Debt Bytes Blog

What to Know About CKS Financial Before Dealing with Them

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CKS Financial is both a debt collection agency, and a debt buyer. They will purchase debts and try to collect on them like other debt buyers do. They also act as a contingency collection agency for lenders and other debt buyers. What you decide to do, and when, if you are dealing with them, can vary depending on whether they purchased your account or not.

The accounts CKS collects on are typically from unsecured loans, and mostly from online lenders, not banks.

Things to know about CKS Financial. They are more than just a collection agency.

The nature of what CKS does as a business, regardless of whether they bought your debt, or are collecting for who owns it, means you are typically at least four or more months late on your loan before you would ever hear from them.

Once you are at least four months late on a bill, and want to resolve the account, I typically do not recommend monthly payments on the full balance. At this point, you have already taken the credit hit. Enrolling the debt into a debt management plan through a credit counselor would not make much sense, and could prolong the credit score pain.

For resolution, I tend to suggest negotiating a lower payoff with CKS Financial, or looking into your qualifications for chapter seven bankruptcy.  

Settling with CKS When They are the Collection Agency

Most of the collection activity I have seen when settling with CKS Financial has been when they are collecting for a debt buyer like Velocity Investment LLC. They do collect for others too.

When CKS is collecting for someone else you tend to have to target settlement results that are available based on the parameters from who they are collecting for. They do not get to dictate the results.

Two things to take into consideration when settling with CKS Financial will be:

  1. If you have a lump sum of cash to work with we often get better settlement outcomes from CKS.
  2. If you need time to pay your settlement (a couple of years to pay is possible), you may end up paying more for the settlement.

Lump sum settlements with CKS are best, but if you cannot swing it, taking a deal that you can pay over time is still a good idea. It can mean you remove the risk of being sued for collection by whoever it is CKS is collecting for.

Resolving Debt with CKS Financial When They’re the Debt Buyer

If CKS Financial purchased your debt directly, say from Lending Club, they will who determines what they settle for. They do not have to go anywhere else to get a better than average deal approved.

That said, they are typically going to be acting like any other debt buyer would. This can mean they are paying close attention to things like your credit reports to help them determine the type of collection target you are.

This is not unique to CKS Financial, or debt buyers generally. Most anyone in the debt collection food chain can access your credit reports to see if you are current on a mortgage, auto loan, or credit cards. The more accounts you show current on, the better a collection target you could appear to be.

Striking a lump sum settlement deal with CKS when they bought your debt, just like when they are collecting for someone else, may be lower than if you need to make installments on the settlement.

Your Risk of Being Sued by CKS

If CKS is working for someone else that owns your debt, you are not at risk of being sued by them. They are not a collection law firm that would file against you in court. That risk comes from the debt owner contracting with CKS to try to collect from you.

Like I mentioned above, there are risks of being sued, which is why settling for less and making monthly payments can be a good idea. To prevent any legal collections.

If CKS purchased your account, you do run the risk of them tapping into the huge network of debt collection law firms around the country in order to take collections to the next level.

Our success with settling debts CKS collects on, whether they are working for a different company, or bought your loan themselves, makes resolving the account affordable, and prevents collections from escalating.

If you are already hearing from a collection law firm related to a CKS Financial debt, we can often help here too.

You can schedule a time to talk with me using the box at the bottom of this article, or the Get Debt Help tab at the top of the page. You can also request a settlement estimate below.

CKS Financial on Your Credit Reports

As a collection agency, working on a contingency basis, you may not find CKS Financial on your credit reports. If they are not the owner, or purchaser of your debt, they may be leaving the credit reporting to someone else.

If you resolve the account with CKS when they are collecting for someone else your credit reports should be updated to reflect the account is no longer owed by the owner.

If CKS purchased your unpaid loan it is possible to see them showing on your credit reports. If you settle your account with CKS they would then be obligated to update your credit reports.

Like I have mentioned elsewhere, a debt collector like CKS Financial may appear on your credit reports with a balance showing unpaid. But that means the original creditor, who may also still be on your credit reports, should then show a zero-balance owed to them.

In other words, you should not have two places reporting the duplicate negative item with a balance owed to both of them, as that would not be accurate.

If you have questions about dealing with CKS Financial you can schedule a phone call with me or submit your concerns using the boxes below. You can also post comments in the space below and get feedback right here on the site!

Double Jeopardy on Your Credit Reports

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If you are looking at your credit reports, and seeing a duplicate account appear on the same report, you could be a victim of what I refer to as double jeopardy. This can skew your debt to income ratio, and cause other domino affects. It can also make it look like you have more unpaid collections than you actually do.

One of these duplicate issues is easy to fix, while the other seems unfair, but sticks to you for up to 7 years.

Some of you may be wondering how an unpaid collection account even gets to appear on your credit more than once, and I will get to that below, but first…

What is double jeopardy if not just a question on a game show?

The “double” is an extra credit reporting trade line. A duplicate entry for the same thing.

Double Jeopardy: when you're credit report is showing double entries and you aren't sure why. Let us help.

The “jeopardy” can come from the duplicate entry jeopardizing how much you pay for credit, or whether you can get credit at all!

Fixing Duplicate Credit Reporting Mix Ups

In over two decades of working with people to fix debt and credit problems, I do not see much trouble with getting a mistaken double entry deleted from your credit. You do not need to hire a credit repair company for a simple mix up like this. You can quickly and easily dispute incorrect items off your credit yourself.

Should you bother getting something off your credit if it is not necessarily a negative?

I would.

You may think there is no harm with leaving a positive duplicate on there if you are paying your debts on time, all the time. I can see viewing it as another feather in your credit cap. But the exact same balance showing as owed on your credit reports could skew your debt to income ratio on a future loan, or credit card you may want to apply for. That could result in:

  • Paying a higher interest rate than may have been the case otherwise.
  • Getting approved for your new credit card, but at a lower credit limit.
  • In some instances you can even be declined!

Reviewing your credit at least once a year is just good credit hygiene! Even when you are not looking for new credit. This is a perfect example for why you should do it!

