Debt Settlement Letters are How You Seal Your Agreements

Negotiating debt and paying the new agreement requires a settlement letter. In the wacky world of debt collection, debt buying, and credit reporting, paying off a debt you settle without having a documented agreement, is a huge mistake. And one you will regret later on if mistakes with the credit card you thought was settled (other types of debt too), resurfaces in a way where a simple debt settlement letter could show the account was resolved, instead of the nightmare that you may go through without one.

Reaching the point where you have a verbal agreement to settle and pay off a debt for an amount you can afford is exciting, and a relief at the same time. You must be careful not to lose sight of what are still critical concerns before celebrating your success. This debt relief program report will help you focus on crossing the debt settlement finish line with confidence – when your success is documented with a debt settlement letter.

When you are negotiating direct with creditors, your settlements are generally going to be reached verbally first. The verbal agreement will be for a set amount of money either paid all at once, or paid by making several installments over a set period of time, until the settlement agreement is met. It is important that you understand the deal is not done until it is documented and fully funded consistent with the terms and payment timelines laid out in a debt settlement letter.

Verbal communication with creditors and debt collectors are a necessary part of the debt negotiation process. How and when to communicate with others about your debt is covered throughout the CRN online debt relief program. Ongoing communications over the phone with your original creditors and debt collector’s can progress until you have the money you need to settle.

You should not attempt to negotiate an account, or offer a settlement amount, until you have the targeted dollar amount you need to fund an agreement. It makes little sense to start negotiating a settlement amount if you do not have the money to fund an agreement. Just making calls to “feel out the situation”, wastes your time and could hurt your efforts later.

Your targeted settlement amounts will be different from one account to the next. If you are a CRN member you will work with your specialist to set realistic  settlement percentage targets and timelines using real time data about your creditors, debt collectors etc. If you are a debt relief program reader be sure to participate in the comment sections of relevant page topics in order to get feedback about timing and targeting for your debts you are looking to settle. The comment section at the bottom of this page is the perfect place to post questions about a settlement letter you have received.

Negotiating the payoff agreement and reviewing the settlement letter:

Reaching a settlement agreement can take one phone call, or it may take several calls over a period of days, or even weeks. When a deal is struck you know that no deal is a real deal until it is documented, and then paid in accordance with the agreement.

Debt settlement letters with original creditors and debt collectors are typically a standard form that will consist of the following:

  • The creditor and/or debt collectors name.
  • The date the letter was drafted.
  • Your name.
  • Your account number.
  • Outstanding balance owed on the account (this is sometimes missing and is not a deal breaker).
  • Amount that is being agreed to as settlement and satisfaction of the debt (less than the full amount owed).
  • Terms and amounts of payments to be made – if you are settling the account over a period of time – instead of with one lump sum.
  • Date your payments must be received by in order to have met the settlement agreement.
  • The settlement letter must reference that the account being satisfied in full i.e. “settled”, “settlement of this account”, “accepted as settlement in full”, “paid in full”.

The letter will have other general information such as disclosures about settling debt. Creditors and collectors put this information in to cover themselves. The bullet items above are what you want to see in a settlement letter to cover yourself.

Settling with a 3rd party debt collector means you must get the above details IN WRITING, before remitting any payment towards the agreement. If the above bullet items are missing from your settlement letter you should request a different letter be sent to you that meet the above specifications. If you are a CRN member you have access to your specialist who will assist you in reviewing all collection and settlement letters.

Check out this quick video about debt settlement letters:

 

Setting up settlement agreement payment dates without the letter.

Some of the large banks will not release a settlement letter to you until your payment arrangements are set up in their computer system. They will request that you give them specific electronic or ACH payment information over the phone first. Should you agree to this? Yes, in some instances. If you are experiencing a creditor or collection agency holding back sending you a settlement letter, be sure to post about that in the comments below to get feedback about how each one of your creditors deals with this prior to settling, or negotiating your agreement and setting dates for payment. This way you know what to expect beforehand, or can navigate the negotiation and settlement process of a specific account with more confidence.

3 key elements when setting up settlement payments over the phone.

Schedule your first (or only) payment for a future day that gives enough time for the settlement letter to reach you by mail. 10 days or longer would be best.

  1. Make payments on the settlement from your bank account that you set up specifically for saving and funding the agreements. This is covered in the report: Saving up for settlement.
  2. If you do not receive the settlement letter within 72 hours of when your payment is scheduled for processing, you can call and demand the letter be faxed to you, or the funds will not be available in the account.
  3. You should be prepared to walk away from a deal if you do not have documentation in hand before the payment date. As a caution, be certain you don’t have the funds in your set aside account on the date you set up a payment – if you are walking away from a deal.

Providing payment information and setting payment dates in advance of having received a settlement letter is only an option when dealing with original creditors, and in some limited instances, debt collectors working for your original creditor.

Do not release payment information to debt buyers, or debt collectors working for debt buyers, without documentation in hand.

Receiving debt settlement letters via fax:

Technology has provided many conveniences and cost savings when communicating important details that require documentation. Documents can be emailed with the click of a mouse. It may surprise you to learn that banks and collectors do not readily take advantage of technology advancements. You will find that many internal recovery specialists (bank employee debt collectors), and outside debt collectors working for collection companies, are not allowed to email anything to you. One way to work around the delays of getting settlement letters mailed to you is to get them faxed to you.

If you do not have access to a fax already, you can set up a virtual fax service. This would give you a 10 digit fax number that others can send documents to, and you can receive the faxed documents as attachments to an email, or receive an email notice a fax has been sent to you to log in and download, or print.

One of the services CRN members have used to receive their debt settlement letters via fax is eFax.com. The cost of an efax account, or similar virtual fax services, is low. Setting up a way to receive faxed settlement letters is worth the cost when dealing with time sensitive communication and funding of settlement agreements you have made. Getting the settlement letter faxed same day is especially handy if you follow some of the “end of month”, or “end of collection agency contract” strategies that are laid out in the debt relief program.

Working with a debt settlement company who is negotiating and settling for you.

Hiring a debt settlement company or debt negotiator to do all the settling does not remove the need for you to have documentation. Just because someone else is handling the heavy lifting does not mean you should not be concerned about having copies of all settlement letters. Be sure to get a copy of all debts that have been negotiated and funded from any professional you work with as each of your debts are being settled.

With business trends for electronic data storage, and the fact that computer systems can crash, physical documents this important should always be in you possession.

Conclusion:

Negotiating and agreeing on an amount you will settle a debt for is primarily going to be done over the phone. Once you have a verbal agreement it must be followed up with documentation. The settlement letter should meet certain requirements before you remit payment in full, or make a partial payment. If you do not receive a settlement letter, or a letter does not include what is standard information to protect you, it’s okay to walk away from the deal. You can receive settlement letters via fax and mail (sometimes even email). No settlement letter means you don’t have a deal. Keep all settlement letters in a safe place with all of your other important documents.

Post your questions about debt settlement letters and agreements in the comments below for feedback.

If you are new to the CRN site and would like to get comprehensive information about settling debt, you will want to read through the debt settlement section of our free online debt relief program. Get started with: An introduction to debt settlement.

 

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About Michael Bovee

Michael started CRN in 2004 with a mission to provide detailed debt and credit help and advice that encourages and allows people struggling with debt to solve their debt problems just like a pro - but without the high fees.

Comments

  1. Hi, I’m here on the behalf of my sister who had recieved a letter from MCM and they want 708.71 abut the current balance is 1,181.19. The payment due was 9-7-12. They said they have a great new offer for NEW customers and said they purchased YOUR new t-mobile account. They said they’d be able to offer a discount of 40% off the current balance IF WE RECIEVE PAYMENT BY 9-7-12

    “what in it for YOU? Once MCM recieves your payment of $708.71, we will: Notify the credit bureous that the debt is “paid in full. ” “immediatly stop all recovery activity on this account.

    • My question is..how do you know if you really owe them and second if they are a real debt collection agency? I actually went down to the t-mobile place and asked them but i don’t get why its so high..

      • Michael Bovee says:

        Linda – The settlement letter you refer to is a common offer letter from a collection agency. I can assure you MCM (Midland Credit Management) is a real collection agency. They are part of the largest collection outfit in the nation. That letter is dated from last September and not valid anymore, so do not act on it. Your sister will need to call and negotiate the same, or better settlement deal, and get a new settlement letter sent before sending in payment. Your sister can authorize you to speak on her behalf (if she is not up to it), either verbally with you on the phone, or in a letter that can be mailed or faxed in. You would call in to get the fax number to send the authorization letter signed by your sister. Then you could negotiate with MCM and get the settlement letter sent or faxed.

        If you want to make certain Midland Credit Management is legitimately collecting on the Tmobile account, your sister can call in to Tmobile and verify that Midland bought it. Just be aware that it is likely “Midland Funding” that bought it. MCM is part of the Midland brand. See this post for more detail: Midland Funding, MCM, Encore Capital

  2. Hi Michael,

    I’m back with a new issue that I want to consult with you. You’ve been a great help to me in my last problem having been sued due to one of my credit card debts. Your advice and helpful insights encouraged me to face and work on resolving the matter.

    Now, I have one more defaulted credit card that I want to settle. Original creditor is WAMU. Previous collection agencies were Cavalry Portfolio and Central Portfolio Control. Now, JC Christensen and Associates called me up and offered a settlement. How would I know that they are now the legitimate owner of the account. I was asking for a settlement agreement but the agent told me they will send through email. I requested an agreement in writing with signature through mail but told me it would take 30 days. Should I settle for an agreement through email?
    Also, I want to pay them by check but instead the agent wanted me just to provide the routing number of our checking account to facilitate the payment. What do you think is the safest way at the same time will protect my rights in negotiating and settling this account. Thank you very much.

    • Michael Bovee says:

      Joe – A settlement letter with an account like this is a MUST. An email will not cut it. JC Christensen and Associates is a debt collector who settles debts in the normal course of business. They have a settlement letter template they will be using that does not take a month to fill in. You can ask them to fax it to you instead of mailing it. Faxing settlement letters is a normal occurrence (though there are some creditors and collectors that insist on mailing – but it still does not take a month).

      Once you have the settlement agreement in hand, paying the settlement can be done through a check by phone. I understand why you would exercise caution, and if you absolutely prefer to pay by check, stick to your guns and let them know you will send via fedex or UPS and the check will be a money order or certified check. If you do this, I would encourage you to get the certified check issued from your own bank with the amount drafted from your bank account for later tracking and proof of payment ease, should you ever need it. But again, paying via a check by phone method after you have a letter in hand is much more common nowadays and also provides you ready access to proof of timely payment should the need for it arise.

      • Michael,
        Once again, thank you very much for your timely response and informative advice. Can’t thank you enough for all the help you have extended to me. Will definitely follow everything you have told me and keep you updated for the settlement of this account.

        • Michael Bovee says:

          You bet Joe. I look forward to congratulating you with successfully settling all of your debts when you get the settlement letter on this JC Christensen Cavalry account.

  3. Hi Michael,

    Sent you a copy of the settlement agreement from JC Christensen. Kindly confirm if such document is a good one? If you think its good enough, should I opt to pay over the phone for easy payment by giving out my checking account routing number? Should I request them to give me a letter that said account was already paid and settled? Thank you for taking time to answer all my questions, really appreciated it very much.

    • Joe – I reviewed the settlement letter you sent me for the Cavalry account being collected by JC Christensen. It contains what you would want to see, or would need, later if any issues arise. I would not have any problem making the payment over the phone if I were you. I assume you are asking about requesting a different settlement agreement about the account being paid for credit reporting purposes. That is unnecessary. You are paying it. If Cavalry has an entry on your credit report now, pull copies of your credit report in 60 days and be sure that it is showing zero due. If it still shows an amount owed, its an easy enough fix. Just post an update about that and we can go from there.

      That was your last account right? Congrats!!

      • Hi Michael,
        Paid the settlement amount already. Yes this is my last account though the other one is in conditional settlement up until June of 2013 upon satisfaction of full payment. Will definitely follow your advice to check my credit report if this account will zero out. I was told by JC Christensen to call them after April 18, 2013 to follow up the letter on full settlement of the account.

        A million thanks to you for all your help and advices regarding all my debt problems.
        If anything I could help you just email me.

        Thanks again

        • Michael Bovee says:

          Joe – My pleasure. If you are up to it you can always leave a comment on our review page: http://consumerrecoverynetwork.com/debt-relief-system-customer-reviews/

          I created that page years back. I asked members to post what ever they cared to after they completed their goals with us. We then switched to questionnaire/feedback forms and I stopped directing people to the page. The page could use some life… I should probably point more site readers we help (non paying members) to the review page.

  4. I sent out settlement offer letters 30 days ago to the date, 2 of them were delivered and accepted but 1 was left a notice and still has not been delivered but recently sent me a statement saying they don’t understand why I’m refusing to pay this debt (dated later than my settlement letter). What should I do about these that have not responded to my letters? And the one that hasn’t been accepted yet but it was sent out, does that mean I have to start over or the 30 day thing still applies??

    • Michael Bovee says:

      RS – I need to know a little bit more of what you have going on. Who are the debt collection agencies, or creditors, that you sent out settlement offer letters to? Post a comment reply with answers and I will be better able to respond with meaningful feedback.

      • They are all for medical bills from my husband several years ago

        • Michael Bovee says:

          Rs – Sending your own offer letters to settle debt is not how the vast majority of deals get done. Communicating direct with the lender, in this case a service provider, using the phone, is the most productive approach. I want to help you reach your goals of settling the medical debts, but I have many questions. Those questions are best answered on one of our existing pages about medical debt. Here is a good one to post some more details to if you are up to it: http://consumerrecoverynetwork.com/question/medical-bills-collection-agency-settle-make-payments/

          It would be great if you would post more details in a comment on the above linked page.
          How long ago were the debts incurred?
          What state do you live in?
          Were any part of the bills covered by insurance?
          What are the amounts owed, and what is it you stating you are prepared to pay in your settlement offer lenders you are sending?

          You mentioned that you are concerned about what to do after 30 days of sending the settlement letter in your above comment. There is no requirement for anyone to respond to a settlement offer you mail them. You may be referring to something more like a written request that a debt be validated. If so, we can get into that on the other page.

  5. Will a credit card company still be willing to work out a debt settlement AFTER they have filed suit for debt payment? Or are all my options exhausted once they’ve filed suit?

  6. How do I request a settlement with a collage and receive official collage transcripts.
    My daughter was attending Collage of Saint Elizabeth NJ, I went through a divorce and I couldnt afford the collage, school loans were denied and she was asked to leave school.
    My daughter owes the school 15,500 they turned her account to collection agency, collection agency bill is for 19,500.00 after many years of struggles I would like to settle the account with the school and receive the official transcripts. Is this possible?

  7. Hi Micheal,
    I had a Bestbuy Credit card owned by Capitalone which is now in debt collection with IQOR Allied Interstate. My balance owed was 1066. Before reading your website, I agreed to pay them $614 with a down payment of $50 with my debit card. With a balance of $564. After reading your website, I immediately called my debit card and cancelled. Then called Allied and asked for an address to send them a letter so I could get the settlement in writing. The associate advised they don’t have an address to give me and it was unlawful to do so. Then she advised if she gave me the address it would totally void out our previous agreement and i would have to pay the balance of $1016.
    What is my next recourse? I googled the address for Allied it came up an address in Ohio from the BBB website but the associate was calling from New Jersey. Should I send the letter to the address from BBB website? Should I continue to engage the associates when they call back?

    • Michael Bovee says:

      PW – I am at a loss for why a debt collector at Allied Interstate LLC would tell you it is unlawful to give you an address. Whether this is fair to say about Allied Interstate collections or not, when I hear something like this I assume that Allied had no intention of settling fairly with you.

      Allied Interstate LLC is a large debt collector. Settlement letters and written agreements are part of their everyday work flow. I will say that your suggestion that you create and send them a settlement letter is not part of their normal work flow. You do not a settlement letter on your letter head, you want one on theirs, so make them send one of theirs to you via mail and/or fax. Believe me, they can whip one up rapidly. If they refuse to, they never had a legitimate intention of settling with you.

