Personal Finance: What you should know about debt collectors Sacramento Bee
Debt collectors. Next to the dreaded taxman, they're probably the most-feared financial folks around.
And chances are, if you owe money on a delinquent loan, a credit card bill or a medical payment, you've heard from a debt collector. Some work in-house for creditors; some are hired to collect on a company's behalf; others buy up bundles of old debts and try to pursue repayment.
To look at how they work and what you should know, we sat down for a Q&A with Robert Tavelli, former president of the California Association of Collectors Inc. and owner of a private debt collection firm in Santa Rosa.
We've also invited Tavelli to talk Wednesday with sacbee.com readers (see box) during a live online chat. Here's an excerpt of his comments:
Debt collection consistently ranks high on U.S. consumer complaint lists. Last year, the Federal Trade Commission put it No. 2. Why do debt collectors have such a bad reputation?
There's always conflict when you call a consumer and they don't want to pay. Fortunately, there are very few bad actors. But they make big headlines. Unscrupulous debt collectors are those who break rules, who go after debt they shouldn't, who try to sue for debt that's 15 years old. Most debt collectors – about 97 percent – do it right.
Bad Credit Debt Consolidation
www.debtplan.org Bad Credit Debt Consolidation, Consumer Credit Counseling, Debt settlement, Debt Negotiation, and Bankruptcy are subjects which ...
What's the best action for a credit card debt settlement letter?
My husband and I recently purchased a house. Right before our purchase we found out about a delinquent credit card. To make a long story short, it was a credit card that was in my husband's name that he was to use when he was in college that his mom was supposed to be paying for. My husband had no idea that there was a delinquency until we were notified by our lender. The account has been closed since 2002. It states on his credit report that the "account closed at consumers request, charged off account, bad debt; placed for collections; skip." We do not want to bother his Mom about this. After no communication with Discover, for 5 years, we have now received a letter from Northstar Location Services, a collection agency (not from Discover), for a settlement amount which is 40% of the debt. What should we do, contact Discover, deal with the collection agency, or something else? I realize everything needs to be in writing beforehand, but can anyone advise me on this at all?
I will check out your other posts, Studly, thanks...as far as my concern with it, it is mainly because of the recent contact with the collection agency now after so many years. We were still able to get the loan for our house, so I am not really concerned about that part of it. Since it "technically" wasn't our debt, but my mother in law's, the bank didn't really care. Actually the amount was pretty significant, $3000 with an offered settlement of $1200, which is why I'm extremely surprised that we were not contacted before about this. I believe the statute of limitation on credit cards is 3 years in our state. I know they can still take us to court over it but its probably unlikely since the statute of limitations has run out. I just don't want to settle on an amount and still have it show up on our credit history for another 7 years. I think this just may be a last ditch effort by the collection agency to get some money and I just want to make sure we make the right decision.
If it was a charge off that means the company tried to collect and wasn't able to so they wrote it off. This is just probably one last attempt to collect. I'd contact Discover and see if they sent this to the collection agency. 5 years is really too long for them to wait to send it to collections. That just sounds fishy to me. Like a private agency trying to collect, on a creditors charge offs.
Read some of my past answers, as I've addressed this several times. The fact that this debt is now 5 years old could put it over the Statute of Limitations, meaning they can not sue you for this. If the debt is small ($500 or less) they may not mess with it either.
See I was married five years ago and my husband has an ex. well while deployed she wrecked a brand new vehicle with no insurance. in 2003 when I went to purchase my home, I found out there was a repo on his eport. Not gonna ruin my life. i got pen and paper and wrote that to evey one involved and all bureus and her. She did not of course want to assume responsibility for the debt, but no problem, the credi bureaus issued a dispute, the agencies did not respond within the time specified with justification of the debt, and the item was successfully removed.
Thats important because one issue can make the difference in a half percent on a loan. Over thirty years depending on the price of the home, that could mean thousands. Dispue, Dispute, Dispute, or pay, pay and pay.
Hope I helped.
legally can someone try to do a debt settlement without your permission if the credit card is in your name?
the person was able to use the credit card but they were not the primary account holder . they tried to do a debt settlement for the account without my permission. is this legal or did they violate my right to privacy with the bank that holds the credit account. or is the collection agency in violation.