There are many free credit monitoring apps out there, like Credit Karma. You can also get your credit reports from the three main credit bureaus for free every twelve months. During Covid you can get your free credit reports weekly.

When Debt Collections Show Up Twice

Here is where I see the most common type of duplicate credit entry, and the one that comes across as unfair and punitive. One debt collection item on your credit is bad, and it stands to reason that two is worse. Or is it?

Lets say, for example, you have an unpaid credit card with Capital One for six thousand dollars. You could no longer afford to pay them monthly, so you stopped sending any money to them 8 months ago.

Next thing you know you see Portfolio Recovery and Associates on your credit reports. They are now reporting your Capital One balance as being owed to them. It is a duplicate of an already existing negative item on your credit.

If this happens Capital One can still legitimately report that you did not pay them for all those months. But once they sell the legal rights to collect to that debt buyer, they should then show a zero balance owed to them. The debt buyer, in this case PRA, would legitimately be showing the money is now owed to them.

The above example is going to seem unfair to many of us. We are getting two negatives on our credit, when there should be only one. Unfortunately, it is legitimate that you see these two negatives.

It Could be Worse than Double Jeopardy

Before summer of 2017 you could have seen TRIPLE jeopardy if you were sued and a court judgment for this same Capital One account appeared in the public records section of your credit reports.

Luckily, most state civil court judgments no longer appear on our credit reports.

If both Capital One and the debt buyer above were reporting negatively on your credit, and with each of them showing a duplicate balance due to them, that would be double jeopardy!

You can dispute the duplicate and inaccurate information with the credit bureaus in the same way I refer to above.

Both Capital One and the debt buyer will organically fall off your credit reports after 7 years from when you stopped paying the bank. The debt buyer does not get to show on your credit longer than the bank that sold them the debt.

In fact, the particular debt buyer I used in the above example, Portfolio Recovery Associates, currently agrees to be deleted from your credit once you resolve the debt with them. So while PRA could take themselves off your credit before the 7 years is up, Capital One is not likely to. Capital One would still be showing with a zero balance owed in this example.

You can still accomplish most major credit and finance goals if collections on your credit are not showing a balance owed.

If you want to talk to me about any of your debt and credit issues you can post in the comments below, schedule a call with me, request a settlement estimate, or submit your own question using the boxes below.

What to do if Your GreenSky Loan Becomes a Problem

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GreensSky loans are primarily unsecured, and made for home improvements. The loan amounts can reach above fifty thousand dollars. How much your monthly payment is will depend on the amount of your loan, and the interest rate applied.

The larger the loan, the harder it can be to keep current with the payments. When financial setbacks occur, we sometimes must make tough decisions about who will get paid, and who will not.

What happens when you fall behind on your GreenSky loan will often vary depending on who underwrote it.

GreenSky Lending Partners

Technology companies have grown into the lending markets. GreenSky is a good example of this. They are the platform you use to qualify for, and manage your loan, but there are several different banks behind these loans.

Some of the banks Funding GreenSky’s loans include Fifth Third, Truist, Synovus, and BMO Harris.

There may be a few smaller lending partners too. You can post in the comments below for feedback about these larger lenders, or any smaller one you may have.

Getting Lower Monthly Payments from GreenSky

All of the larger banks listed about may have a hardship payment plan you can talk to them about. This could help you lower your monthly payments temporarily, or even for the life of the balance.

The hardship plans help by lowering your interest rate and amortizing your pay off for the loan over no more than a 5 year period.

If the bank that funded your GreenSky loan also issues credit cards, they are accustomed to offering lower monthly payment plans through a nonprofit credit counseling agency. They may even suggest you contact one of the many national agencies rather than taking you through the process to see if you qualify for lower payments themselves.

One of these Credit counseling agencies could potentially help make your other unsecured debts more affordable, thereby freeing up monthly cash flow to meet your GreenSky payments.

Settling Your GreenSky Loan for Less

You can settle most unsecured debts for less when you are late several months on your payments, and GreenSky loans are no exception. How you go about settling your GreenSky loan will depend on the bank that actually funded your loan.

As mentioned above, there are 4 larger banks that fund most of the GreenSky loans.

There are some things that banks do similarly when it comes to settling for less, and there are some things that will change from one to the next too. I will cover the similarities between Synovus, Truist (BB&T), Fifth Third, and BMO Harris first.

  • Most banks wait until you are 4 months late (6 months on credit cards) before they charge off your loan balance and subject your unpaid account to their collection policies and procedures.
  • Most banks will have some variation of settlement for less discussions before they charge off your account and place it for collections or sell your unpaid account to a debt buyer.

Check out my coverage on how banks tend to drop accounts into different buckets for collection. It will help you understand why you may be more motivated to settle a debt with the original lender, or why it may pay to wait to settle your debt with Fifth Third, Synovus, BB&T, or BMO Harris later on.

The Four Paths For Collection

  1. Assign your debt to a collection agency.
  2. Sell your debt to a debt buyer.
  3. Sue you to collect.
  4. Do nothing other than to hold your account internally.

We can settle debts with these lenders at any point in the life cycle of your debt.

There are strategic reasons to target earlier settlements, especially when you have the cash resources to settle early on.

There are other times you want to wait longer to settle, such as when you do not have a lump sum to work with and would benefit from the longer term settlement payments that may come from negotiating with a debt buyer or a collection agency.

There are additional layers of complexity if you have more than just your GreenSky loan to settle. You can schedule a phone call with me by clicking the box below, or the Get Debt Help tab above. I will be able to help you understand your settlement targets, and strategic options to get the best savings, and eliminate risks with these 4 banks that likely funded your loan, and your other debts too.

What if your GreenSky loan is secured?

Most GreenSky loans are unsecured, but you may have a secured loan through Truist, Fifth Third, Synovus, or BMO Harris if you took the loan out to purchase and install solar panels.

Sued for Your GreenSky Loan

Like I mentioned above, pretty much all lenders see suing to collect as one of the four options available to them. Your risks of being sued by the lender backing your GreenSky loan is real.