  8. Hi,
    I’m in the process of negotiating a settlement for our young adult daughter. The original creditor was CareCredit. Initial credit granted was $3,500. The original terms were something like 6 or 12 mo’s same as cash. Though, it mattered not, as right out of the gate they told my daughter her first pmt was late and that she lost the introductory apr. She called them when she didn’t receive her first bill and they said she had requested online billing, though she insists she didn’t and can find nowhere in her paperwork where this is stated. She can never resolve the issue with the apr and begins paying the $100 per month with the goal of doubling/tripling pmts and just getting it paid off. Each month she pays the acct on or before the due date online. (I witnessed this!!) Despite paying a few days early or on time, she keeps getting hit with $35 late fees! (A common complaint w/Care Credit all over the net!) Month after month after month. She tries calling for an explanation and to resolve, even asking for full payoff amounts so she can settle but those amounts are ever-changing and not in an insignificant way!! She gets transferred, disconnected , left on hold for 20-3o+ minutes or ends up trying to communicate with reps that she cannot understand and this goes on!! (That complaint, also all over the net!) Other than the occasional venting about what a nightmare they’ve been to deal with she doesn’t tell us (her parents) what has been going on as she feels it’s her responsibility to deal with. After 3 years of payments, the apr continues to rise and there is no change in the balance. As a matter of conversation I recently ask her where she is with this “nightmare” account of hers. She confesses that after her hours were cut significantly at work, she stopped paying. The acct was referred to Portfolio Recovery for collection. Portfolio says she owes $2800(!!) but will settle for $1,800. She explained her payment history but was basically told,”oh well, that’s what you owe.” She takes no further action as she has no money and the acct gets sent on to Hyat Hyat and Landrau Law Firm. She received the first letter from them yesterday. (Despite the letter stating something to the effect “no attorney has reviewed your acct for specifics” I confirm they are in fact a legit law firm licensed to do business in Fla where she resides. I also confirm via her local court records search, as suspected, they have yet to file anything. ) She contacts the firm and authorizes them to speak with me. I called them today and explained the amount is far in excess of what she says she owes based on her own calculations and pmt records. “Oh well, this is the info we have” and they offer to settle for $2,800, then go to $2,400. I told them Portfolio originally offered $1,800 and that essentially… my daughter has a part-time job, no money, no assets and unless she hits the lotto this weekend, her situation will not change in the foreseeable future. We go in circles and their last and final offer to settle is $1,717. I ask him to put it in writing. He tells me he isn’t authorized to offer this reduced amount and that he must get an approval to do so. He tells me, if approved, he will email me the settlement offer. Based on what I’ve read about Hyat Hyat and Landau online, I’m a nervous wreck! Everything is negative, “scammers”, “not to be be trusted” etc etc. So, if you’d be so kind, a few questions… Is it okay for them to email me the settlement offer? (You recommended to someone else that it be faxed.) And because of their reputation online, should I ask for anything above and beyond what a typical settlement letter should include? I’m losing sleep over this… any help is greatly appreciated. Thanks!!

    • M.C. – First, be sure and get some sleep. No part of this is worth that. It may sound simple coming from someone who has been at this type of thing professionally for a long time, but it really is just math. You get them to agree to the math that works for you and your daughter, and they, being debt collectors, determine if that amount that works for you is as much as they think they can get, or are willing to accept.

      A settlement letter sent via email as an attachment is not a problem. It can be printed and saved etc. An agreement to settle in the text of an email is lacking qualities you would want in a written settlement letter if push ever came to shove where you would need it. Fax and mail is the most common way to receive a settlement letter. I have done email attachments.

      Portfolio Recovery Associates has a system with 3rd party debt settlement companies where the verification of a settlement comes in the form of text contained in an email. I do not like the practice and would never accept that for a customer, nor would I encourage someone to accept it in their DIY efforts.

      Hayt Hayt and Landau may indeed need to get approval on the settlement amount from Portfolio Recovery Assoc. But the amount they are sticking to in the settlement is not that drastic a reduction, and Portfolio Recovery approves that type of discount on a fairly regular basis. If it is not approved it will be because they think they can get more.

      Here is my suggestion: If they approve and you can fund the 1700 offer, get the agreement to settle in writing (not text in the message body of an email), and fund it. If they waffle in any way, especially on the written settlement letter, pass on the deal. Reach out to them middle of the month or nearer the 20th and start negotiations anew.

      Yes, Hayt Hayt and Landau does sue for collection. It is likely that Portfolio Recovery Associates have given them authorization to sue if need be. If that occurs, the same amount of money you have available to settle this old Care Credit debt can be used to retain an experienced debt collection defense attorney (even less than 1700). Debt buyers have a tough time winning their claims out in court when you have experienced representation.

      Let me know how things develop in a comment reply. I will offer my feedback and can refer you to helpful resources if need be.

      Get good sleep. One way or another you will get this dealt with, and help your daughter.

      • What you do is invaluable, I’ll sleep tonight, thank you so much!! Just for clarification… I can accept the settlement letter if it comes as an attachment? (This is assuming it has all necessary language.) And regarding going back to them if we can’t get agree now… I guess I was concerned about them immediately filing, possibly unbenownst to her, as there are several stories online where people had complained that they never rec’d a summons but only found a suit had been filed when they learned of a judgement against them.
        Fyi, no the $1,700 is not a problem (our daughter knows that which is why I wish she would’ve come to us sooner) but I started to worry that I had hastily agreed to too much. Thank you for letting me know it wasn’t unreasonable to just pay it! ;)

        • Michael Bovee says:

          M.C. The settlement letter you would get as an attachment to an email will, in all likelihood, be the same letter you would get over the fax or through the mail. It is actually not that common, especially with a law firm, to get the letter attached in an email. It’s an option though.

          The risk of suit if you are unable to agree to the settlement, and get the written agreement, is real, but not the end of the process. If the deal does not get done, check the court every 10 or so days to see if they filed. That way your daughter cannot be caught by surprise like you have read about.

          If paying it in full, you still need the agreement in the form of a letter outlining this. It is the only thing (along with proof of payment) that you should need to confront any mistake if the debt somehow mistakenly ends up in another debt collectors lap (it happens), or to get the credit report updates if PRA fails too (also happens).

          • Thanks so much for the clarification. Hopefully, this gets resolved quickly. I’ll update (or be back for help!) soon.

          • Hi again,
            I received the settlement letter today via an email attachment. Boiler plate language ” Letter shall confirm that we can settle the above referenced file for $1717″ etc etc. The letter is from HHL and it lists Portfolio Recovery as their client but original creditor is shown as “Atlantic Credit & Finance/CareCredit.” CareCredit was the original creditor but my daughter has no idea who Atlantic is? She says the original agreement said CareCredit/GE Capital. From what I could find online, it appears they are another collection agency. My dtr says she’s never heard of them or from them and that she was only contacted by Portfolio then HHL. Any idea why they’d be listed? And do I need to be concerned that now they’ll show up on her credit report as a collection acct? Any help/info is greatly appreciated. Thanks!

            • Michael Bovee says:

              M.C. – Atlantic Credit and Finance is indeed a debt collector/debt buyer. They may have purchased the rights to the CareCredit debt followed by PRA, or some variation of legal rights to the debt occurred along the way to resolving it now. Your settlement letter may just be reflecting that chain.

              Not knowing what appears on her credit report regarding this account, I cannot really offer meaningful feedback about Atlantic Credit showing up later. You could get a copy of her 3 credit report and cross reference all entries and inquires regarding this account. If ACF is not on there now, I doubt they will show up later.

              • At this point she has only ordered one copy of her credit report and Atlantic is not showing on it. Oddly enough, neither is the original Care Credit account, only the Portfolio collection acct. Though I realize Care Credit may be showing on the other two bureaus reports. I thought we’d give it 45 days or so, then order all three, see what’s on them and go from there. Thanks again!!

  9. Oh…. one more thing. I asked if they’d do “pay for delete.” He claimed he didn’t have the ability as HHL didn’t do any reporting to the credit bureaus-which does make sense-but couldn’t he ask Portfolio to include that as part of the settlement? Otherwise, her credit is damaged for the next several years regardless with both the original creditor and Portfolio showing derogatory info, yet I’m still settling it for an awfully high amount. (Though I feel compelled to do so as based on what I’ve read HHL will go for a judgement.)

    • Michael Bovee says:

      Hayt Hayt and Landau does not do the reporting, and they will not get Portfolio Recovery to agree to any reporting other than updating the account as paid and a zero balance showing (which they have to do anyway). Her credit will bounce back quicker than you may think. Especially by taking smart steps to improve and restore credit deliberately.

      • Hi Michael,
        Just a quick follow up to let you know we received the acct settled/zero balance letter this week from Hyat, Hyat & Landau and all is well. For what it’s worth, my experience was that they were fine to deal with, professional, respectful etc. Not what I ‘d expected based on what I ‘d read online prior to reaching out to them. Thank you for your help!

        • Michael Bovee says:

          MC – Thank YOU for posting the update. It is also good to hear the experience you had with Hyat-Hyat-Landau was amicable. There are certainly topical debt collection websites and articles full of hyperbole. Many with a tendency to over complicate what is a relatively straight forward process. Out of many thousands of conversations with a debt collector, I have only ever hung up from one and thought to myself “I would have preferred to have gone my whole life without that conversation”.

          • You’re welcome!!! If you don’t mind, another quick question?! I was thinking I should have my daughter apply for a new credit card with the intention of rebuilding her now damaged credit. My thoughts were that she wouldn’t be turned down as I’d co-sign (my score is 801, we have zero debt, we own both our homes and vehicles-no mortgages, no loans). Is that a good idea? (Yes, she can be trusted to not take advantage!) Fyi, she has no debt either, no car loan, no mtg. Her only other account besides CareCredit is a Discover card which she’s had for approx 6 years. It presently has a 0 balance and was always paid on time.

            • Michael Bovee says:

              MC – Either as an alternative, or in addition to a new account, consider adding her as an authorized user to one (or two) of your existing and longest established credit cards.

              Do you both bank at the same place?

              • No, we don’t use the same bank and that is a GREAT idea, though I only have one major credit card thru USAA and I only use that once a year for travel and then pay it in full. Would that still help her? It does have a high credit line and I’ve had it for years.

                • Michael Bovee says:

                  The limit and length of time established for the one account will be good. Adding an account of her own will accent that. Diversity of credit after establishing revolving accounts would be next (installment loan, auto loan), but when she has stable income.

                  She may not need you to cosign for a new revolving account. I like http://www.credit.com/credit-cards/ as a matching tool for accounts that are more likely to be approved for someone on every rung of the credit ladder.

                  I would also encourage you to speak with USAA about some of their credit products, as there are some good ones their for her too.

                  • Thank you for the link! Yes, USAA has a secured card that may be a good option if necessary. It just occurred to me that I failed to mention that she is now married. Is that a reason to not add her to my account? Or to not co-sign if necessary? Fyi, they have no joint credit and he has no debt either. Other than her CareCredit acct, they’ve been doing (and believe in) “pay as we go” which is a good thing. In fact, she only has the Discover card because it was offered pre-approved when she was all of 18-19 years old, so it seemed like a good idea to accept it to establish credit. (Scary, she was sent multiple pre- approved offers back then as a student with no income!) Regarding the Discover, it generally has a zero balance as she doesn’t really use it. Maybe once/ twice a year she’ll put some school fees on it but then pay it off in 60 days or so. Would more activity on the card help her rebuild faster?

                    • Michael Bovee says:

                      MC – Married status would not change the perspective of building an individual credit profile.

                      Here is how I see it:

                      Has one derogatory collection account that has now been resolved. Has one positive Discover card trade line. Get set up as an authorized user on your USAA, wait 3 months after that shows up on her credit. Apply for an unsecured card on her own using a matching tool like linked above. Within the next 6 to 12 months find a meaningful way to establish an installment loan trade line (car, pop up camper trailer if your into that, etc), and here is where you would be helpful as a cosigner if needed.

                      It sounds like your son in law also needs to establish credit. He can start off using a matching tool like through credit.com, or apply where he currently banks. If income is steady, they could apply for an installment loan together in the next 6 to 12 months without a cosigner (though they may get a better interest rate with one).

                      More activity on the Discover card will not necessarily help boost a credit score or profile, but buying something with the card once a month that you were going to spend money on anyway (lunch, tank of gas, bag of groceries etc) instead of using cash, and then paying the bill off every month is a good safe method to show consistent credit activity.

  10. A lawsuit has been filed against me from the attorneys at Midland Funding.
    I have negotiated a payout prior to any court appearances. They will accept a check by phone in which they take 45 days to send me a receipt of payment or they will accept my debit card in which I will receive a receipt within 3 days. I would like to get a receipt promptly, but does this matter since I will have the settlement letter with the payout price and a bank statement showing that release of funds?

    • Michael Bovee says:

      SV – A receipt for payment after it is received and processed is nice, but in my experience not necessary. Your reason for wanting a receipt are met when you have a settlement agreement in writing before making the payment, where the settlement letter clearly outlines what will be paid and by what date, either in one payment, or over several months of payments. You keep that letter and your record of payments in a safe place. Your bank statements will act as your receipt should there come a time you need to show proof of payment if something comes up down the road.

      • Thank you. Your site is invaluable!
        Also, they claim the dismissal of the case can take up to 45 days depending on how busy the court is with paperwork. Even though I will be settling this with a one time payment, do I need to file anything with the court as far as a response to the summons or can I watch and wait as long as I have made my payment?

        • Michael Bovee says:

          SV – It really should not take 45 days to file a voluntary dismissal with the court based on how busy the courts are. Docs get filed every day in court houses, busy or not. What does take a little time is for funds to clear and for the law firm to calendar work. It is also fairly common to tell you “as much as” 45 days, but have it be completed in a matter of a couple weeks.

          Watch the court docket and make sure they followed through within the 45 days, if not, post an update and lets take it from there. It will be simple to prod the finalization if necessary, but no need to go into that, unless it becomes necessary (and I don’t think it will).

  11. My wife owed about $10,000 in credit card debt and hired a debt consolidation company to negotiate a pay off for each of her accounts (about 5 cards). The monthly payment plan was over a two year time period. They stated that once the agreed payments were paid in full that all accounts would be settled. They told us that if we received any bills in the mail from the CC companies to fax the statements to them. Once the account was paid in full, they told us that all the cards debts were paid off and closed except for one (which had the most money owed on it from the start). Because of penalties and interest accruing over the two years, the debt now for this one account was over $14,000 and we were sued directly by the credit card company and had to negotiate another settlement independently with them which took another 9 months to pay off. When we tried to contact the debt consolidation company that originally should have been negotiating this for us we found out they had laid off a bunch of people including the person handling my wife’s account and had moved, yet I think they are still in business. Early on, they also sold our debt consolidation account to another company (which was almost as if the representative we first had the agreement with took the account with her when she changed jobs). Since we paid a fee for them to help us thru this process and they neglected to settle all the accounts, is there anything we can do about this? We kept all the paperwork and emails thru this whole process. Thanks.

    • Michael Bovee says:

      JM – If I understand your comment correctly, you paid for a settlement service on the one larger account that they did not resolve for you. Is there a part of your agreement with the settlement firm that speaks to how the fees would be considered earned? Were your fees being paid in advance, or were fees earned once each debt was resolved by the company?

      What is the name of the debt consolidation company you used?

      I should ask if you have copies of all settlement letters and payment agreements for the accounts the company did complete for you?

      • Micheal,
        My wife paid a fee every month (instalments) to the debt consolidation company to settle a number of CC accounts, but the biggest one wasn’t settled at the start and it grew as time went on as they were working on the other accounts. Yes, we have settlement letters for all the accounts that were resolved. Started with Simon & Bocksch which sold it off to Lloyd Ward & Associates. The first agreement may have even been with another company when it started out prior to S&B.

        • Michael Bovee says:

          JM – Your original agreement with the settlement company should outline what options you have with accounts not settled. I know the two companies you mentioned. Both charged fees in advance of service. It may be tough to get any money returned to you from the one still open. Have you requested the fees for the account you settled on your own be returned to you?

  12. My wife has Dillars as a creditor. We initiated a settlement request with them and they accepted an offer. I have dealt with a few creditors before and thought it odd because they will not send a letter until after pmt is made. My wife has spoken with a Supervisor as well and they all confirm that they dont offer settlement letters as document proof until pmt is applied. I advised my wife we would hold off payment until more info was gathered. Do you have any info regarding this situation?

