 4-3 yrs-10,800,22.9%
Card 5-2 1/2 yrs,$8000,22.9%


We are settling the debt by having them negotiate the credit card companies to lower the rate. I know it's going to suck to have "settled" on our credit, but we really can't afford the monthly payments on john's military salary and my banker salary. It's not an option, especially since we just bought a new truck. We really didn't have a choice. We tried to get a low interest card to roll everything over onto but I could barely get approved for $500. My credit score is in the high 500's and John's is in the mid 600's. No collections or late payments though. Not horrible, but we're so young and have a HIGH debt to income ratio. No one will touch us.

[1999ebpsi]

dam I thought I was deep in debt with 4k lol. I just decided to pull a max school loan for around 8k and pay my debt off it's been lingering around since 2000:gonk:

[Flores]

thats an amazing amount of credit card debt. Hopefully, you have something to show for it?

[Replica]

CCCS is one of the worst things you can do. I used to work for Money Management International CCCS and wow. Your credit score will die. They say it drops so that creditors won't give you more credit, but I think that's just a hopeful side effect of the credit suicide people commit when going CCCS.

Here's how it works. You talk to an initial conselor, that you will never see again, that will take all your bills, a budget and a few other related things. That guy sends it to the customer support office after setting up the account with all the credit card debt. Support sends "proposals" to each of the creditors, hoping they will accept the lowered interest rate and payment rate. If you're past due on any of your accounts, it will CONTINUE to be past due even if you're paying through CCCS until you catch it up.

CCCS will not change your due dates. This doesn't sound like a big deal, but it can be. Lets say you make one payment a month of $300 to CCCS to pay 3 credit cards that all need a $100 a month payment. There will be a due date of whatever they set it up for, lets say the 15th, but your credit card due dates are the 1st, 7th, and 21st. So only one account is getting paid on time. It's not uncommon for creditors to not allow due date changes. So you're reported late for the entire duration of the program.

What sucks even more is when the "proposal" for the low interest rate gets rejected because you can't be late more than twice, but you didn't know until a few months later. The proposal dropped, the interest rate went back up but the negotiated monthly minimum payment doesn't even cover the interest.

Those were tough phone calls. Starting balance of like $15,000 and because of late payment and drop of proposed low interest rate, after 60 months, they still owe $13,000 or so, but they call and say "Im calling to make my last payment! I'm so happy!"

[the Asshats]

thats an amazing amount of credit card debt. Hopefully, you have something to show for it?

Nope....:( Well the high credit cards are Suzuki and Yamaha cards used specifically for buying 4 wheelers and parts. We were young and stupid and got sucked into the whole 7% for 2 years thing. Needless to say, we don't have the 4wheelers but are still paying for them. This was all before I became a banker, of course. Since I've been in banking, we are so much smarter with money. I'm really beginning to second guess this CCCS thing. It's not too late to cancel it, I just dropped the check off last week. I would have 1 late payment on each card, no biggie though. I could just catch it up and be fine. Argh...


Oh and they said the late fees would be waived with the proposal. Fuck me...what have I gotten us into lol.

[drmonkey]

Nope....:( Well the high credit cards are Suzuki and Yamaha cards used specifically for buying 4 wheelers and parts. We were young and stupid and got sucked into the whole 7% for 2 years thing. Needless to say, we don't have the 4wheelers but are still paying for them. This was all before I became a banker, of course. Since I've been in banking, we are so much smarter with money. I'm really beginning to second guess this CCCS thing. It's not too late to cancel it, I just dropped the check off last week. I would have 1 late payment on each card, no biggie though. I could just catch it up and be fine. Argh...


Oh and they said the late fees would be waived with the proposal. Fuck me...what have I gotten us into lol.

I'm pretty much in the same boat, just not as much debt. :gonk:

For the people who settled for a smaller lump sum, how did you go about it? Did you take a loan out to make the sum payment, did they offer you payments on that settlement? I need to get all this stuff handled cause it's just more stress then needed.

[Gooback]

I would never want to be in 30K worth of credit card debt :eh:

Anyways so after you pay off credit cards do you just leave them open? What about department store IE bestbuy, credit cards that are not visa or MC?

[DDANG06]

I would never want to be in 30K worth of credit card debt :eh:

Anyways so after you pay off credit cards do you just leave them open? What about department store IE bestbuy, credit cards that are not visa or MC?