Debt buyers also sue to collect.

You can avoid being sued all together. You accomplish this by having resources at the ready early enough to prevent attorney placement, or over a long enough period to agree to settle your loan using monthly payments.

You can still settle if your loan has been placed with a collection attorney. The deals and terms are typically not as flexible. You can even settle if you have already been sued for collection, but here again, the deal is likely going to be for less savings.

GreenSky on Your Credit Reports

It is normal to see your GreenSky loan showing late on your credit reports once you have missed a payment by 30 days or more. If your GreenSky loan is settled, once you have completed the settlement, it will typically then be updated to show a zero balance owed. It basically shows as a paid collection, and your credit will bounce back from there.

If there is a debt buyer showing up on your credit that means BMO Harris, Truist, Fifth Third, or Synovus sold the legal rights to your debt. These banks would then show late payments, but a zero balance owed to them, as they do not own your loan any more.

When you complete a settlement with the debt buyer they will either update your credit to show a zero balance, or paid collection. And some debt buyers will delete their credit reporting all together, once you resolve your GreenSky loan with them.

It can take 30 to 60 days for the bank or the debt buyer to update your credit reports.

GreenSky Settlement with the CFPB

GreenSky found themselves in a pickle recently due to having insufficient data to show some loans were made with consumer consent. More on that here:

http://insidearm.com/news/00047533-cfpb-fines-greensky-25-million-and-requir/

If you believe your loan would qualify for the type of redress in that report you should consider contacting an experienced debt collection consumer law attorney in your state.

You can post your comments, concerns and questions about your loan, or any of the banks, collection agencies, or debt buyers you may be dealing with in the comment box below. I respond to comments on the site virtually every day. You can also schedule a phone consult with me to talk through your situation and goals privately.

Coping with Freedom Plus Loans When You Cannot Keep Up Payments

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Freedom Plus loans can range from about ten to forty thousand dollars. The interest rates can vary depending on your qualifications when you get approved for the loan. This can make for hefty monthly payments, and can also mean some of us are one unexpected expense away from not being able to make our Freedom Plus loan payment on time.

Liberate yourself from Freedom Plus loans.

If you have reached the point where your Freedom Plus loan is no longer affordable, you do have a few debt relief solutions to consider. I tend to focus on 3 mainstream options when working with someone who can no longer cover their monthly payments on unsecured debts. These consist of lowering your monthly payment through different programs, settling your Freedom Financial loan for less, or hitting the financial reset button using bankruptcy.

I will outline all 3 options below, and with a focus on settling with Freedom for less because payment plans and bankruptcy are more straight forward than negotiating settlements.

Lowering your monthly payments working directly through Freedom Financial

If you are not yet late with your Freedom Plus loan payments, or barely behind (only missed one or two payments so far), and especially if you are only experiencing a temporary monthly cash flow set back, call Freedom Financial.

Talking to your lender over the phone may result in their being able to offer some short term payment flexibility once they understand more about your situation.

Unlike credit card debts, longer term monthly payment reduction is typically not an option on fixed loans Freedom Financial makes. For this reason, if your monthly cash flow is impaired to the point that you will need a more permanent lower payment solution in order to confidently deal with your Freedom Plus loan, I would then look to settling the loan balance for less than the amount owed, or look into your qualifications for filing bankruptcy.

That said, if you have a lot of money going out to credit cards each month, and those are at higher interest rates, you may be able to get those on a lower monthly payment plan, which may free up cash that allows you to keep up on your Freedom Financial loan.

Negotiating your Freedom Plus Loan

If your financial situation has deteriorated to a place where you simply cannot make your Freedom loan payments anymore, and certainly if you are already late a few months, negotiating a settlement with Freedom Plus to pay less than what you owe will often be on the table.

There is some irony to settling your loan with Freedom Financial for less because they were first the debt settlement company Freedom Debt Relief (still are), before they got into the lending business.

At the time of this article, we tend to see better settlement outcomes by negotiating either with Freedom internally, or more recently the collection company your Freedom Plus loan may be sent or sold to.

Settling your Freedom Plus loan with a debt collector

The majority of unsecured debts that go unpaid will eventually get sent out to third party collection companies. Freedom Financial could send your unpaid Plus loan to a debt collector, just like most lenders do.

As with virtually all settlements, what you can target as a realistic outcome is often a combination of who the original creditor is, who the collection company at the time of negotiations may be, how high a collection target you appear to be, and the resources you have available to pay your settlement.

I can help you best determine what your Freedom Plus loan may settle for when I know all of these details. You can post the information anonymously in the comments below and I can post my feedback to you here. You can also click the schedule with Michael box below (or the get help tab at the top), and I can review your settlement strategy with you on the phone.

I do find that most people I have helped resolve Freedom Plus loans have had multiple other unsecured accounts they needed to settle. And it is super important (downright critical for some of us) to prioritize which creditors and debt collectors we resolve a debt with first, second, third, etc.

I can dig into your total strategy with you during the phone consult. You will be able to plan for your settlement much better after our call.

Resolving your Freedom loan with a debt buyer

Lenders may decide to sell the legal rights to collect on your unpaid debts. The debt buying market is huge in the Unites States. If your Freedom Plus loan ends up sold to a debt buyer it can turn out to be a positive, or a negative.

Debt buyers are often among the most aggressive debt collection companies. That is the negative. It means you will want to try to address this account, if you have the resources, or can pull them together, quickly, or at least quicker than may have been the case otherwise.

How low you can get a debt buyer to settle for will depend on the formula I mentioned above.

The settlements we see on Freedom Plus loans tend to be better when you have a lump sum of cash to work with. If you do not have a lump sum of cash to settle with the purchaser of your Freedom Plus loan, settling with payment plans is often an option. How long you can stretch out your settlement payments will vary by the collection company involved, or if your account has been sent to a collection law firm.

Being sued by Freedom Plus

As of this writing we are not seeing Freedom Plus loans ending up in court for collection. This is partly because the loans are somewhat of a newer product, but also can be the result of a strong reputation management strategy by the lending arm of Freedom.