No, one can settle dept in any way or form with out your permission legally.
You see, if they were not the primary account holder they were not legally responsible for the debt in the first place. When the debt consolidation company said "list all debt" they listed that.
No, it is not legal for someone to do debt consolidation with a debt that is yours. The DC company will call the credit card company and the credit card company will tell them that there is no listed account for their client and that should be the end of it.
does anyone know of a nonprofit agency for credit card debt relief? ?
Is there a government program or a good nonprofit that can assist with credit card settlements, consolidated loans, or other debt relief? I have a judgement against me from Capital One for $4200 and it is now at $5,100 because of the 27% interest rate!!! Can I get a loan at a lower rate and have some company settle with them for the $4200? Any suggestions? I am desperate!
Is there a government program or a good nonprofit that can assist with credit card settlements, consolidated loans, or other debt relief? I have a judgement against me from Capital One for $4200 and it is now at $5,100 because of the 27% interest rate!!! Can I get a loan at a lower rate and have some company settle with them for the $4200? Any suggestions? I am desperate! Also, are there such things as government grants that are REAL that I can possibly apply for?
I live in Colorado
desparz1, Debt relief is a common issue many americans are now experiencing. Every legitamate debt relief service providers will consult with you for free. http://www.debtreliefreview.com Try contacting multiple debt relief services and inquire about your questions and listen to thier answers. You should be able to tell which ones are providing shady advice.
Good Luck.
I don't know it they can help you with the judgment or not. But they can negotiate lower interest rates on your other accounts.
You may want to check the statutory interest rate for judgments in your state. It's usually in the 10% or 12% range. Check here for your state: http://www.bcsalliance.com/statute_of_limitations_on_debt.html
Please check out hummingbirdcreditcounseling.org - they are non-profit and approved by the federal bankruptcy court. Although they are primary used for the mandatory bankruptcy education, they can and will not only come up with all the realistic alternatives for your situation, but they will show you the pros and cons of each alternative. You need to not only solve the Capital One problem, but also look at you overall financial picture.
Just use an anonymous name for the first part, and enter your financial information (just amounts, not the account info). Then a report will generate that should be useful.
They do not "handle" the problem for you, but the companies who do that generally charge a great deal of money for something you can do yourself. If you do not have a lot of assets, bankruptcy might be an option. I think it will freeze the judgmentt until the Court reviews your total financial situation.
To get a loan at this point is going to cost you a lot of money.
You need to act quickly if you are working.......they are trying to beat other creditors to the punch, or get some money from you before you go bankrupt.
If you decide to consider bankruptcy, you run into additional issues, such as the attorney will want to be paid up front, before filing. Shop around and select a reputable firm that specializes in bankruptcy but does not advertise a lot.
Best wishes and I hope this helped!
Pay Only a Fraction of What is Owed
Settle Payroll Tax
Remove Penalties and Interest
End Wage Garnishment
http://paydayloan6.wordpress.com/2008/08/20/tax-debt-relief/
Please help with, Credit Card Debt Negation Settlement Or Other options?
Seeing a friend fall deep in debt in no time, I like to help him, get an idea of what his options are - Bankruptcy or Settlement.
He made huge debt (over 50 thousand) to 4 major credit cards while in New Jersey.
Since Feb 2006, he has no job, no nothing ... literally nothing, stopped paying, moved out of state, no contact with creditors or response to court orders. (A lot happened with other cards). Now,
Card-1:
With Original Creditor
Principal 10K.
With penalties 15K
Card-2
Been sold 3 times and with an outside recovery company.
Principal 19K.
With penalties 27K.
QUESTIONS:
We understand Bankruptcy may be best option… its apparent it’s quite easy in his case. BUT please advice on the below.
1) In this scenario, how much these agencies would agree for one time payment?
2) How should we proceed OR should we hire an attorney to do this work for us?
3) Are there any better options such as consolidating?
4) Plz recommend attorneys, consolidators, any thing.
Big Thanks.
Regarding how much the agencies would agree to a one time (reduced amount) payment depends on a few factors - age of the accounts, if they had sued and won (you had mentioned court), etc.
