We just discussed how to negotiate debts successfully on our own, but that doesn’t close the deal…yet. 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 mistake. And one you will regret later on if the credit card you thought was settled (other types of debt too) resurfaces in a way where a written agreement to accept less could show the account was resolved, instead of the headaches you may go through without one.
NOTE: This post is part of our Debt Settlement Guide. If you’ve missed any of the previous content, or would like to start at the beginning, please see the links at the bottom of this page.
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 information will help you focus on crossing the debt settlement finish line with confidence – when your success is documented.
A Verbal Agreement is Not Enough
When you’re negotiating directly 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’s 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 creditors and debt collectors to negotiate with them is covered extensively throughout this site. Ongoing communications over the phone with your original creditors and debt collectors 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 don’t have the money to pay. Just making calls to “feel out the situation” wastes everyone’s time and could hurt your efforts later.
Your targeted settlement amounts will be different from one account to the next. If you’re working with someone in the network, you’ll be able to set realistic settlement percentage targets, timelines, and goals using real-time data about your creditors and the debt collectors involved.
If you are a DIY 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, or what you could do if you’re having a hard time getting one sent to you.
Reviewing Your Debt Settlement Letters
Reaching a settlement agreement can take one phone call, or it may take several calls over a period of days, weeks, or even months. 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 bulleted items above are what you want to see in a settlement letter to cover yourself.
Settling with a third-party debt collector means you must get the above details documented before remitting any payment towards the agreement. If the above bulleted items are missing from your settlement letter, you should request a different letter be sent to you that meets the above specifications.
Watch this quick video about debt settlement letters:
Setting Up an Agreement Without a 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’re 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.
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.
- Make payments on the settlement from your bank account that you set up specifically for saving and funding the agreements.
- 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.
- 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 information and setting payment dates in advance of having received a settlement letter is usually only an option I consider 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.
There are some instances where I will recommend you record a phone conversation about agreeing to settle a debt. I always encourage you to tell the debt collector that you are recording the call and why (they refuse to send you the agreement in writing before payment is set up).
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 I recommend to receiving 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’ve made. Getting the settlement letter faxed the same day is especially handy if you follow some of the “end of month”, or “end of collection agency contract” strategies that I lay out on this site, and other personal finance sites.
Working with a debt settlement company, or a professional negotiator, should not mean you let your guard down about getting settlement agreements documented and in your hands. Just because someone else is handling the heavy lifting doesn’t 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.
Almost done. The final step in our Debt Settlement Guide is paying debt collectors after the negotiations are done.
If you have questions about your settlement agreements, please comment below for dedicated feedback, or call 800-939-8357, ext. 2 to reach me directly.
This Debt Settlement Guide includes:
An Expert Guide to Credit Card Debt Settlement
How and Why Banks Settle Credit Card Debt with You
Types of Accounts to Include in Your Debt Settlement Plan
Why Settling Credit Card Debt is Like a Race
How to Settle Credit Card Debt Quickly
How to Talk to a Debt Collector
How to Negotiate Credit Card Debt Successfully Yourself
7 Largest Credit Card Banks and How They Settle Debt
Get Debt Settlement Letters and Agreements from Collectors (you are here)
Paying Debt Collectors After You Negotiated a Settlement
I’m currently dealing with a medical debt collection company. My wages have been garnished for the last 6 months to the point I’m having a hard time getting through the month. I reached out to family and received some funds to help settle this debt. I offered them approx. 55% of the debt and they denied it. I offered the money as a lump sum to remove my garnishment and do monthly payments again. When I said I would agree to the terms as long as they sent me a letter stating our agreement. He refused. Said absolutely not. I did not give them the money.. Seems EXTREMELY fishy that he would deny a lump sum payment because I wanted documentation. He said, “all our calls are recorded..”
The company’s name is A1 Collections
At this rate it is going to take 5 years to pay them off.. I’m not going to hand them large amounts of money with my covering my interests too.
How much is the debt? What amount of money do you have left to live on after the garnishment, and all normal household bills are paid each month? Does your income fluctuate, or is it static?
The debt is for 6800 and some change. I’m only working 15 hours a week at 10.00 an hour. My checks are a little less than 650.00 before garnishment. They take about 150.00 every month for garnishment. After rent, insurance, and my phone bill…I’m completely broke. My paychecks are once a month. I’ve been looking for more work, it’s a bit of a struggle because I’m entirely concerned of someone’s impression of me with having my wages garnished. They collection company doesn’t care. They don’t want to compromise.
If it were me I would file with your court to contest the garnishment as creating an undue hardship. Given what you shared, you would likely be able to get the garnishment stopped by the court. Once that happens, I would reengage with the the collector at A1 collections. You may find them more willing to follow through with the settlement documentation and a fair lump sum pay off deal then.
I have asked the collection agency to send me a monthly statement of what is owed and the balance after payment, like any bill …. electric, car, etc… I’m just getting the run around. Am I entitled to get a monthly statement?
Unfortunately, in most states, no, you cannot force the statements out of them. Who is the collection agency you are dealing with?
Hi Michael, thank you for responding. The collectors are Central Portfolio control. I’m making monthly payments and wanted proof of the payments and balance. Paula
Hi James!
I want to settle an account I have with Carter-Young (debt collectors). The original account was with Hargray, cable company. The amount $1222. I have tried to get them to send me a settlement agreement letter, but they refuse to send me one prior to paying the settlement, which hasn’t been made yet because they stated that they won’t send the letter. What do you think is a good settlement amount? And what are some tactics I could use to ensure my safety in making the deal?
My apologies, Michael, not James! Lol
I would record any phone call with them and tell them why you are recording. Save the recording for ever, along with proof of payment.
Utility companies do not often offer great settlements. You may find 50% is as good as it gets, or you may be able to do better. What have they said they would accept so far?
I initially went with a $400 settlement. I know that’s low compared to amount owed, but that is about what the final bill with the company was when I had to end the contract about 4 months early. I returned the equipment to the store, and the next bill I’d gotten was over $800 more totaling out to $1222! I’ve been disputing it for a few years now because the additional $800 was because they claimed they never received the equipment.
That same thing happened to me once too.
Did they counter offer?
No, because as I continued to conversation with the collector associate, I asked if I could receive a settlement agreement letter before actually making the payment, and she informed me that they no longer did that, only a receipt showing that I paid. By that time, I was getting frustrated, due to the condescending tone in her voice, and I told her I needed to consult with a professional concerning matter before proceeding. So nothing ever got to Hargray as far as a settlement amount, as of yet.
Let me know how it goes.
Will do!!! Thank you!!!
Trying to settle a debt with Chase and they initially offered me 60% of what I owed then eventually agreed to 40%. They said they will not drop it any lower until after charge off. I settled a Bank of America card for 18% before charge off. I am wondering if I should settle now at 40% or if I should wait until charge off and try to get lower. How bad is it for the card to charge off?
Thank you for all your time and help
Charge off is not a big deal. It is usually a far better idea to settle when you can save the most money.
That said, you are dealing with Chase. I would wait and settle with the first collection agency they place it with, and for a little better savings than you have been offered so far. If you were dealing with another creditor, the decision may not be so easy. Charge off is when some banks also will choose to send your account to collection law firm, and that can make things more expensive than the 40%.
Hi Michael
So I waited until charge off and was put with Nationwide Credit union. Before charge off Chase was willing to settle for $1700 and now they say they are only willing to settle for $2100. I assumed when it charged off I’d be offered a better settlement, not worse. Wondering your advice
Thank you very much
You will, you may just be going about it wrong, or too early. Fill in the talk to Michael form in the right column. When I get that I will email you to set up a time to go over some things on the phone.
I received a debt settlement letter, but it seems kind of weak. It basically states: When your scheduled payment has been received and has cleared the bank our firm will file an acknowledgement of satisfaction of judgement. Nothing about paid in full, etc. Is this enough or can they hit me up for more money after I pay the judgement amount. We already negotiated a settlement amount but I am scared to send them the money.
With judgments you are really only expecting them to file a satisfaction. They cannot collect more after that.
My total bill was for 16500 and I settled for 13,200. This is with the CItibank debt attorneys. A firm that has had numerous complaints. My new question is if 13,200 settles with Citibank how do the debt attorneys make their money or they going to ask for more money after I pay the settlement amount of 13,,200 ? The settlement letter states that I have settled with Citibank but not the attorneys /
Your settlement is with the plaintiff, and not the attorneys per say. The collection law firm simply works for the plaintiff. Settlement in your case covers all the players.
How the law firm gets paid by Citibank may vary, and is not important to settling.
Thank you SO much for all your Q & A videos. I believe knowledge is key. You are giving us so much quality and useful information. You are really helping alot of people through a very difficult situation. God Bless You Michael!!