Also, we tend to focus on quicker settlement outcomes when we are working with people, so that helps prevent people we work with from being sued on their Freedom Plus loan.

I will update this article when I see a trend change, but for now, if there is a risk of being sued for this loan, it will be from a debt buyer. And you can avoid that by being proactive with negotiations at the outset of the debt buyer getting the account.

If your Freedom Plus loan does land in the hands of a collection law firm, you can further prevent being sued by proactively dealing with the law firm before they file suit.

If you are sued in court for collection, you have options! Defending the suit will preserve your options. It could also be time to take a serious look at the protections, and cost effectiveness of chapter 7 bankruptcy.

Chapter 7 bankruptcy is a fantastic option to take a look at instead of temporary lower payments or settling your Freedom Plus loan for less. You must qualify for chapter 7, but if you do, think on it seriously. It can help you eliminate more than just this personal loan, but also other unsecured debts you have. And contrary to popular belief, chapter 7 may help you with other credit goals faster than anything else.

Freedom Plus on your credit reports

Like most types of loans you take out, your Freedom Plus loan appears on your credit reports with Experian, Equifax, and TransUnion. When you keep your payments current this is not a problem, and is typically viewed as a good thing. When you fall late with payments though, the credit score damage can be a showstopper for a while.

Once you are late a few months on a personal loan like this, even if you get payments caught back up, lenders do not erase the fact you were late from your credit. This means it can take a long time to bounce back credit score wise, even though you righted the ship quickly. This fact stinks for many of us. It is why I often outline settlement as a strategy to get your credits scores back in good standing quicker than if you get your payments back on track, once you are already a few months behind.

Lenders like Freedom do have to report accurately to the credit bureaus. Once you settle the debt with them, or a company they sent your account to for collection, the loan would quickly show as a zero-balance owed. In other words, it looks like a paid collection. Your credit can bounce back from there, and quicker than most people think, though not as fast if you still have other unresolved collections on your credit to deal with after the Freedom Plus loan is showing resolved.

Co Borrower risks with Freedom Plus loans

It is possible to apply, and be approved for, a better interest rate on your Freedom Plus loan by getting a cosigner. Be careful with how you look at resolving any loan in this situation.

Your co-borrower is at risk of negative credit reporting if you fall late with payments.

They are on the hook legally if you file chapter 7 and discharge your Freedom Plus loan.

Talk over any of these realities with your co-borrower as soon as you can.

Freedom Financial Consolidation Plus loans

Like I said above, this lender was Freedom Debt Relief, a debt settlement company, long before they ever approved a Freedom Plus loan. They helped to usher in an innovative type of loan product to their debt settlement customers that they call the Consolidation Plus loan.

If you took out the Consolidation Plus loan from Freedom you know what I am talking about. And if you can no longer afford to keep those payments up, the same things I talked about above apply.

Yes… you can settle your loan with your debt settlement company for less too!

The irony is certainly not lost when you hire a super high fee company to help you settle your debts, who then loans money to you (those customers who qualify) at a high rate in order to pay your settlements earlier than may have been the case otherwise, but then ends up accepting less than what you owe them on their loan.

Freedom Financials debt settlement arm is its original product, and how they entered the personal finance space many years ago. Their fees are quite high. If you have already taken their consolidation loan and need to settle, it can be achieved.

If you have not hired Freedom, but were thinking about doing so because this loan product appealed to you, I would think twice. Their debt settlement fees are too high, and the loan costs are as well. You may be able to settle your debts for much less, and without taking out a high cost loan.

You are welcome to post in the comments below for feedback, and I invite you to get yourself on my calendar for a phone consult too.

Solve Loan Builder and Swift Financial Payments Affordably

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Loan Builder is a business lender offering loans through PayPal that are serviced by Swift Financial. They offer competitive loans and rates like brick-and-mortar banks do. They are a good option to consider while you are implementing your business plan.

I regularly see Loan Builder offers and would put them in the mix of lenders I would look at if I needed cash to pursue my business goals. LoanBuilder provides fixed payments with no origination fee, and no prepayment penalty.

Loan Building through Swift Financial and Paypal.

WebBank is the funding source behind Loan Builder loans.

Okay… so that is stuff you think about in good times, when we want to grow our business. What about in bad times?

What if I run into trouble keeping up my Swift Financial payments?

If you are unable to keep your payments with Swift Financial current, you have options. You can even negotiate a lower pay off, or some payment relief, but first, let us look at the totality of your situation.

How I approach helping people struggling with consumer debt is the same way I approach helping with business debts, by focusing on math.

If your business debt is unmanageable, are there moves you can make to bring your costs and expenses in line with your forward-looking cash flow? Will making those moves allow you to stay current with all or your business debts, including payments to Swift Financial?

Is your financial pinch temporary?

If you cannot stay current on all debts, can you restructure some of your loans and obligations? Would doing so buy you the time you need to deal with a temporary shortfall?

If the business cycle you are in is such that not everyone will get paid, or the reality is that you have, or are looking at winding down your business, what about the personal guarantee you gave to Loan Builder, and other lenders?

Negotiating a settlement for less with Loan Builder

Your business debt can be settled for less than the balance owed, but it is often a different animal than dealing with your personal unsecured credit card. Much of the difference comes in the form of any collateral we may have pledged when obtaining credit from Loan Builder, and other business lines of credit.

We have negotiators in our network with great experiences settling Loan Builder accounts for less. The experience you may have on the path to reducing your debt with Loan Builder will often be dictated by the type of account and collateral crossover you have in your business.

Being late on your Loan Builder account, depending on the situation, can potentially impact your inventory and vendor relationships, or your Amazon and PayPal merchant services accounts. These impacts are not a small matter for some, and are of little concern to others.

If you have the ability to keep your business open, but need to find weekly cash flow relief, it is ideal if you can talk to someone knowledgeable about your options before falling behind. You can schedule a time to speak with one of us, at no cost, below.