    • Michael Bovee says:

      Aaron – No settlement letter or written agreement means you have not reached a settlement. There are times where you can set up a future payment date, say 10 to 14 days out, with the expectation that you will have the settlement letter in hand to review prior to the payment pull date. This method for getting the letter kicked loose is more likely with an original creditor, and never something to entertain if you are dealing with an outside debt collection agency.

      Are you speaking directly with Dillards, or a debt collector?

      • Sorry for the delay. It turns out my wife has been speaking with a collection agency.

        • Michael Bovee says:

          No documented agreement about the terms of the settlement means no payment. There are very limited exceptions to this rule. What is the name of the collection agency?

        • The most recent communications came from my wife speaking with Dillards directly confirming the same thing about policy. They assured her of a settlement letter 7-10 days after payment

          • Michael Bovee says:

            A collection agencies assurances do not go far. If I understand your comment correctly, Dillard’s collection department assured a letter of satisfaction would be released after payment as well, and it may well be, but there are enough instances of settlements not going according to plan that I caution against making payments without documentation.

            An alternative would be to record the deal and agreement for documentation over the phone with both the agency and Dillard’s. Letting them know you are doing so as a result of their policy to not release the terms in writing.

            I am asking for the name of the collection agency in the event I recognize the agency as one that plays fast and loose.

  13. Michael says:

    Michael
    After rejecting my settlement offer, I finally arrived at an agreement for payment with the assigned collection agency. I verbally spelled out the terms of the contract, which were acceptable to them; however when I asked them to send me confirmation of the pay plan, she said no formal written agreement would be forthcoming and that I just send the money and she would send an email once my payment was received. Michael, my question is, are the Collection companies required to acknowledge Payment arrangements in
    writing (Contract) or else what protections do I have. The balance amount has changed 2x. I don’t trust them. Thanks M.

    • Michael Bovee says:

      Michael – debt collectors and collection agencies are not required to send a written settlement letter or agreement in most instances. Your protection is that you do not agree to, or make a settlement payment, until you have it documented (there are limited exceptions when dealing with your original creditor). Who is the assigned collection agency you are dealing with?

  14. Lorlina says:

    Michael, I received auto-Express letter from Dynamic Values Nationwide agency in San Marino, CA, with the bold letters: Stated: Court Case Notice. Had two phone calls, debt collectors told me to settle my account which they bought from the original company. He say’s was $4,000 but if you want to settle for less its only $1,020. Told him to send me an Itemized of the original bill and he says if I send that to you it would be $2,000 plus. What should I do need your help. Please let me know. Thanks! LA

    • Michael Bovee says:

      Lorlina – If you want to settle with Dynamic Values Nationwide, asking for an outline of all charges is more like requesting debt validation than for them to send you a settlement letter. Do you recognize the original creditor and the debt as your own?

  15. I have an outstanding debt with Continental Finance who sold this accout to a buyer by the name of Mainstreet Acquisition Corp. The original amount was for $789.51, but since then they are adding interest and late fees, so the bill is now $1,438.38. Received a letter from AmSher Collection Services, Inc. who demands the full amount over the phone now, with a $9.00 charge for the payment. I am trying to negogiate a settlement, but they refuse to put anything in writing until I give them my account information. Today, they called and stated “That if I wanted a settlement letter to be emailed to me, I would have to email my request to the Director of Operations because of FDCPA rules? Do I have it emailed and take it for the words written or do I write one myself and send it registered mail?

    • Michael Bovee says:

      Laurie – When did you last make a payment to Continental Finance?

      Sending a letter outlining the terms of a settlement agreement is standard. Any debt collection agency in business more than a week is used to this. Dealing with a collection agency like this means getting it in writing, and not emailed. Sending in an email request for a settlement letter to the operations manager is just weird. I do not know if you said something in your conversation that put the debt collector on his/her heals, and they just did not know how to handle it, or if they are a new collector just covering themselves, but it is odd.

      If I were you, and I am serious, I would email the director of operations a link to this post and nothing else. If they want to get paid they should release the letter. I would not budge from getting the letter from them first. Especially given the behavior you outlined.

      • I had never made a payment to Continental Finance. They closed this account and sold my account to a debt buyer by the name of Mainstreet Acquisition Corp on February 2009. I made one payment to Mainstreet in 2011 and could not make any more payments. Now comes AmSher which was given the account to collect on April 21, 2013. AmSher began with calling my home number asking me my name, then repeating the same request without wanting to verify themselves. I only verified myself once and then demanded to know who they were and what company they were calling from. When I continued asking them what this was concerning after verifying myself once, they told me that they were following the rules of FDCPA and therefore were allowed to ask me to verify my name again and birthdate before they verified themselves. Being tired of this, I began recording the conversation and it ticked them off. Also, Mainstreet Acquisition Corp is continuing to add $24.00 in interest unless I set up payments over the phone because they are more secure, but also have a $9.00 charge per payment. They also got upset when I told them I wasn’t going to set up a payment this way because they seemed to be changing the rules as they went along. Got a call from them today saying that they were willing to send me a debt settlement letter in writing through fax and/or email, but I had to email the Operations Manager because they were so called being forced to follow the FDCPA because I had to give him permission in writing because they send out legal debt settlement letters and they had to follow the law. I did some research on FDCPA and I could not find anything regarding any of the issues described here except what they could and could not do. Any help would be appreciated

  16. Michael Bovee says:

    Laurie – Given the additional info you have shared I do think you put them on their heels a bit. That is not your problem though.

    Receiving the settlement letter by fax is completely fine. I still do not get why they are requesting you email the operations manager. It is silly. But it could be because of how the interactions have progressed thus far. Most people calling debt collectors, or picking up calls from collection agencies, do not experience multiple references to the FDCPA.

    This whole thing has me curious. If you are up to it, once you receive the settlement letter, I would like to review it with you over the phone. Post a comment update when you have the agreement and I will email you at the address you use to post here.

    • I just received the settlement letter, but it sure is not what I was expecting.

      • Michael Bovee says:

        Laurie – It was good to talk with you in review of the settlement letter. Please keep the comment string updated with any new developments.

        • Well I should have listened to my inner voice that said stop…..something doesn’t sound right. As per our discussion, I did call Main Street Acquistion and they did sell the account to AmSher, but were completely unaware of any settlement that was reached between Jason Borkovec – the so called Director of Operations, which is a load of crap. I found out that the only reason I had to email this character was because they – AmSher stated “that their attorneys had to look over things and put it in writing.” Also during this phone call with Main Street, “I was told that I had to request in writing who was charging me the continued interest and at what rate.” I was refused this information over the phone. After this huge cluster skunk, I try and pay the settlement with AmSher only to be told by the one operator that the amount will not be satisfied nor will it be reported as settled. I explained that I emailed the Director of Operations my request and that it was accepted, but I guess they employ improperly trained staff. And yes, I put them back on their heals because I was trying to do what I agreed to, but I guess email correspondence, even after the attorneys look at it don’t mean a hill of beans. Not sure where to go from here?

          • Michael Bovee says:

            Did Main Street Acquisitions confirm they SOLD the debt to AmSher Collection Services, or was the debt simply assigned to AmSher?

            Based on what you have shared, and our discussions on the phone, AmSher cannot be trusted to tie a shoe. No documented agreement for settling means no payment. Period.

            I would like to compile som

            • My account with Mainstreet Acquisition was assigned to AmSher to collect. Since AmSher has continued the phone calls where I have to say my name twice, then my SS #, then my DOB, then my address before they state who they are, I find them more than unable to tie a shoe. Since I was within the 30 day period since receiving the letter and since they claim to be following the FDCPA Rules on a constant basis, I sent a verification letter which they deny receiving. No surprise there to say the least. Also they insisted on going through the stupid Director of Operations regarding such a letter. So since they have chosen this path, and through my investigation I have found no rules regarding this concept through the FDCPA, I emailed this Director the letter that they claim to have never gotten. Since doing this, I have heard nothing from them. I have it amazing that these collection companies can continually call you and demand you verify your information before they verify who they are and what company they are calling from.

              • Ok this is getting so frustrating. Called Mainstreet Acquisition to get more information, only to be given to Jason Borkovec, the Director of Operations at AmSher. Needless to say, his nasty tone and his explanation of the interest being charged, “I needed to figure that out,” and which was commencing since February 2009, was surprising especially coming from a collection agency. Even if I did try and make payments on this, after my intial settlement was not accepted, would only cause the amount of the bill to rise. Do I attempt to make payments and only pay what I owe, or is there something else I can do? So beyond frustrated. This is the only company I seem to be having an issue with.

                Also, I’m sorry about the delay in anwering.

                • Michael Bovee says:

                  Laurie, Your entire experience with AmSher collections is just odd. Most collection accounts and settlements can be done by each person. There are instances where having someone else step in is worth it. This may be one of those cases. Are you open to having someone else handle this for you?

                  • I agree that my experience with this company is very odd. I have been able to work out payments and settlements on my own, but this company is difficult to work with. I would be willing to have someone else handle this, but the only way this will happen if it goes through the Director of Operations. It is my understanding that it had to be done this way so the company attorneys can look and respond to all requests. But, as of this date, AmSher still has not responded to my debt validation letter and I’m still trying to figure out at what percentage they are charging. Thank you in advance.

                    • Hi Laurie. I also had the misfortune of speaking with Jason Borkovec, “Director of Operations.” This guy was the most obnoxious, idiotic, ignorant person that I’ve ever had the displeasure of speaking with. All I wanted was a receipt of the payments that I had made to them..I was told by Mr. Director that he couldn’t provide me with that unless he consulted with the company’s attorney and that I should consult my bank statements. Huh? Amsher is probably the most unprofessional company I’ve ever dealt with. Employees come off as being untrained and inept And they never return phone calls.

                      If you can Laurie please see if you can deal with Mainstream directly and have them place you with another agency. That’s what they did for me. And I made sure to let them know about Mr. Director’s unprofessionalism. You should do the same. Good luck to you.

                    • OMG, I’m in a pickle now. Tried to talk with Mainstreet Acquisition but got no where of course. Now they have sent me to Frontier Financial Group who is 100 times worse than Amsher. They refuse to say who they are again until you spill all of your information…such as, ss#, dob, address and the like. They are now demanding a payment through my checking account and refuse to take payments through the mail with a certified bank check? Also, they are continually saying that if I don’t pay I will be sued! I’m current enrolled with CareOne and have sent out all the proposals….any help would be appreciated.
                      Thank you!

  17. Natalia says:

    Hi,
    Im here because i just found out that i have some medical accounts unpaid showing on my credit report. I recently contacted this company “Online Collections” onlinecollections.com to try to settle this account. First of all they didnt even have an account for me they coulnt find me by my social security number. So they searched by my name. Then they told me that my balance was $259 but that they could settle this account for $200. I asked the manager that i spoke to if i could get a settlement letter first and he said no. Till this day i dont have an account number with them i have NEVER received a bill from them or anything. So my question is can i trust these people and send them a payment? and wait for that letter afterwards?

    • Michael Bovee says:

      Natalia – In a word – no. Without a written letter from them, along with a record from your side showing proof you paid according to the terms of that letter, you could find yourself stuck later. The settlement agreement and proof of payment will allow you to quickly resolve any later collection attempts, and also give you what you need to get any credit reporting corrected if need be. Without a letter you face an uphill and frustrating battle should something occur later on by mistake, or lack of follow through on a the collection agency side.

  18. Hi Michael,

    Thank you for your informative website. I will definitely review. We have an account that is going on 90 days late through Carecredit. Still calling the number on the Care Credit they offered us a settlement of 900.00 on current 2682.00 and want us to set up a payment through our bank account post dated June 14th. They stated that they could only mail the letter of settlement after talking to them on the phone several times, the latest time for 2 hours.
    Our second care credit account we are trying to settle is a care credit account through Allied Interstate. They seem to be offering the same type of agreement…is this safe?
    Last accounts are through Chase but we haven’t started calling them yet. Any advice for Chase bank?
    We are in Michigan and my husband lost his job in 2011, with no unemployment (he has been working small jobs that pay 1/4 of what he was making and are temporary, with no end in sight)…so we are trying to cut our losses in lieu of having to declare bankruptcy, as we are at the end of our financial limit.

    Thank you for your time and knowledge, this is a valuable resource for consumers.

    • Michael Bovee says:

      Kathy – Getting the settlement mailed to you should not be a problem if the payment is set up that far in advance. You would look to get the agreement in the mail prior to the payment pull date. If the letter does not show up, you do not put money in the account a day or two before the payment draft date. Check out this report on how to pay your settlement.

      Settling with Allied Interstate LLC is pretty standard stuff. They do typically send a settlement letter, but depending on who they are collecting for (Care Credit/GE Capital in this case), they will have different ways for how they send it out. Following the set aside account guide I linked to above is much more than simply suggestive when dealing with thrid party debt collectors, debt buyers, and collection attorneys.

      Check out this page about how to settle with Chase. After you review that information post in the comment section on that page with questions for those credit cards. Be sure to share what the balances are with Chase when commenting. It could make a difference in the feedback I have to share.

      • Hi Michael,

        Thank you for your advice. I (finally) finished the settlements through Care Credit and received the letters without difficulties (and set up a separate bank account). So that is going well.
        I am about to tackle Chase.
        I very much have appreciated and used all of this information.

        Kathy

        • Michael Bovee says:

          Awesome Kathy! Thanks for posting updates. I like to know that people are succeeding with their goals and efforts. A larger benefit from you and others keeping these pages updated is that other readers can take a measure of confidence in their own decisions, even if they do not participate in the comments (which are most readers).

          • Yes, good. I settled with three payments for both of the Care Credit accounts. The settlements were pretty generous, however the fees and interest on those accounts had more than doubled the original amounts, so it kind of balances that out. We’ve been setting aside money to contribute to the settlement offers, as well as receiving help from mother-in-law (with good fortune). I read your website advice thoroughly so I knew what they were talking about and what to discuss at every step. I’ll let you know how it goes with Chase. It is a psychologically difficult thing, but it feels good to complete (and not to declare bankruptcy too–of course, we’re fortunate to have the help from MIL). Thanks again!

  19. I had 3335.00 in a credit card debt to First Bank,,they sold or turned the debt over to CACH, LLC. Sterling Atlantic Law contacted me about the debt and said if I agreed to a settlement of 1,500 they would forgive the debt..I never received a settlement letter in the mail..they said there was no “settlement” until the debt was paid..I agreed to pay 1200 on 5/31 and 300 on 6/14. On 5/31 I couldnt make the payment (due to surgery) and asked that the payment date be switched out two weeks to 1200 on 6/14 and they said they would have to increase the final payment to 634.00 due on 6/28…I paid the 1200. on 6/14…still no settlement letter indicating anything..I called and asked them about it and they said they dont send out settlement letters until the debt is paid in full..I asked them what does “in full mean” because I have nothing in writing as to what we verbally agreed on. Please help me!! I dont know if I should make the final payment on 6/28 when I have nothing in writing

    • and they say that they are not lawyers,,,when I asked for a settlement letter,,they said “the lawyers dont send them out until the debt is paid off and I have to call and request that letter”.

      • Michael Bovee says:

        Amy – Unfortunately, I am skeptical of how this will turn out for you without a written agreement to rely on. I have seen too much of what has occurred with you – after the fact – to think otherwise.

        You may want to call and speak with the same rep and record all that you discuss. If this results in them trying to continue to collect, you will want to have something tangible to fall back on that represents the nature of your negotiations. You will be able to escalate their acting in bad faith if need be, but will want something to substantiate your position.

        Please post any update with your scenario. I can assist you with some paths to resolution if it comes to that. Let’s hope it doesn’t.

  20. Hi,
    I’m trying to negotiate a settlement with Central Finl Control. They’ve agreed to settle a $1580 for $855. They refuse to send me a settlement letter beforehand. They say I can request one after they’ve received my payment. Now they say my payment is due today, June 27, otherwise the offer is rescinded. I also said I would send them a certified check because I was not going to give them my account info. They said I would have to overnight the check to them.
    Should I walk away from this and revisit at another time. I’m very leery of giving them my money without a letter, especially after reading the above question/answer?
    Thank you in advance for your help!

    • Michael Bovee says:

      Ann – If I were you, I would walk away. Settling debt, and getting the agreement in writing, is just too common place for them to tell you to request a letter outlining the agreement afterward.