My husband and I combined have a total credit card debt of 39,000. I am in the process of enrolling with NDR. They have determined our payment to be 550.00 a month over 4 years. My problem is all of our debt has already reached collection status and I have 3 judgments against me. 2 are through Portfolio recovery associates (one was just paid 2900.00) by attaching to my MIL’s bank account that she has my name on as a convenience account (she has taken me off, so I am safe there) I just got a notification in the mail yesterday of a judgment lien against ‘current or future interest in real property’. Lots of questions here. Most importantly…HELP with the judgment lien?? What do I do? This is a mortgage, I am in the state of Michigan. Should the homestead exemption protect me from anything bad happening? Will portfolio settle? Can NDR do anything to help with this situation. And 4 years seems like a LONG time, won’t it just be a matter of time before they all take out judgments? I can’t pay more than 550.00 a month to try and settle. Debt settlement companies really scare me as potential scams, but NDR seems promising ?? I’m just at a loss….HELP!!
Post the creditors and balances. Indicate which are judgments, and if a debt collector has the account. I can offer some strategy to you after that.
4 years is too long.
There are a ton of them, probably 20? All averaging between 1000-2500.00 each. A few may be under 1000.00. 1/2 are in collection the other 1/2 have been charged off, awaiting for a collection agency to snatch them up I’m afraid. NDR told me the total debt, including the ones in collection was 39,000. Is there a better way to get you the info you ask for? I’m not exactly sure who has what. One judgement is for around 1800.00. One that was just paid was for 2900.00 (that one was with portfolio recovery) the 3rd that I just received notice of a property lien is for 4791.00, that one is also through portfolio.
Thanks!
I suppose you can pull your credit reports and get a list of all of them if you do not have them listed out already. The specifics matter if you want detailed feedback.
I have settled my finance with Motonovo for my car today in full as I have sold it. I paid on line the settlement figures that they advised. Now say they can not give me a settlement clearance letter as there will br further charges as the account has been given to a debt management company as I have missed the last 2 payments.
Can they do, this as I have paid the car loan in full the figure they gave me on line today. I may loose the sale of the car now. What can I do and is this allowed?
I am not familiar enough with how things work in the UK to assist you.
Would I be able to ask the collection agency to put “paid in full” on my credit report. I don’t want a settlement to reflect me poorly. For some odd reason, My defaulted student loan doesn’t come up anywhere on my credit report. I even have a judgement that garnishes my tax return. Once I pay this, I feel as though it will come up on my credit report and will impact me negatively.
How long ago did you last pay on the loan, or did it go into default? It may not be on your credit reports because it is too old to be kept on them. And if you were to pay anything today, it does not get to go back on your reports.
When debts are more than 7 months unpaid you really don’t get a boost from paying the full balance. You could not pay twice what you owe and have it reflect as anything other than a paid collection. That is just the same as paying less than what you owe. That is one of the reasons I am partial to settling debts for less the longer they go unpaid.
Hi Michael
Do you recommend making the payments for settlements in person at the bank? Or how do you recommend making the payments?
Thank you!!!!!!
Check out this video from this week about how to pay your settlement agreements.
Hi Michael, thank you for responding to my e-mail concern. I’m currently trying to get an installment letter of agreement from two debt collectors. They both have refused to send a letter of agreement. The collectors are National Credit (AC?),Mitchell L. Morgan c/o Towson Crossing Apartments and Verizon. Both have said “since they are a collection agency they cannot send a letter of installment.
NCAC is double charging for this account. Spoke to Allen Jackson, who stated if I send one payment of $1497.23 debt would be settled. This collection agency is charging me $1496.77 for the debt. Verizon debt is $233.00.
I am not certain I understand what you have going on clearly. Call in for a consult at 800-939-8357 ext 2, and I can get the details.
I am trying to settle a debt with a Bank of America, they gave me an amount I want to accept but they refuse to give it to me in writing until after agreed to on my part. Looking for some assistance navigating this
I tend to get the settlement agreement set up in their system with enough time before payment for me to get the agreement letter from BofA. A couple weeks should do it.
So do you think it would be okay to accept the agreement over the phone and await the letter before making my first payment? Or should I try to keep pushing them for something in writing before agreeing to the settlement ?
Thank you
They say I need to make the payment before the end of the month or it will go to collections at that time. Just worried about agreeing to a settlement verbally, and making the payment and having them change the amount due after to settle in full
You have enough time to set up the payment at the end of the month and get the letter before the payment pull date.
You can also record the call to set your mind at ease. Let them know you are recording and why.
Great thank you! And I have one more account at Chase that is going to charge off at the end of the month. I called and they are really not open to a good settlement at this time. Is there anything I can do to get them to consider a reasonable settlement before the charge off date?
Thank you
I have been encourage Chase settlements with debt collectors after charge off for a while now.
I’m sorry I’m not quite sure what that means. Should I ignore the charge off date or try to settle before ? Or will Chase not settle until after charge off
I have been trying for several weeks now to get two settlement letters. one from version and one from a previous rental collections dept. We had talked about an amount for past due debit, but they both refuse to send a settlement letter but want payments. They stated they send paid in full letters. I need these letter to refinance my vehicle.
Are you offering to settle the debts for a single lump sum or setting up a payment arrangement for the full balance? Who are the debt collection agencies or companies you are dealing with?
If a settlement letter for one lump sum payment does not have a deadline ( ie; offer good thru______) and payment is made 2 weeks later from receipt of letter, does the collection company still have to honor the letter because there was no specified deadline? I did this and the creditor said that the offer was only good for 72hrs. No where in the letter did it state this. Also, the letter was sent by email.
Who is the debt collection agency you are dealing with? What is the original debt about?
The offer was a deed in lieu of foreclosure from a collection agency representing WestGate timeshares. The letter stated the agreement terms (amount $850- will be satisfied in full with no further obligation, etc), but there was no mention of a deadline- if paid by, or offer good until….
When I paid two weeks later, The collector told me that the payment will be applied to the balance and would not satisfy the DIF because the offer was only good for 72hrs. No where was this stated on the agreement. I have not paid anything else and I have not heard from them for 7 months now. This debt was never on my credit to begin with. I figured since I had the agreement in writing and executed my part within a reasonable time, I would not be responsible for anything more, regardless of what the creditor says. By not including a deadline, was that an oversight on the CA’s part or can this bite me later? Thanks for your input.
It could show up later. Has anyone tried to collect again after that?
Be sure and keep a copy of the letter, and your bank statement showing you paid, with your important documents.
No one has tried. Still not on the credit. I figured maybe he missed out on the commission and was just giving me a hard time. I will be sure to keep copies of payment and letter. Thanks for the article!
Post an update with anything new, like it showing as unpaid on your credit, or additional collection efforts. I can help you from there.
Hi Michael,
I have 2 open collections accounts. One from an old apartment complex and one from Centurylink. I tried giving them a call a couple months ago and could not come to a settlement with either debt collector. I haven’t heard from them for a bit, so it was suggested by a financial advisor to send them a pay-for-delete letter with delivery confirmation and a cutoff for responding to the letter. The financial advisor told me that debt collectors usually respond well to pay-for-delete letters. Is this true?
No, it is not true. Pay for delete is far from common. You have shot with doing that with Centurylink, but little to none with the property management company, or the debt collector they are using.
You can try of course, but I would look to have a dialogue on the phone and have that followed up with something in writing. The smaller and more local the collection outfit, your odds may increase.
At the end of the day, a paid collection is not all that bad for your credit. You can still accomplish most credit and finance goals with those debts showing resolved on your credit. In other words, getting them deleted is not something to necessarily get hung up on.
I found out that I have an outstanding medical bill from 2011. In at the end of last year the debt collector contacted me saying I owed a certain amount. The amount seed high. I asked to have the documentation regarding the outstanding account mailed to me. I also agreed to have a small amount of $25 taken out of my bank automatically every month. I also asked the debt collector to please send me something acknowledging this payment arrangement. He said that he couldnt and instead just sent me their bill. Fast forward one or two months later. I get a call from supposedly the same debt collection agency saying i owed money and they wanted my cc information. I didnt understand, I had already made a payme t arrangement. Nothing had changed on my end. Apparently the man I dealt with had quit or been fired and he was the only one with my payment information. All of it sounded a little weird. So again I asked him to please send me the information on the medical bills so that I could verify his request. I never heard back from him. Today I received a certified letter. I havent gone to pick it up but I cant help but be worried. Its the only thing I have outstanding and I cant even get any information on it. What do I do?
Pick up the certified letter and post an update. We can make progress from there.
Hi Michael,
I am currently being threatened with wage garnishment on a personal loan I got when I was 18. I am now 27 and owe $5536, I am going to get in contact with them on if I can settle for one lump sum before wage garnishment has to take effect (have a court date Aug 3rd on the matter) your article very much helped me in what I need to get from them in order to protect myself down the line. It does not seem like my debt was sold because the letter I received still noted PCU as the plaintiff and then noted their lawyers name who are in contact with me.
Its all very last minute and in a time crunch so just wondering a few things
1. I am just looking for all you stated in a letter from them once we figure it out?
2. Is it harder to settle personal loans once they get to this point?
You are looking for the bullet items I point out in my article above.