Your supposed to leave them open. The more open lines of credit you have, the higher score you will be. I look at credit reports all day long, and opens lines of credit with a 0 balance is good to have.

[DDANG06]

For the people who settled for a smaller lump sum, how did you go about it? Did you take a loan out to make the sum payment, did they offer you payments on that settlement? I need to get all this stuff handled cause it's just more stress then needed.[/QUOTE]


I work in collections, you can work out any stupulations with the collection agency that has your acct, if you owe 2000.00 and they offer 1000.00 to settle it.. You then you can ask how long will the offer be good for? We of course want all the money within that month so we can hit our personal qutoas. But you can tell them this is what you can afford 500.00 this month and 500.00 the next month. The collector will take that!! its better than nothing to us. MAKE SURE you get everything in writing also. There is some shady ass people in collections that offer you lowball settlements to meet there quotas that arent approved by the client (orignal creditor)..They offer you 250.00 bucks to settle a 2000.00 dollar acct, you pay and dont find out later that that 250.00 was just a payment towards the orginal balance.. GET EVERTHING IN WRITING VIA EMAIL OR HAVE THE OFFER FAXED TO YOU!!

[drmonkey]

I work in collections, you can work out any stupulations with the collection agency that has your acct, if you owe 2000.00 and they offer 1000.00 to settle it.. You then you can ask how long will the offer be good for? We of course want all the money within that month so we can hit our personal qutoas. But you can tell them this is what you can afford 500.00 this month and 500.00 the next month. The collector will take that!! its better than nothing to us. MAKE SURE you get everything in writing also. There is some shady ass people in collections that offer you lowball settlements to meet there quotas that arent approved by the client (orignal creditor)..They offer you 250.00 bucks to settle a 2000.00 dollar acct, you pay and dont find out later that that 250.00 was just a payment towards the orginal balance.. GET EVERTHING IN WRITING VIA EMAIL OR HAVE THE OFFER FAXED TO YOU!!

Ah thanks!

[Nato76]

I settled a $950 Sprint debt for $250 and got it taken off my credit report. It took me four calls to do it but I was not willing to pay unless it was taken off my credit report.

There is no incentive to pay off old debt if it will still show up on your credit report.

[DDANG06]

I settled a $950 Sprint debt for $250 and got it taken off my credit report. It took me four calls to do it but I was not willing to pay unless it was taken off my credit report.

There is no incentive to pay off old debt if it will still show up on your credit report.


Yes you did get it removed from your credit report as one of the terms for you paying the debt.

But it does help your credit score when you pay a debt that is on your credit report. I have people call in all the time that try and refinace their house and get Denied because of a outstanding debt that is on their credit reports.

[Nato76]

DDANG,

Why don't collectors ever mention the option to remove the debt from the credit report to customers? Does it take a lot of work to do this?

Most people don't even know that this can be done and most collectors don't even want to do it. I had to call several times to get a manager to approve this. If it wasn't for some due diligence I would have never known myself.

[drmonkey]

DDANG,

Why don't collectors ever mention the option to remove the debt from the credit report to customers? Does it take a lot of work to do this?

Most people don't even know that this can be done and most collectors don't even want to do it. I had to call several times to get a manager to approve this. If it wasn't for some due diligence I would have never known myself.

How did you eventually get them to remove it? Just kept saying that you would pay as long as they removed it from your credit report?

[DDANG06]

DDANG,

Why don't collectors ever mention the option to remove the debt from the credit report to customers? Does it take a lot of work to do this?

Most people don't even know that this can be done and most collectors don't even want to do it. I had to call several times to get a manager to approve this. If it wasn't for some due diligence I would have never known myself.


Cause its a huge pain in the ass to get that approved by management and the orginal creditor to do something like that. im actually really suprised that they did that for your 250.00 settlement. Your debt was still in house with sprint and not with another agency, otherwise that wouldnt have happened. I had trouble doing that for this debtor that owed $5500.00 he was trying to refinace this apt complex he owned but got denied cause he had this debt out there. But for $5500.00 dollars the management team and the collector really went to bat for this debtor.

[Nato76]

How did you eventually get them to remove it? Just kept saying that you would pay as long as they removed it from your credit report?

Yeah, I kept telling them that I was not going to pay unless I got it in writing that it would be removed. It wasn't a bluff. I really wasn't going to pay unless they did that. I just kept calling until they agreed to it. Maybe I got lucky but it is not on my credit report.