      I found a BBB alert for Central Financial Control that said “According to information in BBB files, this company is no longer in business. If you have an unresolved dispute with this company you may wish to seek legal advice.” You can see the BBB alert here. This may not be the same entity you are dealing with, but the alert is a concern set beside the other issues.

      Who was this debt originally with? How long ago was the past payment you made? What state are you in?

      • Thank you for responding. I initially tried sending a certified letter to CFC offering a settlement. I got the address from my credit report. (Ive never received a letter from them). It was returned so did some digging online and also came across that BBB alert. I called Sierra Vista Regional Medical Center where the debt originated and they gave me CFC’s number. I am in California. The debt was reported to CRA in 2010.

        • Michael Bovee says:

          Ann – It would be a good idea to call the medical center and verify whether the debt was sold, or if the account was assigned out for collection. My feedback will be different depending on the answer to that.

          • I just got off the phone with the medical center’s billing dept. They confirmed the account was sold to CFC. I called CFC again to see if I got a different answer from them, but the agent said it’s company policy not to send out letters before payment. He did say the company will send “random” letters of settlement offers, but not confirmation letters. He said they have no reason to lie to me, back out on the agreement , come after me for more money and put their company at risk for $500 extra.
            I read online that someone wrote on the back of a check something to the effect “this settles my debt with (debt company)” and by said company cashing the check it was in essence an agreement. This person said the collector came after the balance owed months later, but he faxed them a copy of the back of the check and never heard from them again. Would that work?

            • Michael Bovee says:

              Ann – I called Central Financial Control. I spoke with a Rep, Tiffany, and a Supervisor, Laura. Both were very pleasant and helpful.

              Ways I would encourage you to proceed:

              Call back and go over the details of your settlement and record the call. You need a new due date. Take care to write down who you spoke with and the date and time of the call as well as the highlights of the conversation. Be sure that you send payment in a manner they must sign for, and that is recorded (USPS Express, Fed Ex), this way you can show receipt. Also, send check with a MEMO note “Payment for our agreed settlement in full”. Similar to the accord and satisfaction you brought up in your above comment.

              • Michael,
                Thank you for your advice and for even going as far as to call CFC. I took your suggestions as to how to proceed.
                Now I’ll wait to see if they close my accounts as promised once they get my settlement payment. Fingers crossed. Thanks again. I’m so glad I found this site!

  21. John T. says:

    I was sued by capital one bank, from my Credit card through Michael Scott out of Dallas, they filed in the county courts and the Judgement is pending. I responded as required, and stated I didn’t owe the debt and demanded verification to the lawyer and to the courts to stop any default judgement. Although the lawyer continues to call, and I have never answered any of their calls, the card is old and, was max’d and paid on for over 10 years, hard times have had me unemployed, previously self employed, so no unemployment wages. They filed within 3 years of my not being able to pay.
    I still don’t want a judgement to deal with for personal reasons. I am needing to know how much time will the pending Judgement be good for… or do I need to try to negotiate a settlement…. if so, will attempting to negotiate a settlement over the phone negate my ” I don’t owe the debt ” plea… as I know they record all phone calls in an attempt to collect a debt..

    I am cash broke by the way.. and have been for a long time..

    Thank you Sir for any pearls of wisdom,

    John T.

    • Michael Bovee says:

      John – Unless you are in a position to follow through with any negotiated settlement, I would not suggest calling to just feel out your options. How much are you being sued for and how much can you pull together to offer in a settlement?

      As far as how long it could take for the case to progress, it varies. Have you gotten anything from them since you filed an answer besides phone calls?

  22. Michele R says:

    Hi Michael,
    AT&T has sent me over to a collection agency and I called them to see if we can work out a settlement as AT&T said they cannot take payments on the account since it is transferred out. A rep (whose name I obtained) said they would settle at xyz amount. I failed to ask if it would remove all negative inquiries, nor did he tell me it was on my credit report already she did indicate it would pay my bill in full. I called the agency again this morning having issues trying to log in and pay (i know bad mistake w/o a written agreement) and another male rep said by settling they will not remove any negative remarks from my account unless they receive the full amount. This didn’t sit right with me. So I said I would think about it. I am trying to draft a letter regarding the settlement terms to send via certified mail. Am I on the right path? I did tell the rep the payment was going to be made today but in light of whats transpired I cannot in good faith make a blind payment without documentation. Any advice/suggestions? I’m afraid they’re going to sell off this debt and again I will have to start up this game again. I called back asking to speak w/the same rep as yesterday but they transfered me to the guy I spoke with this morning. I sense sneaky tactics by this guy.

    • Michael Bovee says:

      Michele – Sending letters out that you draft is not usually met with success. You want to get something in writing from them.

      I want to be sure I understand where you are at:

      Is this for a phone bill?
      Who is the agency collecting?
      Are you more focused on your credit report, or saving money in the settlement?

      Nothing you have shared so far suggests to me any thing sneaky.

      • Michelle R says:

        Yes it is for a phone bill. I don’t want it ony credit report n I’ve had/am having major medical issues so if I can do both (reduce n remove) it would be great. I called back to get the rep I spoke with to send me something in writing n she was not available nor did she call back. How do I get them to send me something in writing as I’ve read that it’s a fat chance it’ll happen

        • Michael Bovee says:

          Michelle – Reduce and remove is not generally an option. With utilities, like a phone bill, there are instances where you can get the company to remove for full payment.

          If you go for the settlement rather than removal, getting that documentation is more standard than not. If you are holding out for a letter that states clearly your payment is in return for the credit report entry removal, that is where the fat chance comes in.

  23. I have two questions and I would greatly appreciate your help.

    1. Is a settlement offer and settlement agreement the same ?

    2. If a collection agency faxed me a settlement offer which met all of the requirements perfectly and then 3 days later said it was sent in error that the actual creditor did not authorize the settlement agreement and as a result they want to rescind the offer-can I continue to meet the payments that are set out in the letter and pay the settlement amount ? I did send a check (after they verbally told me they would send me written notification of their intentions to rescind) they said they would return the check to me. I believe as long as I perform under the terms of the agreement that there is a valid contract in spite of their attempt to rescind their offer.

    • Michael Bovee says:

      Geneva – There may be an argument you can make in court for them honoring the previous written settlement offer and agreement. But you would have to file the action which has its costs. You would want an experienced attorney in order to increase your odds of succeeding. In the end, you may not succeed and have spent money in the process.

      Can you provide some more details about what took place?

      Who is the debt collection agency?
      Who are they collecting for?
      What was the balance owed, and what was the settlement offer and terms?

      If I know the answers to those questions I would be better able to help you.

      • Thank you for responding,
        Northstar for Mercedes Benz balance of $3333.59 settlement for $2,666.88 to be paid in 3 payments of $888.96 on 9/19 -10/19 -11/19. I have sent the first payment all ready check by mail certified.

        Initially I contacted them we discussed the account and came to a verbal agreement which is stated above in mid July. The following day I attempted to submit a payment they said they would not go through with the deal so I did not send a payment. In early August I contacted them again with the same terms and this time they faxed me a settlement letter stating the above terms in addition to all other information that is necessary for a settlement agreement (account number etc). That was on August 5th on August 9th they telephoned me and stated they would rescind the settlement agreement because Mercedes did not authorize it. I told them we have a written agreement all ready in place and I posted a payment (by mail that same day) they responded by telling me they would send the check back. Yesterday the 11th I received by mail a letter from Northstar stating that the settlement agreement was sent out in error and that the offer is now null and void. In addition they stated if I do not respond to the letter within 30 days they will return the account to my creditor (Mercedes Benz) and their file will be closed and I will have to respond to the creditor.

        What are any possible concerns I should have at this point. My intentions are to follow through with the last 2 payments under the settlement agreement and then request the title of the car. Also I am in Florida.

        • Michael Bovee says:

          Geneva – I would suggest you speak with a consumer law attorney with a practice that focuses on collection issues before proceeding with any payment, or any other strategy. If you would like for me to help you located on near you, send an email reply to this comment notification and I will send back contact info.

  24. have u heard of a monarch and associates??? they’ve called a few times threading me with court papers. never once have I heard from them until a few days ago when they called my mom. I’ve googled the name and came up with nothing. after serveal more calls I was afraid and ended up paying settling the debt at a lower price. before hanging up the phone he told me I will get a email with the settlement offer paid in full and the two receipts that needed to be signed and sent back. After hanging up the phone it dawned on me that I never had to that before so now I feel like I was a victim of a scam or was I not. In the letter they are address is in norco California. I’ve already called both my banks and notified them of this, I’m just not 100% sure this company is real or not

    • Michael Bovee says:

      Liz – Couple things – You say Monarch and Associates has called a few times and threatened you with court papers. You then say you never heard from them before until a couple of days ago when they called your mom. I want to be sure I am reading your comment correctly. I read it as – in the span of a couple days your mother was called, then you were called and threatened with a law suit, it stressed you to the point that you agreed to a settlement. You are waiting for an email and are supposed to sign two receipts and send those back.

      I am glad you cancelled any payments and alerted your bank. I would like to see the email they send with the receipts. If you are up to it, I will review those, and the company, with your help. We can connect on this off line. Just post a follow up reply to this comment string and let me know you are good with connecting via email and on the phone and we can go from there.

  25. Hey Michael if the debt settlement letter I received shows an extra “$” before the settlement amount, is it okay to pay or should I request a new letter?

    Example: “…..we have agreed with you to accept $$3200.00 as settlement in full…..”

    I just want to make sure there’s no hidden “we gotcha” if an issue ever arises. It’s paying a $6k debt.

    • Michael Bovee says:

      Jerry – I would have no concern about the additional dollar sign in the settlement letter.

      • Thanks Michael.

        Another question. I forgot to write “settlement in full” on cashiers check. Is this bad? I did keep copies of the check and of course the settlement letter.

        • Michael Bovee says:

          Jerry – The letter outlining the settlement terms etc., and proof of payment being made within the agreed time is all you need. Placing settlement in full in the memo of the check is not necessary.

  26. Hi Michael,
    Was wondering if you could help me. We settled a whole bunch of debts we had through NDR. We were supposed to be in the clear, but I just recieved a letter from Gordon and Weinberg telling me that my Exxon/Mobil is not settled. The settlement was through another company called Prime Source Capital Management. I called G&W and they have record of a payment being made that was to be the settlement but someone processed it as a payment. I do not have a settlement letter as it was sent to NDR. Whom I contacted a thousand times to get the letter. Now they are out of business and PSCM isn’t returning my phone calls. Is there anything I can do? They see that a payment was made, I have my bank statement. I just wanna cry at this point. Thank You in advance for any advice you may have to offer.
    Eva

    • Michael Bovee says:

      Eva – Is the NDR you are referring to National Debt Relief? If not, who is NDR? Who was the payment processor for your settlements – someone like global client solutions?

      I can help you, but need to know who was involved along the way before offering up what to do next.

  27. Hi Michael,
    Sorry about that NDR is National Debt Resolutions. They were the the agency we used. The payment was processed through Prime Source Capital Management. The amount that was left after settlement is now with Gordon and Weinburg. When I spoke with G & W the associate informed me that they have the $ 1, 500 on record but it was put in as a payment not a settlement. I’m sorry about all the confusion, I so upset over all this. Thank you for getting back to me.
    Eva

    • Michael Bovee says:

      Thanks for the additional details Eva. Prime Source Capital is a debt collector. Did National Debt Resolution have you set up with an escrow account through someplace like Global Client Solutions, or NoteWorld (now Meracord)? If so, can you still log into your escrow account on line?

      Try not to stress over this. It is unfortunate you do not have the written agreement or settlement letter. It would make resolving this simpler. But you can get through this all the same.

      Do you happen to have any email communication saved from National Debt Resolutions about the account? Anything identifying the date they said they had reached the agreement with Prime Source? How about the date of payment remittance for the settlement?

  28. Hi Michael,
    We had set up a seperate bank account with our personal bank. So I have access to the account and can see that a $1, 500 payment was made to Prime Source on April 26th. G&W also has this information because when I was talking with them they told me they saw the payment to Prime was processed on April 25th. So they know the money went to a debt collector but was a clerical error when processed. As far as emails go the only email I have from NDR is a spreed sheet from them saying Exxon was settled. Thanks for the words of encouragement and all your help.

    • I forgot to add that G&W told me without the letter stating that the account was settled there was nothing they could do, except offer me a settlement of $1,200 on the $1,600 that is left on the account.

      • Michael Bovee says:

        Okay. I was hoping you would be able to identify dates for when National Debt Resolution had struck the deal with Prime Source Capital.

        First, I want to state the obvious (more for later readers of this page than anything else): You absolutely want some form of documentation when settling a debt. Whether you are negotiating settlement agreements on your own, or hire someone else to do that for you. There are one off scenarios where you can record a phone call, or even be meticulous with notes of what was said, when, and by whom. But the best way to insure that you can overcome a mistake like has happened with Prime Source Capital, is to get everything in writing. With that out of the way, here is my first suggestion:

        Put together a complete chronology of events surrounding this account, and include everyone involved. Full names of companies, people you talked with at NDR, dates, and who you have talked with at Prime Source and Gordon and Weinberg. Once you have all of your notes put together, I want you to file a complaint with the CFPB here: http://www.consumerfinance.gov/complaint/. Once on that page click on “debt collection” and start filling in all of the fields using your notes as a reference. You are basically filing a complaint about collection continuing after the debt was resolved. Prime Source Capital Management will have some record of what transpired with National Debt Resolution, either an email exchange, letter, or record of a phone call that took place (perhaps even a recording of any phone call). They will also have a record of any past transactions with your debt settlement company, which once reviewed would likely show no pattern of simple payment arrangements, but a consistent pattern of settlements, which would make it fairly safe to assume that is what occurred with you.

        Once you file the complaint against both Prime Source, and Gordon and Weinberg, you should be able to check on the status, and can expect some type of correspondence with in a few weeks.

        I would encourage you to do this as soon as you can. Please post updates in this comment string with your experience and results.

  29. Thank You so much Michael!!! I will do exactly as you said , and keep you updated on what transpires.
    I really thought I had no hope left at all but to pay it all over again.
    Again Thank You sooo much!!

  30. Hi Michael,
    I just wanted to update you on today’s events. I did as you said and filed a complaint. This is what I received
    : We reviewed your complaint, but the company you complain about is not yet registered in our system. We are actively trying to register the company you identified so we can process your complaint. We will let you know when we are able to forward your complaint to the company.

    In the meantime:

    - We’ve sent a copy of your complaint to the Federal Trade Commission, where they’ve included it in a database for state and federal law enforcement agencies.

    - You may contact your state and local consumer protection offices about the issues raised in your complaint. Call 311 or your local directory assistance to find your local resources.

    - You may contact the company about this matter directly.

    - You may get help from a private attorney, your local legal services office, or file your own case in court. Certain laws may limit the time period in which you can file. If you need free advice from an attorney, you can contact legal aid organizations for a referral. Visit http://www.lsc.gov to find legal aid in your area.

    Please keep in mind that, the CFPB cannot represent individuals in legal matters, and that this letter is not meant to say whether or not your complaint is valid.

    I also did a lot of digging yesterday to try to find a number for Prime Source because the number they have listed said the account is locked. Whatever that means. So I went on and found FR Holdings who used to deal with Prime Source. I called and left a message for a very nice gentleman who called me back this morning and said that a settlement was emailed to NDR back in April, but he would call Prime Source for me and have the letter emailed to me this afternoon. Keeping my fingers crossed that I do receive this letter. You have been a huge help to me and I appreciate your time and energy getting back to me. I will keep you updated on the progress of both of these events.
    Thank You again,
    Eva

    • Michael Bovee says:

      Thanks Eva, and please do post updates about your situation.

      It is interesting that Prime Source has not registered and assigned someone to monitor the CFPB complaint portal. This year brought the most significant changes to the debt collection industry since 1977, and the CFPB is a huge part of that. I suspect there is more change to come. Why Prime Source would not be at the top of their game right now with registration is, at least to me, a caution for others dealing with them.

  31. Hi Michael:
    Just found your website today. Read your above advice about settlement letters and agreements. I also read through most of the comments to get a feel for other peoples situations. I unfortunately still feel as though I do not totally understand. So I have two accounts I would like to pay in full. One is with Crd Prt Assoc, and the other is with Financial Credit Network. Step one, I call and state that I will be paying the accounts in full and will need an agreement or settlement letter? Here is where (I believe) I am lost.I will ask the company to send me this letter prior to giving them any money? Does the letter stipulate that once payment is received X will take place?! I plan on calling tomorrow, if not Monday to begin this process, really looking forward to your thoughts. Thank you in advance for all your information.