If the accounts are fairly recent and/or they received default judgments on them, they probably will not discount the amount much.
If the accounts are pretty old since he defaulted and there are no judgments, they may work with him on a much lesser amount.
If the accounts are past the collecting SOL with no judgments, they would probably be more inclined to settle for a greatly reduced amount since the only way they could "legally" get paid on the accounts is with his offer to pay. Or, if they are past the collecting SOL and there is no judgments, he has a legal right to send them a SOL letter informing them the account(s) are no longer legally collectible and he has the legal right to not pay.
He needs to order his credit reports to see who/what is reporting.
He also needs to contact the court clerks in "every" county/city he has lived in since his "very first" default and ask if there is anything filed in his name.
If he decides to try to work with them, he should first start by sending validation letters. If/when they properly validate he might send them his offer along with the requests that they consider it as "payment in full" and that they will delete what they have placed on his reports.
If he is considering bankruptcy (BK), he might speak to a BK lawyer.
You/he might also click on my profile and click on the last link I have listed. Do some reading in both the credit forum and the BK forum. (It is a "totally free" site with a great deal of info on it)
He will be able to get an idea of what it takes to try and deal with the creditors or what is involved in filing BK and would probably be able to decide if he would want to file on his own or spend the money to have a lawyer file for him.
Filing BK on ones own is not for everyone. If he reads through the forum and has any doubts about being able to handle it, he should get a lawyer
Is it wise to agree to a settlement on an unpaid credit card balance with a collection agency?
In recent weeks, I've been offered to make a settlement on some of my unpaid credit card balances with a few of the collection agencies that have been calling my house frequently. Personally, I don't think that's a wise decision because it may affect my credit background with all three major credit bureaus. As we all know, collection agencies are known to hound consumers to death when it involves collecting money on bad debts and charged-off accounts from former creditors. I understand credit advisors across the country don't recommend a consumer to "settle" an account with neither a creditor nor a collection agency. I'd rather just face the music and pay the balance on record or if push comes to shove, maybe consider debt consolidation. Please advise what would be the best option to move forward with.
Well, if the collection agency is legitimate, and they really have assumed the collection of the debt, then it might be a good thing to do.
Assume you owe $10,000. If the credit card company "gives up" collecting it from you, they'll often sell the debt to a collection agency for much less - say $3000. So if the collection agency can get you to pay $5000, everybody wins.
Beware the strong-arm tactics employed by the collection agencies, though. They should treat you fairly and courteously, and should offer you a payment schedule.
I just wanted to add a few things.
Whether you pay in full or pay a settled amount, if you do not request deletion upon payment - those notations on your credit report will drop your scores since the account will be updated to reflect the payment and make it "look" like a newer account than it actually is.
Paying in full or paying a settled amount does not guarantee that they will not sell the account after payment (they have been known to sell fully paid accounts to other collectors)
Never make a verbal agreement with a collector.
Do everything in writing.
Never sign your signature on your letters, only print your initials or type your name
Always send everything certified mail return receipt.
You should always request validation before you start talking payment - among other things you need to make sure they have a legal right to collect the debt (yes collectors have been known to try to collect debts that they do not own or have assignment)
After they properly validate, you should send them a letter requesting that the lesser amount paid will be considered "payment in full".
If they sign an agreement to that it would be illegal for them to continue to try to collect or sell the remaining amount.
You should also request that they delete the account they are reporting on your credit reports upon payment.
You should have a signed agreement for both of those points before paying.
How can I stop a lien on my home due to credit card settlement that the collector rejected?
Trying to save a little money but at the same time try to payoff my debt, I offered a bid of $5000 on a $15,876 credit card settlement, which the debt collectors didn't appreciate and said they will settle for $10,450 only after they found out via my credit report that I am co-owner to a home. The credit settlement agency indicated that they like to start around $6900 I ask them to start at $5000 to see what they like to counter bid. My concern is how can I protect my spouse who had nothing to do with my credit problem and was not an authorized user of the credit cards? What would be the best way to resolve this matter, I do not have this money readily available and would have to tap into my retirement again.