It is often more difficult to negotiate the best savings when you have already been sued. But it can also be more difficult when you are dealing with a small local or regional credit union too.
Thanks for replying, we ended up settling for a few thousand less than I owed. I paid them with a certified check and kept a copy of it to cover myself as well. They gave me a letter stating it has been ‘settled in full’ and the file with their office has been closed. They also gave me a dismissal form as well for upcoming court case, I am still going to call the court to be sure its dismissed but it appears that this went much smoother than I anticipated.
Nicely done MR! And I would follow through on all court matters like you suggested.
Definitely will follow up, don’t want to wake up to any surprises down the line. Thank you again for all your advice/help!
I agreed to pay a certain amount ari collected in Illinois. They will not send me paperwork. They take 20.00 out weekly. How can i stop it?
You should be able to contact your bank and stop payments going out.
What is the nature of the debt being collected? How much is the total owed?
Hello Mike, just wanted to get your two cents worth on a debt I am trying to settle with Natiowide Credit. I am new at this so thanks in advance for your patience. The letter from Nationwide states that they are “offering me an opportunity to settle this account in full for $2015.61. (The original balance was $9,598). We have been negotiating back and forth for a few months. The original creditor (Chase) is listed on the letter. Does this sound good and what do you think about the settlement total? Thanks.
It is a good deal to take advantage of if you can pay it by the time specified on the letter.
Nationwide Credit uses settlement letter templates that normally meet the requirements I outline in the above article. Make sure of that and then follow through. Congratulations!
Thanks, I appreciate it
Just a update on our situation with Natiowide Credit. They have offered in writing a settlement consisting of 12 monthly payments of $175, which is around $2100. Just wanted to get your thoughts. Our budget would work better paying it out in installments. Do you prefer the one-time lump sum payment? Thanks.
John
As a general rule, it is better to settle with a lump sum single payment than extend it over any period, but only if you can raise the money.
I have seen Murphy’s Law apply all too often when making multiple payments on a settlement.
If the only way to take a deal is to extend the payments, or you strategically need to in order to settle multiple accounts at the same time (always a good idea to reduce risk and maximize savings), payments work. Just be sure you are on time all the time, or early with payments.
Does extending payments increase the chances of a lawsuit?
Not if you have a written agreement.
Ok. One more thing, do I need to do anything else before I send the first payment in or just send a money order? I appreciate your patience as this is all new to me.
If everything is in order, I would make my payments. I would not use money orders unless they are issued by my bank drawn from my bank account. Third party money orders are harder to track and get proof they deposited them.
Quick update, I made my first payment and now the original creditor is calling me and the collection agency no longer has my account on record? Does this make any sense? Thanks.
Not really. So you are saying Chase is not calling you after you made the deal and paid your first payment on time to Nationwide? You have proof of your payment being pulled/cleared, or having arrived at the bank on time?
I thought that once the original creditor (Chase, in this case) sold the debt to the collection agency (Nationwide) then they were out of it? But when I made my first payment, Chase started calling me about the debt and now my account is no longer with Nationwide. I can’t figure it out. I guess I will go back to the drawing board and start re-negotiating with Chase. Sound good?
If you had an agreement I would call Chase and make sure they stick to it. If they will not honor a prior agreement that Nationwide set up with you, and you are not in default of that, let me know.
Nationwide does not buy debt. They are a contingency debt collector.
Chase stopped selling debt in 2013. That may not last much longer, but your debt has probably not been sold.
Hi Michael,
Thanks to all your advice from the website I have finally mustered the courage to resolve my Amex debt that was in default 90 days and sent to Zwicker & Associates for collection. I negotiated the settlement and they faxed me the letter. I agreed to one time lump sum payment on July 29,2016; and authorized them to take money out from my checking account (not used for anything else but for this). I was wondering if you could review my letter? They faxed it over and they said they will mail hard copy. My concern is that all other “samples” from Zwicker & Associates had name of the account specialist included, mine doesn’t. Is this a concern? They also told me they would send me relief letter from the law firm after the payment, although the person I talked to first said it would come from Amex, then corrected himself. It seemed too easy, the whole process. I got the letter, but I am just worried if I am missing anything here? I called Amex and automated message confirmed that Zwicker & Associates has my account and the phone number matched.Thank you in advance for your time.
The account specialist not being named would be no concern for me. And it really can be that easy to negotiate a settlement and get it documented. There are only a few large collection outfits that have not caught up with the times. Places like Portfolio Recovery Associates have to be dragged into the 21st century kicking and screaming, but most get it.
You can call in for a consult if you like at 800-939-8357, ext 2 rings my phone.
I had already agreed on a settlement back in February of 2016 for credit card debt with Wells Fargo. The case itself has been dragging on for 3 years.. The first payment was to be scheduled for March 15. I just now receive (June) an email from Weston Legal with the settlement papers attached.
They have set up a schedule for the 1st payment to be received in 5 days from now. I also am out of the country with very limited access to much of anything. Do I have agree on this time frame or request an extension? I originally had asked for more time to gather funds. I’m not sure who dropped the ball here by not giving me any notice. Is this how it normally works?
I would not say everything normally happens last minute, but it can, and yoru being out of country may further complicate this.
How much is the balance owed? How many payments are you making on the settlement? When you say case, are you dealing with Wells Fargo in court all this time?
I received a letter from C&W Asset Acquisition that they have taken over loan servicing from a previous company. This is for a Nellie Mae loan for which I haven’t made payments in years and is presumably in default. The letter also says that unless I dispute the debt within 30 days of receipt, they’ll assume the debt to be valid.
My questions:
— I don’t have any documentation that they are legitimately servicing this loan. Do I need that documentation before trying to reach a settlement? If I don’t have it, am I at risk of paying off this loan twice, to two different servicers?
— Should I dispute the debt in order to get them to send me such documentation?
— How can I best reach a settlement? I’d prefer not to pay the entire balance, but I could afford paying a lump sum for less. What percentage should I aim for?
You can connect with Nellie Mae and ask them who they sold or placed your account with. They will tell you. Let me know if they say anything other than C&W Acquisition.
Once you confirm you are negotiating with the right collector, and get everything documented up front before paying, there is really no risk of having to pay twice. There could be slip ups on the collection side, but you would be able to get them to correct that quickly when you did things right on your end.
I prefer you not to pay the full amount if it is not necessary either. How you go about it, and the amount you target, can vary from one person to the next.
When did you last pay the debt?
What state are you in?
Is it showing on your credit reports?
Do you have any other key derogatory items showing on your credit reports right now?
I called Nellie Mae. They said they transferred the loan to Navient (formerly Sallie Mae). Navient said the loan was transferred to New Jersey Office of Student Assistance. That phone number goes to New Jersey Higher Education Student Assistance Authority, who told me the loan was consolidated in 1999.
I do have a large group of consolidated loans with MOHELA/the Department of Education, although I don’t know specifically which loans those are.
— I don’t know when I last made a payment to Nellie Mae, but it would be sometime between 1999 and, say, 2006.
— I am in Virginia now, but lived in New Jersey until 2013.
— There is no Nellie Mae, Sallie Mae, Navient, or NJHESAA loan on my credit reports. The only non-closed loans are the MOHELA loans.
— The one negative item on my credit reports is a civil judgment from 2010 listed in the Public Records section, which I wasn’t even aware of until I requested the credit report today. The civil judgment was issued to The Education Resource, whom I’ve dealt with in the past as TERI. The amount is not the same as the (alleged) Nellie Mae loan, although it’s within about 10%. The credit report also says, “Estimated month and year that this item will be removed: 12/2016”
Call in to the hotline at 800-939-8357 and press 4 to connect with Andrew about your student loans. He can dig deeper and hopefully help you get to the bottom of this, and if necessary, help you settle as well.
Andrew referred me to Jan Miller, who handles federal student loans. Since Jan’s first available appointment is the 20th, my immediate concern is whether I should send a reply to C&W to dispute the debt since their self-imposed deadline is the 19th. Is there any harm that can come from doing so?
I know Jan. He is a great resource for resolving federal student loans.
There is little to be gained from sending in a dispute letter on legitimate federal student loans. What is it that you would be disputing?
It sounds like C&W might not have the right to pursue this debt? I guess I’m just not sure how to answer C&W and I haven’t yet heard back from Jan.
If you scheduled the call with Jan, it should happen.
I would not send a dispute letter to C&W challenging their ability to collect if it were me.
Hi Michael,
I am very grateful for your knowledge and expertise in helping with debt settlement. Thank you very much for your helpful posts.