    • Michael Bovee says:

      Melissa – If you are paying in full, the concerns about debt settlement wording in the letter is not an issue. You are not calling to negotiate any balance reduction or payment terms, so just requesting a payoff letter would be fine.

      What else you may be looking for in the pay off letter as far as “X” taking place may be something like “Once payment is received, we will update our information with the credit reporting bureaus to show paid in full”, or something similar.

      What were these collection accounts originally? How old are the debts?

      • Michael,
        Thank you again for every minute of your time. One of the collections is medical and one is a untility company in California. I moved and didnt provide them with a forwarding address thus causing it to snowball out of control. The medical account is about 2 years old, the utility is say 4 years old. I fear making these large payments and simply getting no letter, I didnt realize it was common to ask for the letter prior to payment. Do I just state I would like the letter and then you can take your money from said account? I was told I will need to contact the bureaus myself with the letter as they do not haggle with this. I just cant express how uneasy I am. I truly dont want to send $1,000 and simply be in the same position. The reps at both companies have already been impossible to tolerate and all I was asking is total amount due. Is it normal to feel like this is a trap? I need those letters.

        Melissa

        • Michael Bovee says:

          Melissa – It is fairly common to feel as if you are being trapped by debt collectors, even when you are simply trying to pay off the bill. It is a bit counter intuitive that debt collectors will make it difficult to pay them, but many of them to develop a gruffness to their job that spills over to the successful files they work.

          If you run into trouble getting the pay off letters post an update here. I can assist you further.

  32. Michael, thank you for assuring me others have felt this way. If I proceed and pay both in full and fail to get the letters, there is a next step? Maybe a back up plan? That would really help me feel a lot better. You couldnt be more correct… random you would want to be difficult to work with. Im offering the entire dollar amount, I just want to be able to update my credit report to reflect such! Is there a forum for other questions (dispute letters, credit repair, etc)?! This has been wonderful.
    Thanks again!

    • Michael Bovee says:

      The next step after paying the debts would be to wait about 30 to 60 days and then check your credit report to see that any reporting has been updated to show the accounts as paid. If you needed something to happen quicker because you are trying to get a home loan or something like that, you could take some steps to expedite that, and would certainly want the payoff/settlement letter for each account.

      If the accounts are not update on your credit reports properly after a reasonable time, you would then dispute that information with the agencies reporting and the bureaus. I can help you through that process here on the site. I have not fully published the credit reporting section with all of the guides and material, but those may be up by the time you need the info. Otherwise, I will point you to the most relevant pages if this indeed comes up.

      Question: Do you have any recent collection notices from Credit Protection Association or Financial Credit Network? If so, when did you receive the most recent letters?

  33. Michael – Wonderful, I have done most of the leg work cleaning up my credit. There wasnt much to work on as most of our “financial life” was in my husbands name. Anyhow long story short I need to clean up his, that is where the serious work is going to be. I need to get him to a 640 so I have to get about 100 points. The issues I am bringing fourth here today are solely the small things that are hang ups in my name.
    I dont have anything recent from either of them, didnt even know I knew either of them money. Pulled my credit to see where I stand in the world, and found out I owed both places. Made a phone call to each asking status, total amount due and original company trying to collect. Both places were untolerable. It was surreal.
    I hear its a good idea ( in the clean up process) to dispute everything you can on your report, and then go from there. Do you give advice on the best steps in the clean up process?

    Melissa

    • Michael Bovee says:

      Melissa – Disputing all negatives on your credit report can lead to additional hurdles that are not necessary. I am not a fan of blanket disputes.

      I do offer feedback on credit reporting for the DIY-er. Lets start a page on the topic together. You can use the Ask Michael feature here to start a page.

      Fill in as much detail about your credit goals, credit needs, and the negatives on your husbands report in the situation/background section. Pose a condensed set of questions and submit. I will get the alert and respond with feedback and likely additional questions (but tomorrow). We can correspond on that page through the comments and work through to your achieving your goals. Sound good?

      • Michael, this is such great advice. I have a question for you. I am in basically the same situation as MelissaD. I have a utility bill on my credit report for less than $300 that’s about 3-4 years old. I want to pay off the debt in full, but I can’t get ANYTHING in writing from the debt collectors (Robinson, Reagan, & Young). They told me to send a check for the full amount and they “promise” to send me a receipt/paid in full letter afterwards. But I don’t trust them to do this. My husband and I are trying to get a mortgage loan and this utility bill has been a major obstacle for us.

        So my question is, how do I get a payoff letter from them prior to payment? If I can’t get this, is it really safe to send them the payment with nothing in writing?

        I am contacting Robinson, Reagan, and Young of my own accord. They have not tried to collect this debt from me in years and seem to have no interest in doing anything to help move this process along.

        • Michael Bovee says:

          Harper – If you record the phone call, even let them know that you are, identify the collector, the company, your account number, the payment arrangements being made etc., you can move forward without the letter. But I would rather you get the letter.

          If you are paying the bill in full, the loan officer or mortgage broker you are working with may be able to help you with this. Tell him/her about the situation and ask them to send Robinson Reagan and Young a written demand request, then follow up with payment on that once the loan officer receives it.

          If you run into any trouble from here, post an update to this comment string and I can help you further.

          • Thank you very much! I will be sure to discuss this at our next meeting with the loan officer. I will also be sure to record any further phone conversations that may occur between myself and the collector. Thanks again!

  34. Michael – Super excited! Thank you again for everything! Ill work on my questions tonight, and post first thing tomorrow!

  35. Hi Michael,

    I recieced a settlement letter recently but they spelled my city name and entered an incorrect zip code on the settlement letter. Luckily it still arrived at my address but I’m wondering if I should request another letter? All other important requirents are met on the letter. What do you think?

    • Michael Bovee says:

      Paul – Does the settlement letter identify you and the debt correctly? I sincerely doubt you would have a problem using the letter to back up the fact that you resolved the debt. You can certainly call in to suggest you are willing to accept the offer, but only if the letter is corrected.

  36. Hi Michael,
    I just made a settlement for my BofA credit card debt with the debt collector about 40 min ago, I owed $11.400 and they accepted a lump sum of $2000. I asked them to send me a letter with all the agreements also stating that the debt is paid in full and that they will not resell the debt. This debt collector is collecting for the owner of the debt which is no longer BofA. They agreed on sending the letter and will send it via email, will that be a valid document? Also, they are requesting my bank account number to collect the lump sum on the date we will agree on. I told them that I don’t feel comfortable giving them my acc # and if instead I could send them the money in a different way liie a money order or cashier check. They said they will only accept the acc#. I definitely don’t want to give them any of my bank information. I thought that perhaps I could buy a prepaid card but not sure if they will accept it. I’m still waiting for their email, I haven’t received it yet. Please give me your advise. Thanks

    • Michael Bovee says:

      Anna – If the emailed settlement letter comes in the form of an attached document on their letterhead, and it meets all of the requirements, that should not pose any problems. Just be sure to print a copy and keep in a safe place. If the agreement comes in the form of an email message (in the body and nothing attached), I personally would not accept that.

      As far as paying, it is fairly common to pay over the phone with your checking account info. It is less and less of a concern to do that, and hold tight to sending a certified check. I do recommend you use a separate account for funding settlements. You can set the account up at the same bank you have now. Takes about 20 minutes. If you have the time to do that before the payment date you agreed to, read this report: http://consumerrecoverynetwork.com/paying-your-credit-card-debt-settlements/

      If I knew the debt buyer, and the debt collector names, I would be able to offer more about either by way of experience.

  37. Thanks Michael, I’ll go ahead an try to open a separate account for this. The debt buyer is Cavalry Portfolio Services, LLC and the debt Collector is Vision Financial. Do you know them?

    • Michael Bovee says:

      I do, and I would suggest going with the separate account for your payment on the settlement. If you would like me to review the settlement letter with you, I can do that. No charge. Just email me if you want to connect on that after you get it. Just reply to the same email you get these comment notifications from.

    • Michael Bovee says:

      Anna – I reviewed the settlement letter from Vision Financial Collection Services and Cavalry SPV. It’s a solid and standard letter that I would be comfortable with. With a week to pay, you can set up the additional account at your local bank branch tomorrow and call in your payment in plenty of time.

      Great work!

  38. Hi Michael,
    Thank you so much for sharing so much invaluable advice.

    I am currently being sued by Portfolio Recovery Associates for the amount of $21,000. I called them to negotiate a settlement. After a couple phone conversations we agreed at a settlement of $10,800. I asked them to send me a settlement letter first, but they told me the will not send a letter until after the have received my electronic banking information. After reading through a lot of your articles and comments, I know I should not make any payments until I get something in writing. Please advise me on what I should do at this point. I have an separate account set up with the funds ready to pay them, but I don’t want to until I receive the letter. I have to respond to the summons by Oct. 20th.

    I am also in negotiations with Wells Fargo and have come to a verbal settlement agreement and they also won’t send me a settlement letter until they have payment information.

    FYI – I have recorded all my calls.

    Please help!

    • Michael Bovee says:

      Amma – You are in good shape with the recordings. Starting a couple years ago, it became a bit more common for original creditors like Wells Fargo and Chase to want to get the payment information and dates set up in their system before releasing the settlement letter or written agreement. This is why I often recommend setting the first or only payment toward the settlement to a date a week or so from when you negotiate the arrangement. This allows time to get the letter via mail, or faxed to you (which can take a couple days for internal systems). The fact that you are using a different account to fund these is another layer of protection, because you simply would not place the amount you are settling for in the account if you do not have documentation in hand prior to the payment date. And this is especially important with the Portfolio Recovery Associates settlement. PRA got weird with their settlement letter policies in the beginning of 2011, and they still can be. The fact that you are settling a lawsuit with PRA means you are likely dealing with a deb collection attorney, and perhaps not with PRA directly. Is that the case? If so, your recordings are even more important. While I do have a measure of trust in PRA doing things right, or correcting an error in processing a settlement if one were to occur, I have little faith in most debt collection law firms.

      • I believe I’ve been dealing with PRA directly. Every time I call I get a PRA rep. They do remind me from time to time that they have already filed a lawsuit. So if I have just the amount needed to fund the settlement in the account I give them and set up a withdrawal date for a couple weeks out, I should be okay?

        • Michael Bovee says:

          You have the call recordings, and would be setting up the payment for a date several days out to allow for the agreement to be faxed or mailed. If the agreement does not show up within 48 hours of the payment pull date, you could call and let them know that you set up the payment arrangement with the understanding that a letter would be forthcoming, but you have not received it. This means you will not be able to fund the settlement if it is not faxed over to you right away.

          Because you are being sued by them, it is always a good idea to talk with your own attorney about this type of thing. And one with debt collection defense experience would be best. I can help you locate one if you need. That said, you do want any documentation to reference the fact that they will drop any suit. If they balk at this for any reason, post an update here and be precise with what was said.

          Portfolio Recovery is as hyper aware of complaints and working those out quicker and more fairly than in years past due to recent regulatory realities. If anything goes south, please post an update and I will help you from there – no charge.

          • So I finally did receive a letter from PRA before I had to give them my electronic payment information. My concern is that it does not address anything about them dropping the lawsuit.

            Here is what the letter states:
            “Your account was purchased on 12/18/2012 from FIA card Services, N.A. This letter confirms your arrangement made on 9/23/2013 to make the following payment(s) to settle this account.

            Payment in the amount of $10,800 is due by 10/25/2013.

            Should you miss any of the payments described herein, this payment plan may become null and void.

            If you complete this payment plan and our company is reporting our company’s trade line for this account to the three major credit reporting agencies, our company will report this account as settled.

            If you have any questions, please call our office toll free (866) 428-8102. Our operations are 8am-9pm Mon, Tue, Thu, and Friday.

            Sincerely,

            We are not obligated to renew this offer.”

            Should I pay even though is doesn’t say anything about dropping the lawsuit? I have to respond to the summons by Oct. 20th.

            • Michael Bovee says:

              Amma – The settlement letter and proof of payment would protect you from any additional collection action. And I would pay it before the summons response deadline. You can and should call and confirm that they will file a motion to dismiss the suit, but this settlement implies same. You could file a motion of your own after taking advantage of the settlement offer if they failed to.

              In the past I would have advised some extra caution (and still will with certain debt collectors). Today we have the CFPB paying very close attention to collection companies like Portfolio Recovery Associates. PRA probably has a staff member assigned to the CFPB complaint portal. Any complaint you were to file with the CFPB would be escalated to what I would call a smart set of eyeballs at Portfolio Recovery.

              If you do run into trouble please post a comment here and we can go from there.

              You do, of course, have the option of requesting a new settlement agreement from PRA that includes reference to the dismissal they will file.

  39. Chris Mathews says:

    I just settled with the second lien holder of our foreclosed property last week. I received the settlement agreement (SA) and already paid the settled amount. My challenge is that the collection agency is giving me a hard time on how it will be recorded with the service bureaus (SB). In the SA, it states that it will be recored as “settled in full.” However, they are stating via email that it’s going to be reported as “settled for less.” My questions are two folds.

    1. Is wording recorded to the SB better for our credit if “settled in full” is used compared to “settled for less?”
    2. What is my recourse if they decide to not perform what is stated in the SA?

    Thank you.

    • Michael Bovee says:

      Chris – I do have some feedback to offer, but before I do, I want to get clarity on your use of the term Service Bureau. Are you referring to credit reporting agencies when using that term, or the loan servicer?

  40. Hi Michael ,
    Having found your site gave us new hope, I have a question, I have bills on my credit report from different collection agency and we really want to settle it, pay off all our bad debts starting with mine, so we can start building up our credit rating and score. Started calling them last week we have ready funds to pay off al my bad debt but I asked them to send me a letter or a receipt first stating that I have paid the amount that we have agreed( settlement letter) before I send the payment in cashiers check or Money order for my protection and record. But they refused they want my checking acc#. Or my debit/credit card then they will mail the settlement letter after payment is done. My husband had a bad experienced 3 years ago when he paid a collection agency by phone with a personal check, it was not reflected to his debt us paid instead it was sold to another agency. We don’t want to make the same mistake again. I don’t owe them much ($3000 more or less) We just want to clear my debt first then my husband next.
    What would you recommend us to do?

  41. Hi Michael,

    I received a call earlier tonight from a Bank of America credit card that I thought was settled. They told me I was late on my payments. I had a balance of $11,383.68 in July that I made an agreement over the phone to pay $8987 by a certain date to settle the account. I was lent the money from a family member and made the payment. They are saying that because I didn’t call to state that the payment was for settlement that it was processed as a payment and I still owe the balance. Unfortunately, I did not get anything in writing. The balance as of today is stated as $2497.65. Do I have any options? I am currently living paycheck to paycheck and struggling to pay my current bills as is.

    Thanks

    • Michael Bovee says:

      Les – I would encourage you to file a complaint about this with the CFPB. Go to this page: http://www.consumerfinance.gov/complaint/. Click on credit card, and follow through with each field. Provide as much detail regarding all of your calls leading up to and when you settled. It would be good to put the chronology of what happened on paper first, and then use your notes to complete the complaint process. Be as specific with dates and names of people involved that you can, and where appropriate.

      Response time on these types of complaints are fairly quick, but can take a couple weeks. Post an update to this comment string with what happens and lets go from there in needed.

    • Michael Bovee says:

      Quick question: Was the settlement completed directly with Bank of America, or was it completed with a collection agency? If a debt collector, who?

      • Thanks for your quick reply. Yes, the settlement was directly with Bank of America. I will update to let you know how I make out.

      • Great news! I filed the complaint and Bank of America agreed to the initial settlement. I got a letter in the mail from them the other day saying that the account is settled. Thanks for your help!

        • Michael Bovee says:

          Awesome! Glad that worked out for you. If you do not mind, would you post a follow up comment and briefly describe your experience with the CFPB complaint portal? It would help others get a feel for that process, and its effectiveness.