If you are already behind with Loan Builder, or other business loans, and need to assess your viability going forward, and how to address these loans to ensure that, or how to deal with the personal guarantee you gave that puts you at further risk, even after the business is gone, you can connect with someone below in order to help you outline a workable strategy.

Who is Swift Financial?

Swift Financial is a business lending company now owned by PayPal. It is common to see Swift Financial mentioned in loan and collection letters and documentation related to your LoanBuilder account.

Swift Financial is who services LoanBuilder loans.

As mentioned above, you may see WebBank and PayPal referenced as well.

If your loan is more than a few payments late you may already be hearing from outside third-party collection companies. That is normal, and a sign that you may need to start thinking about your strategy to deal with this before collection efforts get further escalated.

Portfolio Recovery Associates and Solving Your Debt

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Portfolio Recovery Associates is one of the largest debt buyers in the country, and one of few publicly traded in the United States. Like many of the largest debt buyers in the US, PRA buys up unpaid collection accounts, mostly tied to credit cards, from Citibank, Synchrony, Comenity, US Bank, and more.

Portfolio Recovery Associates purchases unpaid debt by the bundle. They pay less than the face value of the debts, and then use their own internal debt collectors to try to get you to pay.

Upon purchase of your account, PRA will typically make phone calls, and send you collection notices in the mail.

Starting in 2021 PRA will be able to start texting you, and even post to social media, trying to collect from you. You will have the ability to opt out of text and other forms of communications. More on that below.

Payment Plans and Settlements with Portfolio Recovery Associates

Settle my debt with PRA

For many years I have helped people determine the priority of the collection accounts they are dealing with by risk, potential settlement savings, as well as payment flexibility. If you want to resolve a debt with Portfolio Recovery Associates you have some options to think through.

If you can afford to settle with PRA for a lump sum you can generally negotiate a better savings outcome. Settlements are often around half the balance owed.

If you do not have a lump sum of cash to settle your debt with PRA, they are one of the more flexible debt buyers offering to spread your payments out over many months, even a few years depending on the situation. Payment plans when settling debt is a fantastic tool that can help you prevent being sued by PRA (more on that below).

Here are a few reasons why you should consider resolving a debt you have with Portfolio Recovery Associates:

  • You have the resources to resolve the debt.
  • You do not want to be sued in court for collection.
  • You have credit and finance goals you want to accomplish in the future and want this removed from your credit reports.

If you want help settling your debt with Portfolio Recovery Associates you can request a free estimate or schedule a call with a debt expert below.

Should You Pay PRA?

You may be hearing from Portfolio Recovery about an unpaid debt, or see them on your credit reports, and wonder if you should even pay the collection account. Here are some reasons to consider whether you can, or should pay:

  • You do not recognize the debt as yours.
  • Your debt is passed your states SOL to sue you, and you have no credit or finance goals you are trying to reach until after the negative ages off your credit reports.
  • You have limited financial resources to work with, or to protect, were PRA to sue you (fixed income scenarios mostly).

I have talked with many people over the years who would prefer not to deal with a collection agency, or debt buyer, when paying or negotiating a debt. But once your account is sold to a debt buyer, it would be exceedingly rare to get it recalled by your creditor, so you may have to consider working with PRA if your goal is to solve the debt, even when you prefer not to.

If you are too stretched financially to commit to a half off settlement stretched out over a few years, it may be best to let things lay, even if you want to resolve your debt with PRA. If you have no assets, like real estate, and if your current and future income is limited to an exempt source, such as disability or social security, you could be protected from collections even were PRA to sue.

Request Debt Validation From PRA

You have a right to request debt validation from collection agencies and debt buyers like PRA. This right is outlined in the federal Fair Debt Collection Practices Act. Many of us have additional protections under a state law equivalent.

Debt validation is an important right to exercise anytime you are confused about the legitimacy, nature, and balance of a debt. You can learn more about debt validation from the CFPB, a federal agency with regulatory authority over PRA.

You may be reading this article wondering who PRA even is, and why you are hearing from them. It can be a bit confusing when you were hearing from your bank, say Synchrony or Citi, with collection calls and letters, and then suddenly you start getting calls, texts, and letters from PRA.

If you are concerned about whether PRA is the legitimate owner of your debt, a simple phone call to your original creditor to verify they sold your account to Portfolio Recovery can help you move forward with any debt resolution goal you have with confidence.

Also, if PRA has sent you a collection letter, they will typically identify the creditor they bought your account from, and often part of your credit card number, so you can identify whether you had the account at issue.

Banks have, in recent years, started to notify you of accounts they are selling to debt buyers like Portfolio Recovery Associates. Be sure to open all collection mail you get and keep track of accounts in a journal or file. It is helpful even when you cannot financially tackle an account just yet, to have access to the chain of communications that may have been mailed to you.

If my goal is to settle with Portfolio Recovery Associates, I would not request debt validation before negotiating, as it can complicate that effort.

Portfolio Recovery Associates Files Lawsuits to Collect

It is common to see unpaid debts lead to a civil lawsuit being filed in your local court to try to get you to pay. Your risks of being sued increase based on the banks you owe, and the debt buyers they sell to. Portfolio Recovery Associates is one of the largest, and most active debt buyers suing in courts across the United States.

There is a large network of debt collection law firms across the country that banks and debt buyers tap in to. Once you have an account being handled by one of these outside law firms, your options to resolve or dispute the debt can change, as does the urgency for action.

There is more to think about when you are being sued, but I will focus this feedback on resolving the debt or defending the collection lawsuit.

If your goal is to resolve a debt with Portfolio Recovery Associates, the ideal time is before collection law firms get involved. Once the firm is involved, and even if they have not filed the lawsuit paperwork yet, settlements tend to be more costly, and often do not allow for as much time to make monthly payments.

Like most negotiations, I suggest calling to initiate the discussion, and once you reach a verbal agreement, get the deal in writing before you pay.

If you have been sued already and cannot settle with the PRA attorney for a lump sum, be prepared to sign a stipulation (formal court document) when you need to make monthly payments.