I have reached an agreement and received a settlement offer with my debt collector. This debt has gone to court and a judgment has been written for it in the amount of $7600. I called the collection agency and they said I owed $10,500 for this court judgment. I negotiated and they sent me a settlement letter stating they will accept $1500 as payment in full to settle this debt. I sent them a cashier’s check of $1500 I purchased from my bank account before the due date said in the settlement letter. I called them a few days later to request an Acknowledgment of Satisfaction of Judgment. They stated the settlement of $1500 in their letter to me was not correct and that the settlement offer is not valid and I still owe them $9000. They have sent me 2 letters since to declare that I pay them the full amount of $10,500 and they will refund me the $1500 they already received from me. I am in dire need of counsel. Please help.
Interesting situation you have there. Who is the collection law firm handling this? Who is the judgment creditor or named plaintiff in the lawsuit?
The collection firm is Hunt & Henriques and Creditor is Citibank. I owed a credit card debt that went to court and I have a court judgment on it. In good faith, I wanted to pay this debt and resolve this judgment so I paid them the amount they stated in the settlement letter. Now they said that letter is not valid and I owe them more $$.
I don’t understand how they can send me a written letter which states that $1,500 would settle the judgment as payment in full for which I have sent them a cashier’s check and paid them the asked amount. Now they can say I owe them more $$. I thought that the settlement letter they sent me is legal and binding so I sent them the $1,500 to settle this case.
What should I do now?
I would like to review the letter to be sure the offer was clear that they were settling with you. If it is, and you paid them the agreed upon (what was offered in the letter), and you got the money to them on time, and they deposited the funds, I see a couple of options.
Connect with an experienced FDCPA attorney and look into whether your rights are being violated by Hunt and Henriques. I can email you contact details to someone who will offer you an initial free consult. Let me know.
File a CFPB debt collection complaint against Hunt and Henriques. The CFPB will want to know about it if Hunt and Henriques is trying collect twice, or back out of an agreement you accepted with them.
It is not your fault if Hunt and Henriques screwed up. But I want you to proceed with confidence.
Please email me details of an experienced FDCPA attorney so I can get assistance with this case. Hunt and Henriques just sent me a check for the amount I initially paid them. I am very grateful for your help.
I would not cash that.
I sent you an email a moment ago. Run your situation by Jeremy and please keep me posted with how this turns out.
How do I ensure that when I settle the debt, and it is paid in full, that they will not go after the co-signer of the loan for the amount that was not paid?
Can you offer some specifics of what you have going on Kellee? What type of account are you referring to? Who is collecting on it? When did you last pay on it?
Hi Michael,
I’d appreciate having your advise. My wife left her former office lease because what we considered a contract breach from lessor side, even when we notified in advance our intention to cancel the contract and the reasons which they verbally accepted, when we left the office they send a debt claim to a collection bureau. The point is to avoid efforts and time we agreed with the Advance Collection Bureau to pay a lesser amount, we asked them a debt-settlement agreement and they send us this by email
“””””””””””””””””””””””””””””””””””””””””””””””
Consumer: XXXXX
Creditor: XXXXX
Account#: XXXXXX
Balance: $2729.50
Per your request please consider this written verification of the following:
$ 1800.00 will be accepted as full and final settlement of the above referenced account if, and only if, received in this office via good funds by : 04/04/16 .
Your cooperation is appreciated.
“””””””””””””””””””””””””””””””””””””””””””””””””””””””
Should we accept this as debt-settlement agreement and pay it off? . Thanks in advance Alex.
If everything else is in order that verbiage would be fine for me.
Hey Mike I got a settlement letter, a confirmation # and setup a lump sum payment on 3/29 with United Collections Bureau, gave them my routing info & my account number for my checking account(set up specifically to handle settlements) money is in there and was to be taken out on 3/31, but it’s now passed 6pm on the 31st n they still haven’t taken it out, If they take it out tomorrow after the payment due date on the letter has passed can they void our settlement agreement?
UCB will not likely do that. It is in their system for timely processing. It can take a day or two to clear on your side is all that is likely happening. Let me know if it does not process through by Monday and let’s go from there.
Hi Michael –
I was able to reach a settlement with Atlantic Credit & Finance who is collecting on behalf of Midland Funding LLC. We agreed on 35% of the original debt and the person I was speaking with asked that I give him my bank account information so that he could “set it up in the system”. Since we discussed that funds would not be available until mid July or so, he set the due date as 7/31 which falls on Sunday and he even mentioned that since it’s Sunday, it will be drawn on Monday 8/1.
Here is a text of the letter he send via email on the Company Letterhead.
”
Original Creditor: XXX
Original Creditor Account #:XXX
Current Creditor: Midland Funding, LLC
ACF Account #: xxx
Balance:$9,479.22
Dear XXX
This letter is to once again inform you that the above referenced account has been placed with Atlantic Credit & Finance. At this time we would like to confirm the following arrangement you made with us in order to resolve your account: One-time payment of $3,317.73 due on 07/31/16.
We appreciate your cooperation in resolving this matter.”
======================================
I have 2 (two) concerns with this letter and wanted to run this by you and see what your thoughts were:
1) The verbiage to me seems sort of vague – “resolve your account” there is no mention of something along the lines of settling the account in full. “Resolve your account” could mean something other than fully settling the account (correct me if I am wrong.)
2) Since 7./31 falls on Sunday and according to the person, the ACH will be initiated no earlier than Monday 8/1 is it possible that this agreement can be voided and they can later say that the funds were never received on 7/31 and now I owe them the rest??
What do you suggest I do? As it is, I am not comfortable with either of these. Should any of the above be a concern?
thank you!
In the context of the letter and the circumstance the reference to resolve your account is settling. The one time payment to resolve is clearly stated, as is the actual balance. I pay Atlantic Credit and Finance the settlement amount based on this letter if it were me.
I understand your concern about the payment date being a day off. I do not share the concern, as the next available banking day is not in your control (or theirs). Atlantic Credit will not try to collect more from you after this. If that were to happen, post an update and I can help you from there. But the way around this would be to have the payment pull date be a few days earlier. If that is something you can do, and it helps you put your mind at ease, call in and request for the payment to transact earlier.
I personally would be comfortable with all of it.
Thanks Michael –
A couple other things. Many people on the internet write how it’s not advisable to pay using ACH as the collectors can mess around with the account. I do plan to only put slightly more than the amount in the account for them to take. Do you recommend that I close that account afterwards just for safety? I know Midland and its affiliate are closely monitored but still what would be your advice.
Also, in the case of the OC settlement, i would always get 1099-c. Since Midland purchased this debt from Synchrony, is Midland going to send me 1099-c or Synchrony? Do JDB’s send out 1099-c? Since they only pay pennies on the dollar to buy the debt and they really are not losing any more on it?
Yes, they do send out 1099c’s. It is not about what they pay for it at all. It is about the benefit you got from the credit (IRS sees it as same as cash income).
There just aren’t the same concerns with ACH payments with legitimate players in collection anymore. Those kind of concerns were very real back in the 90’s when I started out. They have been overblown cautions for years. I understand the caution, so I rarely publish anything about it. But if something went wrong with the payment it would be fixed in a day anymore. Well… at least with a huge player like Midland it would be.
I would close my special settlement checking account. I would probably use it as my online shopping account. Having the debit card ready to use with only a couple bucks on the account, and log in and real time transfer the money I need to make an online purchase. This would create a protection for using a debit card if I no longer used credit cards.
Michael –
I still have one more question regarding 1099-c.
In my case the Synchrony Bank was the OC who sold the debt over to Midland. I checked my credit report and it shows Synchrony is showing charge off/zero balance on the account.
What I was trying to understand is, will the Synchrony issue 1099-c at the end of year since they charged it off and forgave the debt? and in addition I will get 1099-c from Midland?
So if that was the case the Synchrony’s 1099-c would be the entire original amount of 10K or so, and Midland’s 1099-c would be close to $6.5.k after I settle with them.
Can this be even done? In your experience have you had someone received 1099-c from both the OC who sold the deb AND the JDB?
No, that is not what will happen. Synchrony will not send the 1099c, as they have no legal claim and cannot forgive anything at this point. Midland will be the one to send a 1099.
I have a more thorough post up about taxes on cancelled debt.
Thank you! You have been very helpful!
Mike – I apologize for inundating you with too many questions about this matter. From your experience, is it generally better to settle debts owned by JDB’s at this stage when they are collection or when it gets to pre-trial?
I do want to be done with this and move on ASAP. But I have been hearing/reading a lot about how JDB attorneys usually lack documentations to support their cases.
For example: in my state of North Carolina, the general statues 58-70-150 States:
all of the following materials shall be attached to the complaint or claim:
“(1) A copy of the contract or other writing evidencing the original debt, which must contain a signature of the defendant. If a claim is based on credit card debt and no such signed writing evidencing the original debt ever existed, then copies of documents generated when the credit card was actually used must be attached.
(2) A copy of the assignment or other writing establishing that the plaintiff is the owner of the debt. If the debt has been assigned more than once, then each assignment or other writing evidencing transfer of ownership must be attached to establish an unbroken chain of ownership. Each assignment or other writing evidencing transfer of ownership must contain the original account number of the debt purchased and must clearly show the debtor’s name associated with that account number.