  42. Hello Micheal,
    I have a few questions for you and hope that you can help me out. I am in the process of cleaning up my credit report and have been doing so for about six months (my credit was totally messed up). I have disputed items and some where deleted and some were verified. I am now at the point where I am ready to negotiate debts from collection agencies. I have 4 all together that i am ready to tackle. LVNV Funding for $1650, Main Street Acquistion for $7,903, National Credit Systems $6,432, and Portfolio Recovery for $1547. My questions are 1. What is a good percentage to shoot for when negotiating debt? 2. Are there any negative effects to paying off old collection debts (will they be able to sue me for the remaining balance if i pay or could it effect my credit score in a negative way)? 3. What is the difference between paid in full and settled in full as far as credit reporting goes and does it make a difference? I also want to mention that these are very old debts and the statue of limitations have already expired on all of them, in fact they are due to drop off my credit file within the next 2 to 3 years.

    • Michael Bovee says:

      Mark – My answers are numbered below.

      1. If you are able to pay the settlement you negotiate in a single payment, I would target all of the debt collectors you listed at 50% or less. The worse you look on paper to them as able to pay (credit report shot etc), the more I would target lower than 50%. If you need to negotiate your agreements to be paid over time you could pay a premium for that. Need many months to pay? settle for sometimes 60%.

      2. No, they cannot sue you for the uncollected portion. Mistakes in how your settled debts are tagged in a debt collectors system (even original creditors are fallible), do happen, but not that often. Your settlement letter, or written agreement, along with proof that you paid the amounts agreed to, and on time, will assist in correcting any later errors, should they occur.

      3. Now that you are dealing with debt buyers, the credit damage is done. There is no meaningful difference if they report the settlement as paid in full, settled in full, or settled for less. There are some one off situations where a lender will manually underwrite a loan product and seem to care about whether collections were paid in full or satisfied for less, but I see that so seldom nowadays compared to 10 or 15 years ago. This is not something to get hung up on in my opinion.

      There are very real economic and credit benefits to settling debts this old. If paying these settlement meant saving half a point on a mortgage would be a good example.

      • Michael,
        Thanks for the rapid response and I will take everything thing that you said and all the information listed in this thread into consideration. I have about $5400 saved up for paying off collections debts. My next step is to put that money in a special bank account and get own the phone and get to negotiating. I will get any settlement agreement in writing before i make those funds available to the collectors. Is there anything else that i need to be cautious of before i proceed? Once again thank you for all that you are doing to help. This thread was extremely informative, i actually learned quite a bit from just scrolling down the thread and reading your posts.

        • Michael Bovee says:

          Mark – As you work through your negotiations and settlement with each debt collector, post additional comments and questions. You can use the search feature in the upper right to find current pages that discuss each one of the debt collectors you are dealing with. Each page will have additional information and comment feedback from other people, which are great to learn from too.

          One caution when negotiating with debt collectors is to never offer too much information. Just stick to the fact that your finances have been, and continue to be, a struggle. You really have limited resources to try and put this behind you. If you get stuck on one account, move on to resolving the others and circle back. In fact, it is sometimes a good idea to play one account off of the other. Something like – “I have 1k to settle an account with. LVNV is another debt collector I am dealing with and will be calling them next. If you cannot help me with this Portfolio Recovery account, I will move on to the next debt collector” – or something similar. You are pretty much in the drivers seat with debts outside of the SOL.

  43. Hi Michael, in March of 2013 I was being hounded by a Debt Collector, called Apex Recovery holdings. They had all my personal information as well as the information for this payday loan I had taken out over the internet. They were threatening me telling me I was going to be arrested, taken to court, they were going to call my employer and tell them I committed fraud. They told me the original debtor would settle for $1700. i asked him for something in writing from their company. He e-mailed me the information, so I made a payment plan of $175 per pay. The last payment was in Aug. 2013. They told me they would send me a letter showing the debt was paid in full, I call there all the time and they tell me they would e-mail me, but to date I have nothing to show debt was paid. On my credit report and with the original debtor the debt is still showing open. What do I do? How do I know that I gave money to a debt collector and I wasn’t scammed. I try to google the phone number but the company doesn’t come up.

    • Michael Bovee says:

      Judy – I do have real concerns for whether you were a victim of a debt collection scam. Legitimate debt collectors do no threaten you with arrest. I would like to talk to you about your situation first,and then recommend some state and federal regulators for you to contact. If you are up to speaking with me, post a comment and confirm. I will email you my contact info.

      • Hi Michael,
        Thanks for responding. I have yet to receive a paid in full letter. He said I would have one emailed and mailed to me. This collector was from area code 716. Now that I paid this off I am getting calls from someone claiming to be from a lawyers office telling me that I owe this debt. I closed my checking account in the meantime. But 1700 is a lot of money to me. I just got another email from acs stating they are going to have me prosecuted for a list of reasons. I have outstanding payday loans as I got stuck in this cycle it was costing me more than 800 per pay. I got myself in a big situation. This other company is giving me a different name but is also from 716 area code. He even had someone calla me and tell me he was from my county and he was a process server and I better call the to settle the matter. I tried googling the number but nothing comes up.

        • Michael Bovee says:

          Judy – I would like to help you connect some dots. It would be best to connect off line, and we can follow that up with posts to this comment string, or I may start a new page in order to best warn others from what, at least right now, I consider a scam.

          I sent you an email. I hope we can coordinate a time to talk. My direct number is in the sig line of my email.

  44. I have been communicating with Stern & Associates PA out of Greensboro, NC (I live in VA) about a $220.00 debt. The gentleman that I spoke with offered a settlement over the phone which I would love to do and get it over with but he refuses to send me something in writing. I’m not comfortable with this and not sure where I should go from here.

    • Michael Bovee says:

      An alternative to the written agreement to settle would be to record the call where you cover all the details. Be sure to let them know you are recording the call and why. Keep good notes of date and time, who you spoke with, the number called etc.

      Stern and Associates is an established collection firm. They would have many a letter template to use for settlement agreements. It is just silly not to provide one. You could, of course, stick to your guns and not proceed until you have a letter.

  45. Hey Michael,

    I negotiated a settlement with a local attorney who’s collecting credit card debt for a credit union. The letter matches with your suggested criteria but I’m a little worried about the settlement sentence. The phrase reads:

    “We agreed to settle the claim for $4,200″

    I guess I would prefer to see “settlement in full”, “settlement of the account” or something similar but I wanted your take on the issue or whether I’m just being silly. What do you think?

    • Michael Bovee says:

      Joey – That verbiage is still synonymous with your needs. and would help you correct any issues later, should they occur. Attorneys have a habit of using certain terms. Question though – were you sued?

      Covering your back side in a collection event is NEVER silly!

      • Hi Michael,

        No, I was never served and/or sued. I’m assuming they used the same template letter they would in that circumstance.

  46. Gwen S. Stubbs says:

    Hi Michael,

    I recently settled a debt and received in the mail as promised, a letter indicating such so I may send it to the 3 credit bureaus. Obviously I don’t necessarily want to ‘contest’ the debt; my intent is to update the ‘status’ if you will. What are your suggestions on facilitating this? My concern is having to make several attempts and requests to get this done.

    • Michael Bovee says:

      Gwen – I do have feedback about sending your settlement letter and other doc’s to the credit reporting bureaus, but a couple questions first:

      Who did you reach your settlement with (original creditor, collection agency, debt buyer)?
      How did you pay the negotiated agreement? Is the settlement fully paid (not a series of payments over several months)?
      What do you mean by “recently settled”? Was this completed in the last 30 to 60 days?

      Post a comment update with answers and I can offer a better detailed response.

      • Gwen S. Stubbs says:

        Hi Michael,

        I settled the debt with Dynia & Associates, LLC which upon information and belief is a debt collector. The original creditor was Juniper and current creditor, Jefferson Capital. I paid via check by phone in one payment. The original debt was around $1,275 and after negotiating with Dynia, the final payment arrangement was $550.00. The one lump sum payment transaction occurred on July 30, 2013. I didn’t receive their letter in the allotted time and once contacted they then sent the letter which is dated September 12, 2013.

        • Michael Bovee says:

          Thanks Gwen. I generally suggest waiting 60 days from the date a settlement is made and paid before sending letters to the credit reporting agencies to update accounts as paid and zero balance. If you are in the middle of a refinance or home loan approval you could be proactive earlier. It sounds to me like your file in there system did not get updated until you received the settlement letter, so you could wait a couple more weeks, or send your letters to the credit reporting agencies now.

          Sending a letter to correct your credit report could be as simple as:

          “I am writing to inform you that you are reporting inaccurate and incomplete information. I have included a copy of your credit report with the inaccurate item at issue highlighted, along with a copy of the written agreement with the named creditor and proof of payment. This account has been paid. The creditor has failed to provide you with this new information, or you have not taken care to update your files appropriately. Please fix your records and send me a copy of the corrected report.”

          You would also want to send a copy of the letter to Jefferson Capital (I am assuming that is who is showing on your credit report).

          The responsibility to investigate and update their records is on the credit reporting companies. You do not have to send a copy of the settlement letter from Dynia/Jefferson Capital, or proof of payment. But your concern about expediting the correction is often better served by sending in supporting documents.

          • Gwen S. Stubbs says:

            Hi Michael,
            Thank you for your quick responses… I can’t keep up with you  Jefferson Capital is not on my credit report; however, that is not to say they are not on there now. The last report I purchased which was a 3-in-1 report was April 24, 2013. By way of further background and information, since May I have settled many debts by way of paying in full or settling with some of my other creditors. Those creditors by routine, excluding Jefferson Capital, would contact and report to the 3 credit bureaus within 30 days of the date of our transaction. Additionally, they also each sent me within 7 – 10 days their standard letter in the mail stating same. Essentially, I am doing the legwork for Jefferson Capital. Additionally, I have a personal statement on my report from years ago I want to remove. Can I ask in the same letter to remove that statement? Per your previous response, you suggest to wait a couple months to send letters to the bureaus. Since Jefferson Capital is not showing on my credit reports, I can only assume I have to purchase my reports again? On the other hand, can I use the 3-in-1 report I have now to contest other settled debt… then the bureaus will in turn send me a new one for review… then I can review if Jefferson Capital appears on it? Hope this makes sense.
            Thank you!

            • Michael Bovee says:

              If Jefferson Capital is not reporting there is no need for the letter. But you may need to send one on other items if they have not been updated. You have resolved debts since obtaining that 3 in 1 credit report, so you should pull another and work from that. You can also get one free one every 12 months from the 3 majors through https://www.annualcreditreport.com. Have you run your free ones in the last 12 months?

              Once you pull a current report, locate anything you have questions about, and lets go from there.

              You can request a consumer statement be removed in any of your correspondence, or in a dedicated request.

  47. Hi there, I really need help on what to do. I was in debt with BestBuy/Capital One who I called to confirm if they did sell my account. They confirmed that my account with them for $1500 was sold to Collect America. I called Collect America and they told me that my account is assigned to Scott P. Lowery Law Firm. A lady at that Law Firm was professional in the start. I think my mistake was I agreed to settle for $1200. I was also paying another “supposed collector” for a payday loan I took out because this guy Detective Patrick said I would be arrested. I later found out it was a scam. Back to Natalie at Scott Law Firm..I gave her my account number. However, after realizing I was scammed, I went into the bank and reported it and changed all my accounts. I called Natalie to inform her but she was not in the office. I asked the guy If I can talk to him as it was important but he hung up on me. So I called Natalies line and left a VM for her to call me back regarding important information. I called back the next day and told her I changed my account. She got mad and said I went behind their back to do that and it is against the law. I explained to her I did not go behind their back but she wouldnt listen. I also told her I do not want to pay using my checking account but I am willing to send money via western union or have my bank send them a certified check. She said she will write me off as refusal to pay. I called again to work something out and agreed over the phone to settle for 500 now and 500 later total 1000. Again they said the only way I could pay was by checking account. Today I called again and she offered me a settlement of 1267.00 where I can pay before 10-31-13 of 226.00 and the remaining on November 15, 2013. I agreed to that settlement and asked her to have it in writting and she got mad and said why should she have it in writing if I “lied” about my checking account and did not pull through on my first agreement for 1200 settlement. I asked her to also email me the settlement agreement and she said no. Then she told me to email her supervisor to give permission to email me. Then she turned around and said the deal is off. I asked her why she kept changing the deal and she said because she knew I wouldnt pay it. I asked her why she gave me a deal she thought I cant pay and she did not answer. I told her I had to go as I was going in to work and she said if I hung up on her I will get it. I asked her if that was a threat and she said “yes I am threatening you”. I know my actions show that I am not in good faith to pay but I am. I was scammed so I changed my account number not because I was avoiding them to take money from me. And after reading that I do not want to pay using my checking account and I do not want to pay until I get the settlement agreement in writing. My actions may say otherwise, I know. What do I do??? I want to pay what I owe, I just got a steady job and can afford to pay little but she wont agree to anything when I ask for a letter of settlement agreement. Please help me?

    • Michael Bovee says:

      Kimberly – The collector for the Scott Lowery firm is making this a good amount more complicated than it should be. They collect debt and struggle to contact people that are both willing and able to pay. You are both. I would try to simplify this and connect with her supervisor. Not to complain, but because you are having difficulty communicating with the Natalie. Be polite and keep a business tone, but firm in the fact you need documentation of the settlement. Once you have a settlement letter, it is fine to pay via your account and over the phone, but I also understand the reluctance. Using a certified check issued by your bank, and from your account, is fine. I never recommend using Western Union to pay a settlement.

      If you run into any difficulty please post an update to this comment string and lets go from there.

  48. hi, i was planning on buying a house and a debt showed up on my credit resport. I called the creditor and told them i would pay in full just so as long as they send me, fax me a written agreement as to the date, how much i agree to pay as well as it saying “paid in full” and removed from my credit report. Im very hesistant in sending money because its happen to me where another debt surfaced on my credit report even after i paid and they claim they never received anything and i cant make that same mistake especially with a large amount. The creditor’s name is Amsher collection serv. but told me i had to call their law offices, in whom i spoke to. They will not provide a written agreement until they receive payment but every forum ive read said i need that! ive tried to negotiate twice now in paying full in return they provide that letter before i send them payment. The second time i called they refuse that written agreement until i paid than proceeded to say their hanging up now because i said “i know it will help you guys out in the long run but how do i know you this agreement is correct on your end” i dont know what to do?? if they wont negotiate! i really need to buy a house. if you do suggest i pay anyhow how do i pay? with my bank account? a personal check?

    • Michael Bovee says:

      maria – How soon are you looking to purchase a home? Is there an offer or loan pending? That will change the feedback I have for you.

      • I need to prequalify first, the mortgage broker needs me to at least pay the debt before they can even think about trying to get me prequalified. I know my score is low because of this debt. I would like to get purchase a home by the end of this year. Please advise me on how to deal with creditor? My credit score is low and I know it’ll take time to get up I need at least a 620 and because of this debt I have a 571. Please help

  49. Hi Michael,
    Thanks for the information. I negotiated a settlement with a debt collector and got an settlement offer letter. Here is what is says

    ” Please be advised that XXXXXX, LLC will accept $xxx as settlement on the Balanced Due for the account referenced above.

    Upon receipt of verified funds representing $xxx of the balance due XXXXXX, LLC will close the account.”

    Is this good enough?
    Thanks in advance

    Sam

    • Michael Bovee says:

      sam – What you shared is pretty standard verbiage in a settlement agreement. If you are up to it, you can send me a copy of the letter by fax or email and I can review it with you. No charge.

      Post a comment reply if you want take me up on the offer. I will send you an email with my contact info after that.

  50. Hi Mike,
    Your post have been really helpfull. I have a question , I am trying to setlle a debt. The debt is with cavalry and a company called Glass mountain Capital called me and mentioned that cavalry is thier clinet. They sent me a settlement offer letter by email. It has my account information and it lists cavalry as thier client. First of all can I work with Glass mountian capital if yes is this letter through email good enough or should I get a letter faxed to me?
    I will be happy to share the letter with you if you want to review it.
    Thanks

    • Michael Bovee says:

      aflac – You can send a copy of the letter to the email address you get this comment notification from. I will post my feedback in a comment reply on this page, or may email you with additional questions.

      • Mike,
        I sent you the copy of the letter. Please let me know

        • Michael Bovee says:

          aflac – I sent you an email this morning with my feedback. Great settlement offer with significant savings. Glad you are in a position to take advantage of it.

          • Hi Michael,
            The payment was made on time and Glass mountain capital has sent me a letter showing a $0 balanced due. Wanted to get your opinion on this. Would you please mind reviewing the letter?
            Thanks
            Aflac

            • Michael Bovee says:

              Sure. You are welcome to email me, or call me direct at the number in my sig line from our prior emails.