Try http://DebtAnswersNow.com
They match you up with debt specialists that offer free debt relief advice. I used them a few months ago with great results.
What to do with a credit collection agency summon?
I decided to go on ahead and fight back on my summon. Now the collection agency is calling me everyday day and night non-stop. I have a debt settlement agency and said they will be the one in contact with my creditors. I decided to go on debt settlement. So please I need your professional advises on this. Thanks a lot. I just want to get rid of all my credit cards.
Answer the phone and give them the debt settlement agency's number. DO NOT give them any other information as they will try.
Advise them not to call your house again. As for calling all day they program those computers to do that. You have to either just not answer the phone or check caller id first. Or take the phone off the hook. This is a ploy that works for them. If they call you day and night many people will eventually send them their last penny so they will go away. don't fall for it.
Credit Card debt settlement, best way??
I recently suffered an illness, lost my job, have several credit card balances, could not keep the payments up, tried to work an arrangement with the credit card companies, but that did not work out either. Now they are all in collections, my credit score is trashed, and short of filing bankruptcy (I do not want to do), I am getting offers to settle for half of the balance. I do not own real estate, but have recently came into some money, not a lot, but if I settle with the collection agencies, I was told that I should request they send me a paid in full as agreed letter first for the negotiated amount, and will help my credit score.
Is there proper way to do this that will eventually help my credit report??
pay em
Credit Card Debt and Collection Agencies?
I'm a 29 year old teacher. I've accumulated about $7900 in credit card debt since I was in college. I cut up my credit cards about three years ago & have been paying on the balances, but card I fell 9 months behind. The minimum payment was over 200 a month and on a teacher's salary, I just could not make it. They'd send me settlement deals, but I didn't even have money to settle. I'd send them periodic payments to try to show them I was at least trying. Now, they've sent my account to a Debt Collection Agency. The collection agency seems to want me to come up with the entire amount or file bankrupcy. Is there any way I can get a big debt collection company to work with me on small payments until I can get ahead? I recently took a part time job to give me extra income to work with. I don't want file bankrupcy @ this age and it is the only marr on my credit report. How can I get them to give me repayment options in writing? They want me to do everything over the phone. Help!
The lame teacher's excuse, is not an excuse. In the state of Montana, a beginning teacher's salary is barely $25,000 a year and with student loans, a rent payment, insurance, etc., at the end of the month I have maybe $20 left over.
Also, I have tried debt consolidation and because I work "$15-$20" in the red each month, they would not take me.
You should see if you can get another credit card with an introductory rate of 0%. You will save so much money if you get out of the interest-payment vicious cycle.
The 0% may be able to give you a check to write to pay off the collection agency ($8000 is possible, but not necessarily likely).
Do yourself a favor and check out this book on Credit arbitrage: http://www.amazon.com/gp/redirect.html?ie=UTF8&location=http%3A%2F%2Fwww.amazon.com%2Fgp%2Fproduct%2F1600200419&tag=thestateofart-20&linkCode=ur2&camp=1789&creative=9325 - good stuff
Good luck!
What's the best way to deal with collection agencies on credit card debt?
I live in Texas.
I have an account in collections that is past 120 days past due. However, at this moment, I have not reached a settlement agreement with the company.
I was informed by the collections agent that only a charge off (and there by making a settlement to pay less than the full amount) would result in the entry being present on my credit report for 7 years.
However, I got my credit report, and it says that the "Estimated date that this item will be removed is: xx/2014." Does this mean that--in terms of damage to my credit--that there would be no additional harm to making a settlement for with the agency?
Also, any additional advice on how you've dealt with credit card debt from your personal experience is greatly appreciated.
The damage was first done to your credit when you were 30 days late on your account. This entry will be removed from your credit report 7 years from the time you were 30 days late and never brought the account current whether you pay it off or not.
Paying the account off the normal way at this point will not increase your credit score. If you have some spare cash and want to settle the account, the best way to do this is make them an offer in writing, and ask them to remove the negative entry from your credit report in exchange for payment. Collection agencies buy debts from creditors for pennies on the dollar, so start with offering 30% of what they are asking for. Not all collection agencies/creditors will agree to do this, but some will.
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