Is Midland usually good at producing such documentation at the time of service? If I am served a complaint and if any of this is missing can I automatically have the case dismissed?
I don’t want to come off as someone who is trying to dodge anyone but if the JDB attorneys are known for routinely lacking such documentation due to the fact that oftentimes companies like Midland purchase debts “as is”
It crossed my mind if this were the case, would not that also put me in a better position to negotiate a lower settlement?
I am at 35% right now and seems like it’s a decent one. What is your take on this whole thing? Am I potentially asking for more trouble by going down that route?
Once again, i do appreciate your insightful responses on this particular situation.
It is far better to settle accounts before they get to the courts for collection. In fact, if you can swing it, you want to settle accounts before they ever get placed with attorney collectors (sometimes hard to do with AMEX and small credit unions). The difference can mean as much as 20 percent, and even as much as 40% more saved. And without the stress of court.
It is hard to get a firm grip on what you are doing. You contradict yourself with saying you do want to get this over with as soon as possible, but wonder if you can take advantage of the requirements for debt buyers to prove their claim, which are a bit more stringent in North Carolina (but Midland has a consent order to pretty much do the same thing – and more – in every state as of last year).
You either want to get this done and start improving your credit, or roll the dice that Midland can prove up in court. If you are sued and lose you will pay more for the settlement, and lose a great deal of your personal time dealing with the courts, or money if hiring a good attorney. If you settle it is over with.
You will not likely improve your settlement down the road, and if sued will look back and probably regret not taking the deal (if your honest with yourself).
My experience is that people with resources to knock their debts out early on, regret not having done so quickly. People with no resources to knock debts out are forced to put one fire out at a time (and pay a premium), or file bankruptcy. And most of the fire fighters would love to switch places with the others.
Thanks Mike, I guess it is better settle and move on than potentially invite more trouble down the road. I let my emotions get in the way after having read all sorts of “nasty” things about how Midland and its affiliated companies/attorneys have done.
I have spent a lot of time perusing the creditinfocenter and folds over there, in general, seem to be wanting to fight the cases for the sake of fighting. 🙂
Some sites are better than others for delivering usable information when we are in debt collection situations. There are some awesome posters that know their stuff over on CIC. But there are far too many emotionally frothed up people who say “never pay a debt collector” because they refuse to. Too many people read that and get charged up and let opportunities to resolve debt pass them by, and later pay more to resolve a debt when sued, or legal costs, or stress and life costs that could have been avoided.
It really boils down to goals and resources for me. Do I have the resources to resolve the debts, either now or in a reasonable period of time? Do I have credit and finance goals that will be impaired by unresolved debts? Then do what makes sense from there.
Mike – speaking of credit repair. I did have one question unrelated to the above.
I had 2 credit cards that were charged off back in 2011 (with c1 and BoA) and without any collection efforts, both banks issued me 1099-c. However, when I am checking my CR, I see that both of these banks are reporting my accounts as follows:
Account Status: Closed
Payment Status: Charge-off
Balance: Whatever the balance they charged off
and both are updating my report monthly with FP (Failed to Pay)
Since they issued 1099-c, can they report balance other than zero?? I understand that 1099-c means that they forgave me the debt and its uncollectible but for the past 4 years they showing Balance the charge off amount.
Anyway this can be removed to changed to zero balance.
All I have are 1099-c they sent me,
thanks
Hi Mike, I just reached agreement with URS, settling a citibank amount for $9616 for $2420. I have received the settlement agreement letter by fax and it includes all your points you said to make sure were on it, I just want to make sure that this wording would fit your definition of settlement full.
“Our client, above named creditor, has agreed to accept your 1 time payment(s) of totalling $2420.83 as settlement for monies owing on your account.” What do you think?
I would be good with that wording in the settlement agreement with URS if it were me. Congratulations on getting this wrapped up!
Thanks Mike, now I’m dealing with United Collections Bureau for citibank charge off as well. They sent an offer for settlement in the mail on 3/11 that expires on 3/30. I called and stated I will see if I could come up with the settlement amount they offered but when I asked about a settlement agreement letter for that amount offered, the representative kind of played games and came up with excuses: “like it could take up to 48 hours to have them type one up and email to you because the lady is swamped and goes home at 4” AND “faxing it would take longer because they have to receive an authorization to send me faxes” and they said “my settlement offer letter is the settlement agreement letter”. And “around April 30th I would receive a satisfaction letter after I pay them by March 30th”. And they said if i payment is not made by 9am on the 30th, the price goes up $100 because they weren’t supposed to offer me so low to begin with”. Could the settlement offer letter and a recorded phone conversation(with their consent) be enough if it ever comes back? I just feel like these guys are playing games when it comes to the settlement agreement letter compared to URS, with them they said it would take up 2 hours to get typed up, faxed and it was done. I don’t mind walking away from the deal, I want to get it done, but I don’t want for it to bite me later.
If you are up to it Tom, send me the settlement offer letter from United Collection Bureau. My email address is the one you get these comment notifications from. I will share my thoughts after I look at it.
Generally I would say the offer letter is fine as long as you are paying the amount stated, and before the offer expires.
I don’t think I get comment notification, I just ran through all my email folders and nothing popped up.
Hey Mike, don’t worry about my earlier post. I dealt with someone else at UCB and they were more than happy to fax me a settlement letter, and not only that but they had the wrong due date for payment and I called back and they fixed it right a way and faxed me another one. I guess it really just depends on the type of person your dealing with on the phone. Thanks again Mike.
I am trying to resolve a default judgment that is 5 years old. The debt is form medicredit. I contacted medicredit and the stated the balance due is $2000 but they would accept $1300 to settle. They will not give me anything in writing in advance. I contacted the attorney that has the case and they gave me the same balance but offered to settle for $1900 and won’t provide anything in writing in advance. I worry about paying without anything in writing and If paying medicredt the $1300 makes this go away since that circumvents the attorney. How do you suggest I resolve this?
You may want to use a recording app for your smart phone (iphone and android have good free ones) to record the conversation with the Medicredit rep. Tell them you are recording and why (they wont send you something in writing). Cover all the details that are being agreed to. Get them to identify themselves. Take notes of the number you called and time of day.
Save that recording until documentation of the deal you paid arrives. I would save the recording after that too. If anything happens that was not agreed to, or some error occurs, you have what you need to remedy the situation quickly.
Hello, I am in need of your help. I took out an installment loan with Check n Go in 2013 for only about $3000.00. The payments would have been over $700.00 per month for 12 months and I ended up defaulting after two payments. It went to collections and I never heard anything about it until it showed up on my credit report in mid 2015. The balance is now $4000.00 and owned by Real Time Resolutions collection agency. I’ve not gotten any letters or anything but would like to settle this debt. I have anxiety and hate talking on the phone and have no verbal negotiation skills whatsoever. Can I send a written letter requesting to settle the debt, for say 30-40%? Or do absolutely HAVE to speak someone over the phone first?
Thank you and I look forward to hearing from you.
What state do you live in? A written acknowledgment can reset the SOL to sue you in a handful of states.
Watch this video about who is a good fit for DIY debt negotiation.
If you could be resetting the SOL to sue, and before you resort to sending efforts to settle in writing, is there anyone in your friends and family circles you could ask to help do the talking?
Hello, and thank you for your reply. I live in California. A friend of mine agreed to do the talking for me. The most I can pay is $1500 in full and I can send cashier’s check. as soon as I receive a written/signed letter stating that it will be considered settled once that is paid. Do you think this amount is reasonable?. Do you have any other suggestions on what he should say? I will also check out the link you posted. Thanks so much again!
If 1500 is all you can than that is what you stick to. You may not get it hammered out in one phone call, but stick to it, as you sometimes have to wear them down.
If your friend is in the room with you when you make the call, you can often authorize him verbally to speak for you with the debt collector on the other end of the phone. You may also want to be ready to send a written authorization if they require that (it happens).
Have your friend read up about negotiating with debt collectors before the call.
Hello, again! Well we called and they continually stated they could not discuss acct info without my birthday, address and SSN, which we refused to give of course,even though we gave them acct number! We ended up telling them to send letter validating debt to whatrver address they had on file and the rep said ok and hung up. I don’t know if he will ever send it, as I have never gotten a letter regarding this debt (just showed up on credit report.) Should I wait and see if they do send a letter validating debt or should I be proactive and send them a debt validation request letter myself? If I do send one myself , do I just include my name,mailing address and acct #? Just want to pay this thing and not make things worse! I also don’t want to get sued! Thanks so much, Michael!!
They likely already have your SSN and DOB. They will have all of the addresses that show on your credit report too. If your current one is on there, they know where you are at right now.
If I want debt validation I request it in writing and use certified mail. You can be identified by the account number. But try not to get hung up on all the identity stuff at all. If you are dealing with a legitimate debt collector on an account you are familiar owing, they have all the details already. They ask you to verify them to be sure they are talking ot the correct party about the debt. They do this for their own CYA effort.