If you are settling an existing Portfolio Recovery Associates judgment, I would typically want to have a lump sum to work with before initiating negotiations.

If you dispute the validity, nature, or amount of the debt PRA sent to a collection law firm, you have options for defending the lawsuit, and using the court discovery process to address your concerns. Using the formality of the court process you have an increased ability to get all supporting documentation of their claim than you typically have with a basic debt validation request mentioned above.

Most of us do not deal with court issues enough to be familiar with the court process, and how to use it to our advantage. It may be best to run your situation by an experienced debt collection consumer law attorney in your state.

The smaller the account balance PRA is collecting on, the more it can become uneconomical to retain an attorney to fight a lawsuit.

Getting Portfolio Recovery Associates Off Your Credit Reports

If you see Portfolio Recovery Associates on your credit reports, you will want to check to see that the original creditor that sold your account is showing as a zero-balance owed. If, for example, Synchrony sold your two-thousand-dollar credit card to PRA, they would typically show a charged off account on your credit with no balance owed, and now PRA would show the balance owed to them.

Negative items on your credit reports have a seven-year shelf life. This means that Portfolio Recovery should be deleted from your credit reports at the same time the charge off Synchrony is reporting falls off. PRA does not get extra time to report.

You can also resolve the debt with PRA and take advantage of their published policy to delete the item from your credit. Whether you pay the amount in full, or settle with PRA for less, they ask the credit bureaus to delete the item.

If you do not recognize the debt PRA is reporting, you can dispute it with the credit bureaus. But if you know the debt is yours, and there is still time left in your state to legitimately sue you in court for collection, I would not try to dispute a legitimate debt on my credit reports with a known aggressive debt collector. It shows I am trying to improve my overall credit and may have bounced back financially and am perhaps a better collection target.

Appearing as a better collection target when there is still time to sue me for collection can be a form of an invitation.

Sending a Cease Communication Letter to Debt Collectors

You have a right to request a debt collector like PRA cease communication with you. I would send that to them in writing if it were me. But I would also think twice about doing this, as PRA will then only be able to continue any collection efforts by suing you if there is still time to do so based on the statute of limitations (SOL) in your state.

If your state SOL is passed, sending a cease communication letter to PRA, or any debt collector at that point, is something I would do if simply ignoring their efforts was overly burdensome.

New rules that will begin in 2021 give companies like Portfolio Recovery Associates the ability to communicate with you in an attempt to collect a debt through text, email, and social media. You will be able to opt out of these methods without sending a cease communication notice, but if you use this letter, it will stop these types of efforts too.

PRA and Your Bankruptcy

You may find Portfolio Recovery Group has purchased your debts after you entered a chapter 13 bankruptcy repayment plan. Debt buyers are already purchasing distressed debt, but buying debts that are part of a chapter 13 repayment plan is uber distressed, so why do it?

If the price is right, it is profitable.

Roughly seventy percent of the people that have filed chapter 13 bankruptcy do not complete it. Some will convert their chapter 13 to chapter 7, where PRA would likely get paid nothing more in that event. But many people drop their chapter 13, and have to look to resolve the debts in the plan on their own. Settling debt for less than what you owe is a good alternative to chapter 13. Ideally you do this before you file bankruptcy, but it is the option of choice if you have to cancel the 13, and still cannot qualify for chapter 7 bankruptcy.

If PRA is trying to collect from you, and you are not sure what to do, we can help. If you want to talk through your options, schedule a call with me using the tab below. We can help you negotiate the debt for less, and often get you great monthly payment terms on the agreed settlement. We can connect you with experienced attorney resources that can help you too.

If you are hearing from a debt buyer like PRA, you may also be hearing from some others. You can get more information about resolving debt with LVNV Funding and Resurgent, as well as Midland Credit Management.

Settling debt with Radius Global Solutions

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A site reader recently wrote in to ask about dealing with a large debt collection agency by the name of Radius Global Solutions, who they are, and whether to settle a debt with them. The submitted questions are great, and as is the case with much of the site, I publish the exchange so others can learn from it.

I would like to ask you about settling a debt with Radius Global Solutions, LLC. Are they legitimate?

Radius Global collects on accounts from many different banks. I run in to them all the time. If you are curious about whether they are legitimately collecting on your account you can call your original lender and ask who they have your account out with for collection at this time. Your creditor is nearly always happy to provide the details.

How to settle debt with Radius Global Solutions.

What leverage do I have to get the agreement in writing or is the letter sent by the collector sufficient for an agreement and payment terms? 

Your leverage to get your settlement agreements in writing is the money you are offering to pay off the account.

Nearly all collection agencies have the ability to send you the settlement in writing once you have negotiated a deal.

If Radius has already sent you a settlement offer in the mail that you like, and can afford to pay, just be sure you are acting on the letter by the expiration or due date. If you need a new date you can call Radius Global and negotiate a new date, and get a new letter.

In general, what cases does the “settled” portion of a debt greater than $600 get taxed and in what cases does it not? In the cases it is not taxed, what specific terminology is used in the agreement between the collector and the payee to ensure that it is not taxed?

Generally speaking, all settlements where you save in excess of $600, should result in a 1099c being sent to you and the IRS the following January. Having been at this for a while, I recall a time when no one got them. Nowadays few do not.

There is no effective language or negotiation tactic I can provide that results in a creditor or debt owner agreeing to ignore a known tax reporting obligation. There are some instances I have seen though, such as when there was active litigation, the settlement has resulted in an agreement not to report. I am not sure the IRS would be cool with it.

Radius Global, as a contingency collection agency, and collects on the debts of others. I highly doubt they are ever in a position to negotiate anything about the tax reporting requirements of the companies they collect for.

You do have the ability to submit IRS form 982 to show you were technically insolvent at the time of settling, and should not owe a tax.

Radius Global Not Known To Sue

The reader submission went on to ask more generalized questions. Some of my answers tie in to all debts, and some are specific to Radius Global, such as the fact that, as a contingency collection agency, they do not file collection lawsuits.

Finally, in general, is my following assessment of debt collection accurate? 