              • I have sent you a copy of the letter.
                Thanks Again

                • Michael Bovee says:

                  Aflac – I reviewed the Zero Balance Letter you received from Glass Mountain Capital. The letter looks fine to me. It is becoming more common, and even standard operating procedure, for collectors to provide those types of letters after an account is resolved.

                  It is worth mentioning, at least for future readers, that I see your experiences with Glass Mountain collections (the parts shared with me) as exemplary of fair collections practices.

                  There is a great deal of change coming to debt collection in 2014 resulting from CFPB rule making that is yet to be fully outlined. I expect legitimate collection agencies and debt buyers practices – regarding documenting settlements and payments – to be much more consistent with your experience.

                  • Thanks so much again for your advice and time. Now I need to make sure that my cavalry balance shows up as zero in my credit report and I will do it

                    • Michael Bovee says:

                      I typically suggest waiting up to 60 days to check your credit reports to be sure Cavalry updates the balance they are reporting due as zero – unless you have a loan product pending approval – in which case you can expedite the correction with the bureaus.

                      If your credit reports do not get updated, post a comment and I can offer some action steps to consider from there.

                    • Michael,
                      I want to expedite the correction process. Should I write to the reporting agencies directly?
                      Thanks
                      Karthik

                    • Michael Bovee says:

                      Yes. You can include a copy of the agreement and proof of payment with your letter requesting the correction. Send through the mail certified return receipt. Save a copy of every thing in the event you need to fall back on that later.

  51. Hi Michael,

    I came across your website and actually settled with LVNV this afternoon. They transferred me to Northland Group to do the settlement and I did ask for a letter to be emailed before I pay the settlement. The letter lists all the information that you mention except it does not say paid in fill. However, it does say that a letter will be sent stating that this account has been resolved. This is a one paragraph simple letter that looks like it was typed by the gentleman that I spoke with. Is this letter ok or should I have them add the” paid in full” to it?

    Thank you for your time!

    • Michael Bovee says:

      Chelsea – Reference to being paid in full is not necessarily something to get hung up on. Does the settlement letter from Northland Group reference that you are settling in anyway shape or form?

  52. Hello,
    I co-signed on a car loan, and, it defaulted. I contacted the creditor and found the amount owed is $2,700. My credit report shows $2119 as the amount due, but the original amount defaulted was $1800 but the account incurred fees. I want it to show paid on my credit record without paying the $2,700. The creditor has been posting a FP monthly for the past 12-16 months and I didn’t realize this. The credit union has not made an attempt to collect. I called them for the balance. What is a fair amount to offer? I have no special financial circumstances other than I didn’t feel the debt was mine and failed to think of the affect on my credit. Please offer your advice!

  53. Sorry, the credit union was never able to repo the car because it was dismantled. Now, it’s back in working order. Is there a way I can request the title released to me?

    • Michael Bovee says:

      Yolanda – You will not be able to get the title released to you with a balance still remaining due on the loan. Depending on the circumstances, you would not be able to get it released to you at all, as the cosigner.

      You will not be able to offer the money in return for the removal of the late pays on your credit report in most instances like you have described. Often the best you can do is to resolve the debt and get the fact that zero is now owed updated, and then let time heal the credit score.

      Do you know what the cars value is today (regardless of what is still owed on the loan)?

  54. Thank you for responding, good advice is hard to find.

    Ok, so I can make an offer of 65-75% of the $2100 with this amount satifying the debt but not deleting the info? That would be fine, I just want it to show paid and move on by starting a to improve my score. My score is currently at 697. I checked the value of the car, which is currently at $7,500.

    I paid the mechanic $800 and renewed the tags $65. I gain possession of the car 3-4 months ago. The co-signer agreed that I should have possession if I paid mechanic. The mechanic contacted me after he held the car in a demantlrd state for so long. I have a signed notarized document from the co-signee. Is it legal?

    Thanks again!

    • Michael Bovee says:

      Yolanda – I tend to target settlements with credit unions at a higher rate in general. Given the debt is secured by the car, and they have title, settling this and getting title released could mean getting them to accept the balance owed, but waiving fees and the like, is as good as it gets. It is not like you can dig in and work to show the car could not be sold for what is owed. They can estimate the value and see that repossession in this case likely means getting paid the loan balance, the fees, and repo costs.

      You should not have any problems with the cosigner docs, though you may need them to sign off on something more state DOL conforming, but that is for titling after the credit unions security interest is removed. If there is something unique to be done by the credit union when sending title, they would be able to speak to that, or you could call the state department of licensing and run down the scenario and ask them what you will need.

  55. Thanks again, I will visit the credit union and pay the amount due next week. It will feel right to pay them what they are owed and move on. I will look into the required form for the title and work on that. If I’m able to sell the car, I hope to donate the proceeds to charity after reimbursing myself.

    Will it take 7 years for my credit to improve?

    • Michael Bovee says:

      Yolanda – Negatives like this car loan tend to have the biggest drag on your credit report when they are fresh. If your credit looks good besides this loan, than the sting to your credit score should diminish in the next 12 and 24 months once you resolve the balance being reported to zero.

  56. I have the money to negotiate the collection balances and have called, but the company is unwilling to negotiate a reduced rate. I didn’t expect them to but now I want to know if I do pay it in full, how will it get removed from my credit report or how will a “collections paid in full” status effect my score? Is it worth paying it off if it will stay on my report for another 7 years. Or should I try to get them to remove it? Thanks for the advice.

    • Michael Bovee says:

      Alicia – It would really help to know more details about the type of debt you are trying to negotiate and settle (credit card, medical bill, deficiency balance), how long the bill has gone unpaid, etc.

      Paying an old debt in full does not generally get it removed from your credit reports. But anyone reporting must furnish accurate, complete, and current information. That means updating the debt is now zero balance. That is often as good as it gets. But it does not give a new 7 year clock to the negative info. And some credit scoring models no longer factor in paid collections (Vantage has one model, hoping FICO offers a similar model soon too).

      • Thank you for the response. I have one collection balance since 2008 for $667 (unwilling to settle or negotiate), another is a cell phone bill of $305 and is a year old, dish network for $366 that is 3-4 months old and a medical collections for $100 that is 4-5 years old. I plan to pay them off soon and have the money to do so, just wasn’t sure how the collections paid in full would effect my credit score. Once I pay the bill off can I ask for a letter that the collection balance has been paid in full and what should be an acceptable time frame for me to rec’v such letter? Thanks for your help.

        • Michael Bovee says:

          Alicia – You would get the most from paying the accounts that went into collection in the last couple years. You should be negotiating your settlements and payoffs first, getting that agreement in writing, before sending payments of any kind out (in most collection cases like you have). If there is any debt collector you struggle with, post an update comment here for feedback.

  57. I have a debt that I’m trying to pay off. I offered them the amount in full if they would remove it from my credit report entirely – they said they couldn’t. I then offered to pay off the bill in full if they would list on my credit report “paid in full”. They said that they would do this, but that they could not send a letter agreeing to it before hand. I’ve read everywhere that you need to get it in writing before making the payment. They said they would send the receipt after the payment, but that was all. They said they were under regulations and could not send out the letter. The amount is for a medical bill for roughly 3,500.00 and was collected 4 months ago. What should I do?

    • Michael Bovee says:

      Will – I do have feedback to offer, but want to be sure I understood what you shared. Did you pay the 3500.00 4 months ago, or you have made no payment at all, but are ready and willing to?

      • I have made no payments but I’m ready to.

        • Michael Bovee says:

          Okay. Do not expect any benefit to your credit report from making monthly payments on the collection. But you mentioned being ready to pay in full, and taking that route, any furnisher is required to send only accurate, current and complete info to the agencies. They are not doing you a favor, they are doing what is required. It can take a month or two for all of that. But you want proof of payment and a letter agreeing to same (or a receipt). This way, if the collection agency does not update the credit reports, you can do that with your own dispute.

  58. I have an old utility bill that I would like to pay off. The date the first delinquency was reported was 4/2009, the account has had no activity since then. However on my credit report it is showing as an open account and the date it was last reported was 12/6/2013 (it’s hitting it every month). My question is this…I contacted the utility company directly and they offered me a settlement of 20% off my balance. I currently owe roughly $900.00, with the settlement offer I would owe $771.00. I asked for an agreement, letter, statement, etc. stating that once I paid the 771.00 my account would be settled. They stated they did not and could not provide any documentation once I settled my account. I don’t feel comfortable paying this much and not receiving any documentation, I’m not sure what to do.

  59. Hello. My husband and I are trying to buy a house but before we can close we have to settle and release a judgment. We hired an attorney who drafted an agreement that included a signed agreement date and deadline for release. Our attorney said the other party accepted our offer but the deadline has passed and we have not received a signed agreement. In the meantime, we are still being billed by our attorney. Do we walk away from the deal?

    • By the way, the judgment is 7 years old. My husband is 71 and I’m disabled.

      • Michael Bovee says:

        Michelle – Who is the judgment creditor, and did the deal involve a single lump sum payoff for the judgment that is less than the balance owed?

        • Fireside Bank was the original creditor for a vehicle we voluntarily had repossessed in 2007. We lost our home and vehicles because we lost half of our income. Cavalry Portfolio filed a judgment against us in 2007 and has since garnished my husbands wages for approximately $8,000. The garnishments stopped and we thought it had been settled at that point. When we tried to purchase a home, the judgment could not be released because Cavalry did not report any payments and refused to release because they said we still had an outstanding balance. We hired an attorney to get a lump sum settlement which in an email, they agreed to accept. They did not sign the agreement letter served to them by our attorney which had a deadline of January 29, 2014.

  60. Also, $3,000 is less than the balance owed although the amount garnished and the $3,000 offer would be close to the amount left on the original contract. I do not know how much they sold the vehicle for but there was a credit on our account of $2,500 or so. The balance owing is interest and attorney fees to the best of my knowledge.

    • Michael Bovee says:

      Okay. If I were in your shoes, and had already paid the attorney to progress this far, I would hold tight. If the deal is not completed in the next week or so, post an update.

      Are you under the gun with a closing date or anything like that?

  61. I have a credit card debt from Wells Fargo ($7000.00 from 2008) that is in collections with ASSET ACCEPTANCE LLC. They sent me a letter to settle in full for $3200. I can not come up with the total amount.. I called and they then said if I paid $1100 before the end of February they would settle the debt for a new total of $5000 as long as I made $100 payments monthly.

    Here is my concern. They said they would only put something in writing with a paid in full settlement and nothing in writing when payments have to take place. I asked about my protection with the “agreement” being pretty much verbal. They said their calls are all recorded and that would be my remedy if something other than what we agreed upon should happen.. and said again they would “…only provide something in writing if I settle in full…”!?!?

    • Michael Bovee says:

      Jeff – As you can tell from the critical report, and all of the comments, I am a huge fan of getting everything documented. An alternative is to record all of the agreement in a phone conversation yourself. Tell Asset Acceptance you are recording the call right out of the gate, and because they are unwilling to document your settlement. Get all of the details covered in the above report outlined to you verbally. Identify the recovery person on the other end of the phone etc.

      Later this year I believe the CFPB will include documentation of payment plans and settlements as a requirement of all debt collectors and debt buyers in new rules for the industry. Right now that is only a state specific requirement (with few requiring). Not that this helps you right now (more for later readers).

  62. Our closing date is Thursday. We heard from the attorney and it appears they filed something in August (hiring the attorney that garnished our checks the first time) to do so again but that attorney withdrew from the case on January 16th. Our attorney also said the attorney in charge of the judgment is revising the agreement (which means they are most likely going to ask for more money). This means we will definitely lose our money on the house and not be able to close.

    • Michael Bovee says:

      Michelle – One suggestion, if you have the resources available, would be to pay the judgment balance directly to the court and expedite satisfaction that way.

  63. We don’t have the resources.

  64. Hi Michael,

    I’m trying to Settle a debt with Harvest Credit Management. I’m dealing with The Moore Law Group. I do have a judgement againts me because I did not show up to court. They are willing to settle with me. They sent me through the mail a letter of Amended Payment Agreement for a settlement letter. I was wondering if you could take a look at it to see if it’s a good letter. I would hate for something to come back to bite me later. The letter does not state that this will be paid in full… or from how I interpret it. I called them and they said it is a standard letter and that it won’t be paid in full because it’s a settlement for a lesser amount. They also told me to have someone take a look at the letter if I was not comfortable.

    Who or what can I do to make sure the letter is good?

    Thank you so much.

    • Michael Bovee says:

      Cheryl – I am happy to review the letter and share my feedback. You can send me an email with the letter attached, or we can use email to coordinate your faxing or mailing. My email address is the one you receive comment notifications from.

    • Michael Bovee says:

      Cheryl – I reviewed the settlement documents you sent to me today. That is a great settlement on a judgment with Harvest Credit.

      I see nothing that would concern me if that letter were one I were acting on for myself. You can, and should, run this by your own attorney in order to proceed with absolute confidence.

      Good Job!

      • Michael,

        Thank you so much for taking a look at it. I currently do not have legal counsel. Although, it’s always a good idea.

        Thanks again,

  65. Hey Michael,
    Just off the phone with MRS. I read your page before calling them. I have debt from Verizon for 450.00 and they sent a settlement for 112. I asked for a settlement letter to be sent and they denied one existed with their company. It was stated that my offer is “the letter”. It has everything you listed on it, accept any words of “satisfied” or settled in “full”. The manager got on the phone and insisted they would send a letter 2 weeks after my payment is made. I told that is your word and that is my money. That I would like an agreement that this will be final and won’t be sold to another collector and can be cleared from my credit. She said the letter is approved by a lawyer and they don’t send anything not approved and cannot send any settlement agreement letter. She said if I don’t believe her then I won’t be making this payment and will continue with the original debt. Its due 2-16-14. Should I send it or what can I do?
    Thank you,
    A

    • Michael Bovee says:

      Amy – How does the letter reference the payment? Does it say settled? Getting hung up on the word “full” is not necessary in a lot of instances.

      I am not sure why you are asking for a letter stating that the rest of the balance will not be transferred or sold to another debt collector. Where did you read that is something to look for? It isn’t. That part is inferred in the settlement. If you have to deal with a mistake later where something like that does happen, the settlement letter and the proof of timely payment is what you use to deal with that.

      Most collection agencies do not do pay for delete, which is what you are looking for when asking for the account to be cleared from your credit. The account should be updated to show a zero balance owed though.

      It is true that these letters with larger collection agencies, like MRS Associates, are approved for use by legal counsel. The collector on the phone, nor the supervisor, or the supervisors manager etc., is likely going to be in a position to make adjustments to the language in the agreements they use. If you are holding out for the changes you referenced wanting, you will likely not be settling this with MRS.

  66. Hello. I have enjoyed reading your articles and comments/responses left!
    I do need some clarification and help though, if that is all right.

    I have some debt.. mostly student loans in the consolidated amount of 13,000 thru myfedloan. I am fine paying the payments for these as I am on income based repayment and qualify for 0$. the next largest debt is a lab fee left over after a student loan direct with the school. its 1500$ thru Indiana university-purdue university of Indianapolis. it is in collections status. I contacted the lender directly since the collection agency was not negotiating well with me. I was able to get a reasonable payment plan. last debt (that I am aware of) is a collection notice I received yesterday for 425$ from imc (state of Indiana which I live in). I am pretty sure its medical bills-just not totally sure. I would like to settle for 25% with collection agency.

    First question: with my debt of 1500$ could I still try to negotiate this? or can I not since I have agreed and made payments per payment plan?
    second question: with the last debt mentioned, would I be able to settle with my own letter via email for paper trail? I would like deletion as well.
    Third question: if you have any further advice or comments about my situation I would love to hear it! Even if there is something you advise about my student loan debt.

    thank you for your time and words of advice!

    • Michael Bovee says:

      SarahL – It is not all that common to settle medical debts for 25% of the balance. Not impossible, and more possible the longer the debt sat there collecting dust, but higher percentages are something to be prepared for.

      The 1500 private debt is better negotiated when payments are not being made. If you can afford to pay, you should consider that. If this one is not on your credit report, and the other ones are rehabbed, and no longer report late, one medical collection is not all that hard to bounce back from credit wise. If you do work toward settling this debt instead, I find having the agreement on their letter head to be better than a letter you create. Also consider that, in all likelihood, your letter will not conform to that institutions policies for such things. You will typicality not get an agreement for deleting the negative from your credit report. It is not impossible, but nearly so. Who is the debt collector?