Thanks so much for all of your help!
I am currently trying to pay off a old cell phone debt. My first question is would it be better to pay it off in full or to negotiate a settlement ? Also Im a little thrown off because this debt is being handled by two companies. One is reporting it to the credit companies and the other is taking the payment. Neither company deems to have any control over what the other company does. Also I have requested a arrangement letter and been refused by both companies. They both state ” they dont do that” and will only send me a letter after a payment has been made stating that their “recorded ” conversation with me can be used in a court of law. I have always been told to never make a payment with out and arrangement letter first.Please help!
Who are the two companies you are dealing with?
How old is the bill?
The older the debt the more I am geared toward settling for less.
I am okay with using a phone recording of your own to protect you in some limited cases, but not relying on the fact that they are recording.
Share some more details and I can offer more specific feedback.
Have a Bank of America cc balance is just over $19,000. Last payment Jan 2015. I have had a huge drop in income over the past 2 years, and that is the reason this card is so behind. 7/2015, they offered to accept $8600. I was unable to even afford roughly $400 a month, so I could not take that offer. In December, I recieved a letter from a law firm saying I had 30 days to dispute the validity or contact them to make payment arrangements. I may have a way to come up with a settlement to avoid a judgement or bankruptcy, depending on if they will accept the amount I can offer. If they sue me, I’ll be forced to file bankruptcy. I’ve already met with an attorney to discuss my options on this account based on the letter. The attorney said not to worry about the letter unless I am served with a suit, and actually advised me to file Ch 7, based on my current financial situation. Is calling Bank of America my next step? Is there any reasonable hope of settling for under 40%?
Call me to go over some of the details that are missing from your comment. You can reach me at 800-939-8357, option 2.
There are instances where you can negotiate a better than average settlement with FIA card services, or the attorney they have the account with. Your hardships may be ideal.
I tried to settle with a collection agency that is suing me. We agreed on a settlement amount and they told me they would fax me the agreement. I had already received papers from the court in the mail which I had to respond to by a certain date. I was patiently waiting for the fax so I could settle the account. A couple of days before the required date I had to respond to the court by, I had no option but to hire an attorney. About 2-3 weeks later, I get a call from the CA telling me they never received a payment. I told them I never received their fax. They looked at their records and they had just sent it out (about 30 days after the initial request). Did they violate any law?
I cannot see a violation in that, but run it my your attorney.
Thank you Michael for your reply.
We spoke to Capital One recently and reached a settlement figure on one debt.
Unfortunatley, there is a 2nd debt with this bank as well. When we inquired about it, the
bank told us that this one was with the law firm, Hayt, Hayt, Landau. This has been since 2009!
I will try to reach a settlement agreement with them for 50% or less.
Hello Michael,
May I ask first what has been your experience with the law firm Hayt, Hayt & Landau
out of Miami, FL regarding negotiations to settle an old credit card debt?
We are about to contact them with an offer of settlement regarding an old
Capital One judgment (just discovered) recently after attempting to pre-qual
for a mortgage. This debt dates back to 2009. We contacted Cap One to discuss
a settlement but they said the debt/case is still in the atty’s hands. (?)
Your advice and information is appreciated.
Rob
I
Hayt Hayt and Landau are a pretty straight forward collection law firm to deal with. If you can be convincing enough, settlements of 50% are possible. That target is as much an element of Capital One being the creditor as it is about Hayt Hayt & Landau, or the debt being in court.
Hello,
My husband and I are currently trying to purchace a house. I found out that I have a judgement from 5 years ago. I called once to see if I could settle and the quoted amount due was double what the amount of the actual court judgement states. She also stated that they would only accept 75% of the amount due to settle. Do you feel that I should wait two years to see if the judgement comes off my credit report or continue to try and settle? I would like to buy a house sooner than 2 years, but I want to be smart about contacting the Collection agency. Would it be smarter to settle with the court since the amount is half the price? Any suggestions would be greatly appreciated!
Thank you
It is not uncommon for a judgment to legitimately double from the original amount owed. What was the balance at the time you stopped paying the account? Who was the account with? What is the name of the collection agency handling this?
Unfortunately, Waiting 2 years for the judgment to drop off your credit is not enough. The judgment is in the public records and that is something mortgage lenders look up too (not just credit reports), and they are unlikely to lend to you with an unresolved judgment.
You cannot settle with the court. They are not a party to the lawsuit or the claim. You would have to give the court 100% of what is owed with all interest etc.
I can offer more feedback with answers to those questions.
Hi Michael, I received a letter from Fenton & Mcgarvey Law Firm with the original creditor as Credit One Bank. They offered to settle for 25% of the balance reflected on my acct the day I call. I called today and reached an agreement of a $225 settlement on a $800 debt. I asked them about written documentation and he told me once the payment was received I would receive a letter of the closing of the acct. I advised him I would be paying by money order and I would be sending the payment off on Dec. 11th. Should I send that certified and the letter I received offering the 25% payment enough documentation to use as a settlement letter/offer?
Thank You for your help in advance.
Is there a paid by date on the original settlement offer letter the debt collector sent? If so, what is that date?
Yes, the letter states the funds have to be in their office no later than December 26th on which the offer will expire.
I would be okay with the letter in that case.
I do not like using third party money orders because they are hard to track. If you pay with a check and will not be using your own, think about getting your bank to issue a cashier check drawn from your account. Your bank will be able to help you track that payment if you ever need to.
I defaulted on multiple student loans taken out with Sallie Mae, now Navient. The last payment I made was in April of 2012. The total amount owed right now is about $88,000. I haven’t answered a phone call in years and have ignored previous lump sum settlement offers.
This week I received a letter from Allied Interstate offering a payment plan of $250 per month for 352 months, with the first payment due 11/18, and an interest rate of .001% after I enter into the agreement.
My financial state has drastically improved since 2012 and I can afford this payment. I knew I was pretty far gone with damaged credit, and was going to wait on a settlement I could afford and rebuild from there. I’m looking this as an opportunity to essentially start fresh. 30 years, 250/month, no interest. If I was making regular payments on this account, I’d be paying over 500 a month, and in 30 years have paid 100k of interest on top of the principal.
I am curious about the following:
How will this be reported to credit agencies? I am attempting to climb out of the credit rating basement, and can only see this helping over time, as the charged off original accounts fall out.
What potential downfalls are there in entering into this program?
In these types of circumstances, are there typically pre-payment penalties? With almost 0% interest, it would make sense to continually look at paying off other debt ahead of this.
I am considering hiring an attorney to formally answer this letter to ensure I am protected, but any and all advice from you would be very much appreciated.
You want to bring the student loan current if your goal is improving your credit, and I am not sure the plan being offered would do that. The collection dropping from your credit would help, but that is years out.
I do not see prepayment penalties in this type of arrangement.
I am not sure this is the right thing for you to do at this time. I would suggest you call me for a consult at 800-939-8357, option rings to me.
Michael,
I called but went to a bunch of automated messages and then was hung up on. Because I’m at work, I couldn’t go through options.
With this scenario and with these being private student loans, I believe I’ll eventually have to pay. I don’t think legislation is going to allow for bankruptcy anytime in the next few years, especially before a potential judgment and garnishment.
My timeline for credit improvement doesn’t necessarily have to be immediate. A few years of on time payments with an agreed upon arrangement, according to my research, would be better than the judgement I would potentially face in the future being on there.
Also, like I stated earlier; The nature of this debt being private student loans, without any undue hardship, will not just disappear. If this is a chance to pay what I owe, over 30 years (more likely paying it off 10-15 years sooner), without any interest payments, at a very affordable monthly cost, seems almost too good to pass up. My fear is entering into agreement with Allied Interstate and having the debt sold and not being legally protected and bound to the agreement I potentially accept.
This settlement offer is on their letterhead and clearly dictates terms, number of payments, monthly minimum payment and interest rate.
Sorry about the phone system. It is usually pretty good. Just dial and press 2 right when your connected. If you get my voicemail be sure to leave a message so I know to call you back. I am usually available as late at 9 pm eastern, but am on the phone a lot. You could send me an email with the number and good time to call you. My email address is the same one you get these comment notifications from.
I would want to talk with you more about settling with Navient and what that would look like for you with a 12 to 36 month view.
The current Navient payment offer is a good one, and made more so by how attractive it is to you based on affordability. I would want to compare the offer with some of your lump sum settlement capabilities.
Good morning Mike,
I have another question. Salle Mae, place a negative report that I was late on making payment, when I never actually began payment until they contact me. Can I dispute this with the credit report agency referencing late payments, My payment have been on time every since they contact me about payment arrangement.
How much time went by between your loan payments having been set to be paid, and when you did start paying?
My husband became ill in July 2012 but the training facility report it in August or September 2012. They report late payment in January 2013. After they notified me on making payment. I have made payment from Feb 2012 to present, never a late payment, I have it set for automate draft to avoid late payments.
I have made payment since February 2013.