It is best to settle with the credit card company. They will likely close the account for this.

Your accounts are typically closed after a few months of missed payments. By the time you are settling for the best savings you should already be dealing with a closed account. If you are not, yes, settling for less would close the account.

It is not necessarily always true to say that it is best to settle with the original creditor. There are some creditors that use Radius Global for collections where I would get a better settlement savings outcome from Radius than I would the creditor.

Getting more than 3 months to pay on a settlement is much more likely after an account gets charged off and placed with a collection agency like Radius.

If the account goes to collections, is it best to settle with the collector instead of being sued?

Nearly every time this would be true, but there are some limited exceptions to this. One would be when you do not have enough to settle an AMEX account that Radius may be collecting on, and you can use the formal collection process in the court to your advantage. This would be after the account gets pulled from a collector like Radius Global, and sent to a collection law firm.

A charge off occurs from the credit card company when the debt is not paid for a period of time. This event damages the credit score.

Yes. Most of the damage is done leading up to the charge off, but that is the pinnacle of negative impact from an unpaid credit card.

Another hit to the credit score occurs when the debt is paid to a collector.

Not true. Many of us will only see a benefit immediately, and there after, from settling and paying a collection account.

There are many instances though, when settling an old and stale unpaid collection account, that can bring a certain level of freshness to the negative. I do see temporary dips to credit scores in some of these cases. And there are scenarios where peoples expectations are to see their credit scores jump after settling 1 out of 5 collections, which is not always going to be the case. Several other things could be holding back improvements.

Another hit occurs to the credit score if a lawsuit is settled regarding the debt.

This has not been true since July 2017 when most of us saw the removal of judgments showing on the major three credit bureaus.

It is best to pay a non profit debt management firm instead of a debt collector as the event will remain on the credit report for less time, like 3 years instead of 6. However, to do this, involves a total survey of your debts and ability to pay a monthly amount to resolve the debt through the third party. In some ways, it is similar to filing bankruptcy but it is not as extensive and involved.

This is not accurate. Debt management plans with credit counseling agencies last up to 5 years. If you enroll a collection account with Radius Global into a plan like this, none of those monthly payments are getting reported. If the plan goes the distance, your credit is going to be much worse than if you settled with Radius for less and paid it off much quicker.

The similarities between a DMP and a chapter 13 bankruptcy start and end at:

  • Creditors are getting paid (though in chapter 13 not necessarily in full).
  • The plans tend to go 5 years.

Radius Global On Your Credit Report

Radius Global is a contingency debt collection agency. They have your account because you are already late with payments on a debt. It is more than likely your credit card bank that is going to be doing the credit reporting on the account, and not Radius.

Radius is not in a position to tell the bank they are collecting for how to report your account. Negotiating a pay for delete with Radius if they are not the company reporting is not a good use of time.

Your original creditor, such as a credit card bank, is not typically open to the idea of deleting the negative item they are reporting to the credit bureaus. Not if you settle for less, pay in full, or even offered them double.

Paying the settlement you negotiate with Radius Global will normally result in the creditor updating your credit to show a zero balance owed, or paid collection.

An exception to this would be if Radius Global is collecting for a debt buyer that does have a pay for delete policy. Several larger debt buyers will do that now, such as Portfolio Recovery and Midland Credit. But these debt buyers that have these pay for delete policies would not require you to negotiate the pay for delete outcome through a collection agency like Radius. It is a credit reporting policy that would apply without asking for it.

Anyone wanting help to resolve a debt with Radius Global is welcome to schedule a consult with me, or request an estimate below. You can also post in the comments and get feedback here on the site.

Resolving Debt with Velocity Investment LLC

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If you are hearing from Velocity Investment LLC it is likely because they have purchased an unpaid account from one of your creditors.

How to resolve debts with Velocity.

Like with many debt buyers, Velocity bids on accounts that have gone unpaid more than 4 months in the case of fixed loans, and more than 6 months late in the case of credit cards (though I do not see Velocity buying unpaid credit card debts at the time this is being published).

What debt buyers pay for the legal rights to collect debt gone bad can vary based on the creditor selling, the economic climate, how long ago payments ceased, whether the accounts have been sold in the past, and other details.

What a debt buyer pays for the legal rights to collect from you really does not come in to play when you want to resolve a debt with a company like Velocity Investment.

What types of debt does Velocity Investment buy?

As of right now, if you had a loan with Prosper, Lending Club, Upstart, and a few other market place lenders, you could be hearing from Velocity.

I have seen them buy up the accounts from Lending Club and Prosper right after your accounts charges off, so around 5 or 6 months after you stopped paying on your loan. I also see Lending Club send accounts out to an external debt collection agency for a round of phone calls and letters before they sell to Velocity (or other debt buyers too).

Upstart and a couple of other online lenders are pretty much the same timeline for when they sell unpaid accounts to Velocity and others.

You may get a letter from your lender where they clearly tell you they have now sold your account to Velocity Investment.

Using external collections and law firms to sue.

Like most debt buyers these days, there is an element of risk to not proactively trying to work things out with Velocity Investment LLC once you hear from them. They use a handful of collection agencies to write to you and call you in order to collect.

CKS Financial is one of a few collection agencies they use. CKS also bids on, and buys debt from, some of the same lenders that Velocity does.

It is not overly problematic to hear from collection agencies who do not sue, as they will have the account for a few months before Velocity pulls it back if the agency cannot get you to pay.

It can become a problem when you are hearing from collection law firms debt buyers like Velocity Investment sends your account to.

There is a massive network of collection law firms around the country that banks, lenders, and debt buyers can tap in to. When you hear from one, and they are licensed in your state, it typically means they are authorized to sue you in order to collect.

Settling and paying your debt

Any debt Velocity Investment has purchased is already going to be charged off. That means your credit already took a hit. You are not going to get anything extra out of the situation by paying them in full compared to settling for less. That being the case, settling proactively will save you money and prevent being sued.

If you have the resources and the inclination to negotiate and settle debts with Velocity, they are pretty easy to deal with. You can call them and negotiate using many of the tips I highlight through out this site, and in videos about how to talk to debt collectors.