  67. Hello Michael,

    I have a question concerning an order of judgement and information subpoena. I have received paper work in a name similar to mine but not my correct name stating a judgement has been filed against me and I need to file out then return the attached subpoena to the Law Office of Kevin Z. Shine, PLLC on behalf of CACH LLC/GE Money Bank. I recognize the original creditor and account/credit card number but they have a different first name listed. The amount last due to GE Money Bank in my actual name was $2,700 and this judgement is for $2,900 with 9% interest until paid. I have never spoke to the Law Office regarding the account but have collected $3,000 and to pay the judgement because the original debt is mine. My issues are: Do I contact them to have the information corrected in my actual name and then pay? Do I contact the court the judgement is file through to have information updated/change? If I obtain a settlement/paid in full letter and pay the judgement in this other name will it legally settle the actual date in my actual name? I just want to clean up old debts while having any legal document needed if something should come up down the road.

    Thank you for your time,
    Marie

    • Michael Bovee says:

      Marie – You have an interesting situation here. And because you have the money in hand to pay this old debt off, I would expect the attorney that sued you with the wrong name may be your advocate in this. It is the entire court record that shows the wrong name was used through out right? Not just this last document you received? If so, you could call them and let them know of the issues and that you can pay your old bill, but would prefer the case in the wrong name be vacated, and an agreement drafted that states as much prior to any payment.

      You could also talk about this situation with an experienced consumer law attorney, and ask for their help. I would be upfront about the fact that you have the money in hand to pay the bill off, but because you were sued under the wrong name, would like the court case gone. Ask if they can represent you in the effort to settle and vacate for a reasonable price.

      If the settlement you have in your hand is all you want to deal with, and are not into getting the underlying misnamed case corrected in anyway, tell the attorney suing you the issue and get the letter corrected to show your name, account etc.

      • Thank you for your quick response! Yes all letters, summons complaint, and judgement are in the wrong name. I can just call explain my issues and ask they vacate? What should I be asking for in return as proof just a corrected settlement letter? Sorry for all the questions, I want to feel as prepared as possible before I call them. I would love to get everything corrected, paid, and get some sleep. I’m sure I would like to address the name issue if it is noted on my credit report. I have been holding out pulling me reports because I was aware of this old debt and wanted to pay it before checking my credit. I do find it a bit unnerving that a full legal case with default judgement can be processed under the wrong name.
        Thanks again!
        Marie

  68. Hello Mike,

    I received a call from a representative at Walter Riley and Associates regarding a debt from 2001. The creditor then was 1st Premier Bank for a credit card. The settlement amount is $335.37. The account was sent to collection in 2001. This account is no longer on my credit report. The representative informed me that I must pay off the account at the settlement amount of $335.37 or I would be sued and the total amount at that time would be roughly $5000.00. My concern is that I am unable to locate Walter Riley and associates through any search engines. I have called the 855 number given to me and all the recording says is “you have contacted legal services.” Any attorney’s office that I have contacted over the years always says there name on their message. I did make payment arrangement with them over the phone which begins a month later but have yet to receive any documentation from them via mail, fax or e-mail. Is there a statue of limitation in California for such accounts?Am I still liable for this amount from 1st premier bank dating back to 2001?

    Thank you for your time,
    Frances

    • Michael Bovee says:

      Frances – I do not like what you described having happened. Credit card statute of limitations (for a legitimate collection lawsuit to be filed) in California is 4 years. Legitimate debt collectors know that. Having a collector threaten to sue on a 13 year old debt means they could be a flat out scam, or are willing to violate consumer protection laws. Either way, not an outfit I want my money going to. If it were me, I would:

      Call my bank, explain what happened, ask for their advice about stopping payment, or how to prevent anything from processing. You may not like this, but your bank may advise you to close your account and open a new one.

      Call a consumer law attorney about suing this outfit for collection law violations if they think that is a good idea. Many attorneys that specialize in this area of law (FDCPA violations), take cases on a contingency, so you are not charged a retainer. I can email you contact info if you like.

      File a complaint with the CFPB.

      I would approach all of this in that order.

      As far as being liable… debts do not really go away. Unpaid bills do fall off your credit report after so much time, and lawsuits to collect become time barred. But the debt is there still. What you choose to do with the debt after those lines are crossed is more of a personal decision, at least that is the way I look at it.

      • Frances says:

        Hi Mike,

        Thank you for replying to my post. Thank you for clarifying my questions. I gave the representative a prepaid card number with a zero balance due to this not sounding legit. I would really appreciate any info you can share with me to resolve this issue.

        Thanks again,

        Frances

        • Michael Bovee says:

          Frances – Contact an attorney in California with FDCPA experience. I will send you contact info to one you can talk to about this – no cost for the consult. That is my best suggestion for what to do next about this.

          Also, do not allow yourself to be pressured in to giving bank, debit, or credit account information out to a debt collector over the phone.

  69. Hi Michael,
    I had an approval for a medical procedure and the insurance co is now denying payment to the hospital and anesthesiologist (paid the surgeon though). I am continuing to try to appeal the decision with the insurance company. Unfortunately, the anesthesiologist sent the bill to a collector. The bill was originally $2224 (I know this is what they charge the insurance co and not the patient if they have no insurance). I feel pressured to pay and do not believe insurance will resolve this prior to the 60 days before the collection agency reports to the credit agency. I have gotten the collection agency down to $1668. They want me to pay the bill that day by 6:00 p.m. I didn’t do it – I need more time to figure this out. I asked for a settlement letter and they said they do not provide settlement letters and that their recorded calls are proof of the agreed amount and debt being paid. Everything I read makes me uncomfortable with the fact that they won’t provide a letter. The agency is Nationwide Recovery Service.

    I have tried to work with the anesthesiologist’s office to get an adjusted bill for patients that pay out of pocket but they say it’s out of their hands, I have to work with the collection agency.

    Any advise you have to offer is surely appreciated.

    • Michael Bovee says:

      Megan – If you do end up settling with Nationwide Recovery you can record the call with them. Let them know you are recording and why. Hit all the highlights covered in the report above, get any questions answered, and clarity you need. Keep a copy of the recording stored in several places (on hard drive, and a thumb drive, burn a disc). And also have a record of the payment transaction from your bank account.

      1668.00 may be as good as it gets.

      • Michael – I appreciate your response. It is so nice that you are doing this for people. Thank you so much!

  70. I am trying to settle a account with portfolio recovery associates the will only send me a settlement letter through email and then after I make the payment send the letter through the mail what should I do.

    • Michael Bovee says:

      David – Email is okay in some instances, especially when the Portfolio Recovery settlement agreement is an attachment to the email (so just like a letter they may mail). Post a comment with the from address, and compare the email agreement to the content in the above report, and lets go from there.

  71. Hi Michael, I have a judg.ement lien on my property in Kentucky from Capital One/Mapother and Mapother for $2000.00. I am selling the house and just received an offer on it and accepted, with a closing on 4-4-2014. I am going to see if they will settle for less. Once an agreement is reached, how long does it take for a satisfaction of judgment to clear at the court house? Can I go to the attorney and settle with funds at their office. And get a satidfaction letter from them if they agree. ? Can I take that to the courthouse and get the lien removed? Or should I just wait until closing and pay it off with proceeds? Will the pay off clear in time not to stop the closing? Suggestions? Thanks

    • Michael Bovee says:

      Pete – I have had customers be able to walk in and fund a settlement offer with the local attorney. It really only expedites the mail lag time, and would not expedite anything if payment was made over the phone. At least… not in your situation (as long as you have documentation in hand prior to payment).

      The part that is going to take the most time is updating the court record. I prefer that the plaintiff do it, but you can file with the court too. There is also the documentation and proof of payment you have that you can give to the title company.

      Settling with Mapother and Mapother is worth a shot. At the end of the day, like you said, title will send a demand request and pay the whole thing off out of escrow. Just be sure they do not send that demand request prior to your negotiation efforts. Settlements for less in this scenario do not happen when the other side can see all of your cards.

  72. Thanks Michael, Just settled with Mapother for 1500, well its something. But only thanks to your site. They did not want to send a settle letter until I mentioned this website and they quickly changed their tune. THANKS AGAIN FOR YOUR GREAT SITE ITS AMAZING WHAT A LITTLE KNOWLEDGE WILL DO!

  73. Is it legal for a creditor to refuse to send you a copy of your last settlement letter ?

    • Michael Bovee says:

      Mario – Can you be more specific about what you have going on here? Is this something where you negotiated a deal, made the payment(s) accordingly, and are not getting the documentation of all of this that was promised? Are you asking a creditor to send you a prior settlement offer they mailed to you that was never acted on? Something else.

      • It was a previous offer that I did not act on.

        • Michael Bovee says:

          Mario – You should check with an attorney in your state, but I am doubtful that there is anything illegal about the creditor not resending you a settlement offer.

          If the offer was something you could not take advantage off then, but are better able to today, and they will not make that same offer, lets talk about that. What percentage of the balance are you able to offer as a settlement? How long has it been since you last made a payment? Are you dealing with the credit originator, or a debt collector at this time?

  74. Hi Michael, We have 6-8 credit cards which we are to the point of being late. I had 2 surgeries the end of last year and we are drowning in debt. We are currently paying our mortgage and car loan 2-3 weeks late (doesn’t affect our credit, but is accumulating fees). I called a couple of the cc companies last month to see if they would work with us (we haven’t been late yet). I’m finding that they won’t do anything to help; from what I’ve heard, we have to be late. We’ve looked into debt management companies vs trying to settle them ourselves. We don’t want to pay the add’l fees associated with DM companies.
    The companies we are dealing with are Capital One, USAA, US Bank, and a few department stores. What can we expect as far as a settlement with the credit card companies. Can we expect that they will offer a settlement or will we have to wait til it goes to a collection agency/debt collector? We really do not want to end up in a lawsuit over any of this. Do you know if the companies we’re dealing with normally work with the customer or would we benefit to go thru a DM company? Thank you for your time!

    • Michael Bovee says:

      Kerri – If you are up to it, I highly recommend negotiating and settling the debts yourself. When you save on professional fees, that money helps you to settle your debts with USAA, CapOne, USbank and the others that much faster. The faster you pay off the settlements, the less risk of aggressive collections, the sooner your credit can start to bounce back, the less stress….

      I would prepare to settle CapOne at around 50% (maybe with them direct before charge off).
      USAA I typically estimate at 40% settlements, but the numbers have come in more favorable than that.
      US bank has tightened up a bit. My target here would be 40%, but would start lower and see if your file is one that would do better.
      You would need to post your department store cards to get some feedback.

      Those estimates are when settling direct with the lender, and before charge off. Once an account gets dropped into a collection bucket (see this post) your settlement percentages, and the best way to time your efforts, can all change.

      Those banks you listed would all willingly work with you. I have settled debts for customers with each of those banks, and I would not say they have a preference per say, but you can get as good a deal as I can, or probably any other debt management company, so take that route first. Hire a pro if you hit a road block, or if you are not confident of your ability to negotiate.

      Just curious, what are the totals of all of these credit card debts, including the department store cards?

  75. Thank you for such an informative site!

    I had a cc debt to Citibank that was apparently sold to Atlantic Credit / John Frye. I requested validationa and recently received a packet they got from the original creditor. I am unsure how to proceed. They requested that I call them, because I told them not to call me., I had an attorney working on thw possibility of bankruptcy, which I have so far been able to avoid.

    I want to settle (10~15 percent), but reading the above comments, you indicated that the offer should come from them. Should I send a letter requesting a settlement offer? Call and ask for one? We seem to be at a bit of an impasse. I definitely want to avoid getting sued.

    Thank you in advance.

    • Michael Bovee says:

      JT – If you want to settle you will have to be more realistic about the amount you need to come up with. 10 to 15 percent settlements are just not common.

      I prefer settlement agreements be on the creditor or debt collectors letterhead. Most negotiations and settlement dialogue should be done over the phone, not through the mail, in my experience. If it were me, I would call them.

      If you do not mind me asking, if all you want to do is negotiate an affordable settlement, why are you sending a debt validation request and telling debt collectors to cease calling you?

      • I requested the debt validation letter based on the advice I got from my attorney, and all communication was supposed to go through him, which was why I asked them not to call me. Now that it is evident that I cannot file for bankruptcy (long story), negotiating seems the only way to go.

        What is a common amount for a lump sum payment? I was given to understand that the amount was less if it was a lump sum rather than a payment plan?

        Thank you for your advice, I clearly have gotten some incorrect information!

        • Michael Bovee says:

          Debt validation has its place. But when you want to settle, or otherwise resolve a debt, when you know it is yours, requesting validation can actually be counter productive. There are some who promote sending a debt validation letter every time all the time, but more to deny the debt, or attempt to never pay. I am sure your bankruptcy attorney is not in that camp.

          A realistic settlement amount would be 35 to 45%. How long ago was the last payment made to Citibank? And yes, a lump sum offer is typically going to have a better chance of succeeding, and of being lower, than a settlement offer with monthly payment terms.

          • The last payment to Citi was 12/2012. It was charged off in July 2013 and I received the first notice from Atlantic that they *owned* the debt was in August, I believe. They aren’t working for Citi, they bought it.

            I read somewhere that they only hold it for a certain amount of time before selling it again. What kind of timeline am I looking at to be able to work with them before they sell off to someone else?

            • Michael Bovee says:

              Some debt buyers rarely, if ever resell debt (PRA and Midland being larger examples of this). I do not know whether Atlantic resells, and if they do, when they look to cycle out of non performing purchases. I would look to gauge the timeline for the account moving by how long Frye has been contacting you. Can you pinpoint the first time you heard from Frye, and was that by phone or mail?

              • It was by phone, they called my cell and didn’t leave a message, so called someone else (that they weren’t allowed to according to law). That person then called me and told me. A few days later I got a letter from them. That was in August 2013.

  76. Hello!
    I am a bit confused and could use some help!
    I am trying to clean up my credit report, its very poor. I have been paying off debts and been checking my score. I just saw a collections status from LB GRAY LLC, and its from 10/2012. I thought I had paid this off, but there is still a balance there. However, I have NOT received ANY letters to collect this debt, which is part of why I didn’t know there was still a balance. How should I go about fixing this? Id rather not pay it since I thought it was paid and have not been receiving letters.

    • Michael Bovee says:

      Sarah – Do you have an agreement that covers the settlement, and proof that you paid? If so, your request for that info to be corrected should go off with out a hitch.

  77. We are trying to help our son resolve some credit issues with Verizon. He received a debt collection letter from Stephens and Michaels for more than $1K. Our son does not have all the paperwork from the original bill and says that Verizon didn’t credit him with amounts that they owed him. He cancelled the contract with Verizon years ago and paid extra to end the contract. Stephens and Michaels offers a one time settlement of $400. Do we need more proof from them that this is the end of the problem?
    Please advise. We have little time to deal with this. The letter is dated March 12, 2014 but wasn’t received until around March 25th, not really sure. We were planning to pay the $400, but not if it doesn’t end the dispute. Just not sure what the best way to handle this.
    Thank you in advance for any help you may be able to provide.

    • Michael Bovee says:

      Gerri – I would need to see the settlement offer letter. Are all of the elements I cover in the above report found in the settlement offer? Also, is this debt appearing on your sons credit reports in any way (whether by Verizon or a debt collector)?

  78. Hi Michael I was reading some of the similar situations that I am experiencing right now. Almost 6 months 4-5 months ago I enrolled in a settlement program for 3 cards. Amex approx. 14000, citi4,ooo and target 2000. Right now i am schedule for non trial jury on May 29 by AMEX. believing the settlement program will work for me. I am worried that my other credit cards will summon me. 2 weeks ago I dropped the target not to include anymore on the settlement. Do I have the right to drop the citicard to avoid future summons and do I need a lawyer for amex? Can the settlement program I enrolled will negotiate with amex even though I have to go to court. I just want to pay what I owed monthly or settled without going to the court. I need your advice. Thank you.

    • Michael Bovee says:

      Del – How much money can you pool together, from whatever sources, to get these settlements done in a hurry? If only able to do one at a time, how much can you pull together to handle the AMEX account?

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