There really isn’t anything you can get Sallie Mae to do differently. Check to make sure the loans have been brought current now that you have on time payments for this long (you should). If not, let me know. If the loans have been brought current that is about as good as it gets.
This really is not something that will be dragging down your credit much at this point.
Michael:
I have an old debt that is settled (per NCEP not just because I say so). I have been trying to get them to send me a settlement letter for over a month. It is the only major hiccup on my credit report and I am in the process of buying a house…. Every time I call they say they will get it out, and they don’t!
What do I do to get this letter that my lender is going to need very shortly?
Thank you in advance,
The loan officer may be able to confirm the settlement to his/her satisfaction by calling NCEP.
You could file a credit reporting dispute with the credit bureaus, or perhaps even skip that step and file a credit reporting complaint against NCEP with the CFPB.
If it were me I would file the credit reporting complaint with the CFPB, if it is NCEP that is showing on your credit as unresolved debt.
Is NCEP showing as a paid collection but you are still be asked to document the settlement?
Hello Michael, I have a judgment claim on my credit report from a student loan that was sent to a collection agency. We set up payment arrangement but I know longer could pay it. I wanna take care of this issue though. If I was able to settle whats the amount I should try to settle for. Its a sum off $4500 and how should I address this. Its from the year of 2007. I had my bank look over my credit and they said that was the only thing that was hurting me.
Who is the debt collector you are dealing with on the student loan?
Dumas and McPhail Attorneys at Law.
Give me a call at 800-939-8357, choose option 2. I want to understand your situation and who all is involved better.
Ok I called and left my number!
It was nice talking with you on the phone today. Let me know if anything new develops.
Hi Michael! I had a few questions for you. A judgment was found on my credit report when my husband and I applied for a mortgage recently. I hadnt checked my credit report in a few months and it wasn’t on there back in May. The judgment shows $2491. I called the creditor attorney’s office to try and settle and offered $1200, which was all I had in the bank then. The lady I spoke with said that the actual amount due is $4100 and that this account couldn’t take a settlement…..HOWEVER, she would pass my offer on. This was on a Friday and she told me to call back on Tuesday. So I did and she said they came back with a counter offer of $2500. I can borrow that amount from my mom so I told them I could pay that. But after reading your info (thanks by the way!), I asked for a settlement letter. She said she would email it to me but I have yet to receive it. I know it’s only Thursday but is that normal? Would they delay in getting me the letter for some reason? She gave me her extension to call to make payment after I receive the letter. But I’m not sure how long I should wait for it before calling them and asking for it again. They aren’t aware that time is of the essence because we are closing on our home on 9/30 and I’m in a bit of a panic of getting it taken care of. Any suggestions on how to move forward?
You want the documentation in case they do not update your credit reports, so I would wait to get that from them. I would follow up with them on Monday if you have not received the letter by then.
Who is the attorney firm handling this?
Thanks for the reply! Blurt and Gaines is handling it. I spoke to a supervisor yesterday and got them to finally give me the letter. It has all the necessary info on there so I paid them. My other concern is that I gave them my payment information (check by phone) and they only gave me a confirmation number. They can’t send a receipt until the check clears. So I contacted my loan officer and told them the situation and they said that once the check clears, they can do a credit supplement to make sure it’s paid. I have no idea what that is! I am afraid that they won’t have proof of payment in time for our closing on 9/30. Any info on what a credit supplement is? And how long it may take with this supplement to show the judgment is paid?
Thanks again for all your help!! Your advice really makes me feel much more at ease!
Your loan officer may be referring to what is often called rapid re-score. This process is something mortgage brokers can use to get your score and loan repackaged after you resolve a collection debt on the fly like you have. How quickly that moves will vary but I have seen it accomplished in a matter of days.
Thanks for the reply! So, when they do the “rapid re-score”, is the credit agency reaching out to Blitt and Gaines and asking for proof of payment? I guess I don’t understand who reaches out to verify payment beyond what I’ve provided them with. Thanks for your help again! It’s really been awesome!
The loan officer has the ability to request the credit reporting agencies adjust their reporting as a result of material changes to your existing accounts (whether current with payments or in collection), and have documentation to substantiate those changes.
the letter i got from Northland has all the necessary bullets mentioned in the article, but instead of “settled”, “settlement of this account”, “accepted as settlement in full”, “paid in full” it says “resolved”.
it essentially means the same thing in my opinion. is it something i should be worried about?
thank you
Not in my experience. I would pay a settlement to Northland Group if it had that verbiage and everything else was in order.
Hi Mike,
I have an account that was placed with Convergent. I have a written offer from December for roughly $1800 to settle. This was not a solicited offer- it was mailed to me “out of the blue” by them. The offer gives me 60 days to pay. We are well past that time. I have reached out to them and have now been told that they can’t take less than $3400 explaining interest charges. I highly doubt this since it is only 8 months since their last offer. Anyhow, I have asked them for the settlement offer in writing and they won’t give me one. They only say that once they have my bank info, they will send a letter saying things are paid in full. I don’t want to let a deal go, but not having the terms in writing makes me nervous. As does giving them my bank information. I have reminded them that there was an offer in writing from them previously, so clearly they make these written offers in practice. They won’t budge. Any advice on how I should proceed? Thanks!
Here are a couple of options:
Call and talk to a supervisor and outline all of your concerns and the need for a letter. Many people I have worked with over the years are getting money from a friend or family member to pay, and the money or payment is not going to be released or available until the deal is in writing to show the person offering to help.
Record the phone conversation and cover all of the details. Tell them that you are recording the call and why (they refuse to put the deal in writing). Keep the recording until the letter does come, and then keep it some more.
I would not give bank account information until I got a letter or outlined everything in the recording.
Hello Michael,
I just got through posting on a different segment of the consumerrecoverynetwork regarding Midland Funding,Llc.. Assignee for Chase Bank. Basically, I acted as an interested party to negotiate a settlement for my son, as my husband and I would help him to supply the funds needed to avoid an imminent court date, We decided to do a conference call.
I negotiated a lower amount than was requested with the person who works on the debt collection line for the attorney representing Midland Funding, the attorney, Joseph M. Hall is associated with Lustig, Glaser and Wilson,PC in Waltham Massachusetts. A Summons issued to my son was delivered to him today, in Rhode Island at his residence.. The court date was supposed to be twenty days from tomorrow.
All I did was to explain that as a family we wanted to help resolve this issue but needed to know how we could find an amount we could agree upon. Since we reside in the State of Rhode Island, there is less protection for consumers than in other states. the amount Midland Funding was seeking was $ 10,640.43 and the costs of this action. I asked if they would accept $ 5000. After putting us on hold, the man returned to counter that Midland would accept $6395 which we will pay in full with no payment plan needed.. The man said that they would be mailing the settlement agreement from their office located in Waltham MA. My son said yes and we are now awaiting the settlement agreement in the mail.
I do have a few questions: Did I overlook something in just negotiating an amount? Are there other terms that I should have asked about? What can we expect to see in the settlement agreement besides the amount we agreed to pay? How should the final payment/ settlement amount be paid should we use a certified bank check, a U.S Postal Money Order and how should it be sent registered mail ,certified mail? Should we show up on the court date mentioned? We haven’t called the court for a date yet.
We were informed that a 1099 would be supplied for the amount that exceeded the agreed upon payment and would be reflected as income.that could affect his taxes.
We did not request that Midland Funding show proof of the debt as we know that my son has dealt with them as Midland Credit, in the past. This was before his fiancee passed away, his apartment burned down, and in 2007, he lost his job as a result of litigation that cost him and the whole family more that $50,000. He has gone through so much. This year, 2015, he finally obtained a job and attempted to settle this debt with Midland Credit by calling them, however, Midland Funding was now handling the account and they refused to negotiate with him. This debt is not yet ten years old which I believe would have precluded the ability to sue for any monies due them.This represents the highlights of all that has happened..
We would like to thank you for taking the time to answer our questions and hope that you can supply some much needed advice on what to do at this point.
Cross reference all the critical points I bullet in the original article above when you get the settlement letter from the Midland Funding attorney.
Whether I would suggest your son still appear in court will depend on the contents of the letter. Post more details when you get it.
It is not necessary to request a debt be validated when you recognize the debt as your own and simply wish to resolve the matter.
Hello Michael,,
I was unable to post a comment to give you an update on this site and do not know why. I waited for several days to be sure that you had not received my follow-up / update.
I, therefore had no choice but to do the following:
1- I checked the bullet points from the information you had originally posted.
the following are the important excerpts from their letter.
2-“…..Please be advised that our client has agreed to accept the sum of $ 6395.00 in full settlement of the above account provided said amount is received by our office on or before August 25,2015. ….Upon receipt of the settlement amount we will advise the Court that the claim has been satisfied.
The payment had to have been received in “a timely fashion” or the settlement shall be deemed null and void and any funds received will be applied against the full balance due on the account.”