If your Velocity account is with a collection agency, negotiating is much the same as dealing with any collector, but if the account is with a collection law firm, I typically suggest getting help.

Generally I have found the best results on settlements with Velocity Investment, no matter if negotiating directly with them, a collection agency, and certainly a collection attorney, to come from working with a professional negotiator. Not just from an amount saved on the settlement perspective, but with getting as much as a few years to pay the agreed upon amount, getting everything documented up front, and set up correctly.

Velocity Investment on your credit reports

It is common to find debt buyers on your credit reports. Velocity is no different. Some debt buyers have developed policies for removing their credit reporting when you resolve a debt with them (whether you pay in full or not). At the time I am writing this Velocity is not one of them, but more debt buyers are starting to do this, so stay tuned.

If Velocity is credit reporting, when you settle with them, like any other company furnishing information to the credit bureaus, they will need to update Equifax, Experian and TransUnion that you no longer owe the debt, and that it is a zero balance, paid collection.

Do not get hung up on whether they show on your credit as settled for less, or anything else like that, as the words on the credit report are not important, but the zero balance, debt no longer owed is.

If you would like help settling your account with Velocity Investment LLC, we do that! You can schedule a call to talk with me about it here:

https://calendly.com/debtbytes/15min

If you have questions or concerns about dealing with Velocity Investment you are welcome to post in the comments below.

Credit One Bank Debt Settlement and Payment Plans

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If you find yourself unable to keep up with bills, and you get to the point where your payments with Credit One Bank are going to be late, it may be time to look into your options.

Credit One is closer to the sub prime credit card category. They are a great option for rebuilding or starting to build your credit. The credit limits they offer are generally on the low side, and the interest rates on the cards not as competitive. And for that reason, lets start with some conventional wisdom.

Credit One

Can you afford to pay all of your monthly bills and still have enough left to apply $50 (or so) to your highest interest credit card? If so, look into using a debt snowball strategy to paying off debt quickly.

Getting Credit One to lower your interest rate.

If you cannot apply the debt snowball method, what if you were to get Credit One to reduce your interest rate? In fact, you may want to look at your options for lowering your interest rates on all of your credit cards.

First off, you can call Credit one and talk to them about things getting tight and see if you qualify for a temporary or long term hardship repayment plan. Most banks will listen to your financial hardship and see if they can get you qualified for lower monthly payments for a few months, and all the way through paying the balance off over a 5 year period.

If Credit One cannot qualify you for any internal hardship plan while you are current with payments, they may offer one to you after you have missed a payment or two.

You can also get monthly payment reductions from Credit One by working with a nonprofit credit counseling agency.

Settling with Credit One Bank.

If you have passed the point of no return with Credit One it may be time to look at your options to settle for less than what you owe. You can target your settlements with Credit One for less than 50% of the balance once you are more than 5 months late.

Credit One tends to offer lower credit limits. This can make it an easier path to raising the money you need to settle with them. If you are thinking of negotiating with Credit One on your own, be sure to check out my 10 part series about how to negotiate with your banks. If you would like to have a professional negotiate for you, I can help you learn more about that when you submit for debt help.

You may end up dealing with an outside debt collection agency that purchased the legal rights to your debt from Credit One. Currently, Midland Funding is purchasing unpaid credit cards from Credit One. Check out that page for options when dealing with Midland. They are one of the easier debt buyers to deal with, and they have a credit reporting policy like no other collection agency at this time (in a beneficial to you way).

If you have more than just Credit One to contend with, it may be better to submit for help and see how we prioritize your creditors. It is free to get a debt settlement summary, and it can be important to prioritize the money you have in order to settle for the best savings, or to eliminate collection risks. And that can mean Credit One, while being a smaller balance, and a quicker win, should be 3rd, or even later down the line for money.

Reduce Credit Card Interest Rates.

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Readers regularly write to me asking what options they have for lowering credit card interest rates. Many people inquiring about consolidation are making monthly payments on time, but are only barely getting by, and some months end up taking money from one credit card to pay another, and are running out of balance transfer options.

If you are stuck in a similar situation, here are three common ways you can reduce your interest rates on unsecured loans and credit cards.

Consolidation loans

You take out a consolidation loan and use all of that money to pay off the credit cards and higher interest personal loans.

Your current debt to income ratio may prevent you from qualifying for a debt consolidation loan in the size that you would need to fully pay off all of your credit card bills.

In fact, I do not see unsecured consolidation loans as high as many of us would need these days.

If you are only able to secure half of what you would need to consolidate, it still could make sense to use a consolidation loan to lower monthly debt servicing costs, just less so.

Debt Consolidation Company

You can use a debt consolidation company for their established relationships with your banks in order to combine all of your balances into one smaller monthly payment, and pay that same fixed monthly amount of money until all of your credit card balances are eliminated.

I cover the benefits and drawbacks in this article series about debt consolidation counselors

You can call my hotline 800-939-8357 and choose option one to speak with a counselor and get an accurate quote for what your lower interest rates would be, and how much your monthly payments will be reduced.

Credit Card Hardship Plans

I cover how to get your credit card interest rates reduced by yourself. Much of that article series relates to recession era bank policies. But I am now seeing several credit card banks return to that era’s hardship plans due to COVID 19.

If you are unable to get your banks to work with you on long term hardship repayment plans (at seriously reduced interest rates) they may still give the debt consolidation companies the lower interest rates for the life of your balances.

The more credit cards you have to attempt to get lower interest rates from, the more of a juggling act it can be doing self administered hardship plans. Because calling a credit counselor is a fairly quick and free way to get a baseline monthly payment quote, I typically suggest starting with that call. You take the quote and sleep on it for a few days, or weeks, and compare that to the debt consolidation loan interest rates and amounts you qualified for.

If for any reason you determine your situation is now beyond debt consolidation being helpful, and you want to compare consolidating with settling debts for less, you are welcome to schedule a call with me, or requesting a debt settlement quote below.