On Monday, I had a cashiers check for the full amount made payable to the law firm, as indicated with an RE: Midland Funding and with the File number assigned from the law firm and with my son’s name. and sent this with the payment coupon Express Priority mail and signature required and tracking provided. The tracking number showed as having been delivered to the Waltham Post Office Box and signed for by a company employee .
I took three copies of the letter of settlement agreement.and envelope, for our records.
Should my son answer the summons or appear in court anyway?
Thank you for your assistance and any answers you may provide.
Thanks for the update M.L. I am always reachable by phone at 800-939-8357, choose option 2. Sorry you had trouble posting your prior update (it did not publish to the site).
The verbiage you shared is all standard and will meet your needs. I do encourage people to show up in court when there is a date already set in the near future, even after reaching a resolution like you have done. I only suggest this because of the potential for a mistake where the attorney at court that day does not have an accurate record of events (not common, but if you do this work this long you see it enough to encourage people to do something that prevents it).
What is the date set for the appearance?
Evening Michael,
Thank you for the swift reply.
The date was 20 calendar days after the date of serving the summons..(not to include the day the summons was served.) The summons was served on August 11, so countng from August 12, I estimate Monday, August 31st.
For the sake of your readers, if a summons is served in person by a sheriff or constable you only have twenty days to answer the summons. or you will lose by default and the judge can award the entire amount stated in the summons to the plaintiff and cour costs.. If a summons is sent via mail, you have 30 days from the date you receive it in the mail.
I tried to call Superior Court, but it was crazy busy. It is often faster to just go and find out what my son needs to do next. I made all those copies, just in case we need them. Hopefully, the clerk there will know what we should do or if we need to file an answer to the summons.
Actually, I believe that the attorney that they have listed as sending out this letter, is based in Newport, Rhode Island. The chances are that I can probably reach him.
The cashiers check is drawn on my credit union, but it could take a few days for the money to actually be available by whatever bank the law practice uses. That is one of the reasons I wanted to get the payment process completed on our end. I didn’t want them to have any excuse for saying that the funds weren’t available to them on or before the 25th of August. We have no problem showing up for the court date. I just remembered that Rhode Island court system is online. I can get the information by looking up by name and or using the case number.
Thank you again for your help. I will post an update after the court date so that your readers get an idea of what to expect. God Bless you for starting this website.
Yes I want to start the process. What is the best thing to do?.Do you think I should wait if it is close to the 7.5 years.
What is the amount Commonwealth Finance is trying to collect from you?
They reported $657.00
You could settle for some savings and reach your goals sooner. Decide whether it is worth a few hundred dollars to start home shopping early.
Good morning Mike.
I finally received settlement offer from Commonwealth. I have proof of my settlement. They would not report paid in full but would report paid settlement and if I decided to go back to Sprint I would have to paid the remainder balance. My money order has been sent CCRR. Thanks
Congratulations with getting your Commonwealth collection resolved SherrieD! I saw your other comment post about getting ERC settled too.
How many accounts do you still have left to contend with?
I have one more offer that is Military Star, that will be sent soon. I have education payments that I will double up on soon. I hope my credit score will increase soon.
Thanks Mike
Hi MIke,
I am back with more question. First, Enhance Recovery has accept the settlement but they are reporting it as collection settled. Do this verbiage effect the credit?
Second, I informed you that NCC accepted my settlement. Now they have sent me another collections. When I call and made arrangement to settlement. I asked did the settlement cover all three. He stated that it was the $657.00 and the two little account for $40.00 and $30.00 he company could not report on my credit report by themselves, But on September 29, I received a collection for $40.00. The notice states I should dispute withing 30 days. Well Mike, I call Touro to find out the days of this invoice and was told by the agent that this bill was paid. I am request a copy of paid bill that will be submitted to NCC. Can I report them to FBPC for false claim and stating that they can not report medical under $40.00. I believe that I have this conversation recorded.
What is your opinion?
Settling a collection account and getting that fact updated (a zero balance owed with paid/resolved/settled) is normal and what you can expect in nearly all instances like this. The verbiage is not an issue when you settle charge off debts in collection.
I would send a written dispute certified mail regardless of what was said on the phone,and yes,I would suggest filing a collection complaint with the CFPB.
Hi Mike,
What is the least amount of debt that can furnish to your credit report. I just talked to the hospital. I was told that this debt was forward to a Law Firm. Well last year I disputed the entry because I had received several statement saying “this is not a bill’. We I don’t remember if it was one of the disputes entry since the Firm had them removed. The hospital does not keep the bill no longer then 4 months. Only they the Specialist can tell me is that service was rendered in June 2010. I don’t want this on my credit report. I want to dispute because I have a secondary provider. And I have to 10/29/15 to dispute with NCC. What should my next steps be.?
I have managed to increase my credit score with Equifax to 717 and Transunion to 680. I believe this entry will bring it down. Thanks for any assistance you can give me.
I would file the dispute and see what information that yields.
I have seen collection accounts as low as a one hundred dollars appear on credit reports.
Good morning Mike,
Referencing my above situation. I just discovered that NCC/Commonwealth Finance System, Inc. had no right to collection on this medical invoice. I spoke with my insurance and secondary provider who states, as a patient I had to no patient responsibility to pay. I have records showing no payment due. Can I get NCC/CFSI to refund my money. I have sent them evidence that this was a false collection. They have report to the credit agency for over a year report this as a debt. What else can I do to get my money return. Do I need to report to CFPB. Thanks for your help again.
You have been a life saver.
I would file a collection complaint with the CFPB if the money is not returned to you on your first request.
Hi Mike, I have another issue. I just reviewed my credit report thru Credit Karma who is stating that Transunion has added another collection. This is Commonwealth Finance. I have not received any letter or documents from them. They had an entry on my credit report before but it was removed. Now they have returned. Should I contact them and ask for a d/v letter then offer an settlement. This is a hospital debt but I don’t know which year it was establish. You see in 2009 I had heart surgery and a couple the invoices received from the hospital stated ” this is not a bill” but later refer to collection. I kept some of the paperwork. Commonwealth Finance just place this collection on my report 7/18/15. But I have not received anything from them (no letter or calls). What advise can you give me?
I would want clarity on the bill from the service provider and cross reference any of that with what insurance covered. If this debt is 6 years old it should drop from your credit reports soon. The age of this debt can also make it hard to research.
Are you going for a home loan anytime in the next year or so?
They have refused to put the tax disclosures on the letter (I brought it up several times before). The guy said it’s the risk I had to take. I persisted. He put his ‘supervisor’ on the phone who preceded to tell me that I didn’t know what I was talking about and she would not sign off on it.
So I told her it’s too bad that we negotiated this far and to have this little clause be a deal breaker. Then she put her ‘supervisor’ on the phone with me. This last guy said he would work on putting that clause on the letter. We’ll see.
Thank you for all your advices. You have done great services for those of us who are not used to dealing with these issues. I had just decided to settle with Atlantic Credit & Finance in VA (original creditor was Citbank). The amount due was $16,202 and the settlement amount is $10,531. $531 is to be the 1st installment and $225/month for 44 months. ACF wants to electronically draw the funds from my account. I don’t feel safe that they have my bank account information but it is the only way they will settle. Is it common for the collection agency to do that?
Would it be possible for me to upload the settlement letter with the payment schedules (or I can type it here) for you to review? Just want an expert opinion on this settlement in case there is something I missed.
Thank you for your time.
It becomes much more common for debt collectors to want to schedule ACH drafts from your bank account when the deal you negotiate involves so many payments over that long a period of time.
Post a comment reply with the details of the agreement to settle with Atlantic Credit and Finance and I can offer more feedback from there.
Hi Michael,
Here is the settlement letter:
Original Creditor: CITIBANK, N.A.
Original Creditor Account #: xxxxx
Current Creditor: Atlantic Credit & Finance
Special Finance Unit, LLC (‘ACF’)
ACF Account #: xxxxx
Balance: $16,202.33
Settlement Amount: $10,531.51
Dear xxxxx
Atlantic Credit & Finance would like to offer you the arrangement listed on the reverse side of
this letter in order to resolve your account.
Once you have completely fulfilled your payment arrangement, and in the event that Atlantic
Credit & Finance is reporting your account to the credit reporting agencies, we will report to the
credit bureaus that your account has been satisfied and ACF will release you of the obligation.
We are not obligated to renew this offer.
If this is not what you agreed to, please call your representative
In reference to ACF account # 4642521, we would like to offer the following payment arrangement:
This arrangement contains 47 payments totaling $10,531.51 to be paid between 07/31/15 and 04/05/19.
07/31/15 $200.00
02/05/16 $225.00
[Edited to remove monthly payment duplication]
I have a separate account that I can use for the purpose of handling the debts as you advised. Is there anything else I should be concerned about?
Thank you for your time.
Given the collection agency involved, and the duration of payments you needed (in order to afford some kind of deal at all I assume), the letter would be okay for me if I were in your shoes.
Couple of things:
How long ago was it you last made a payment on this account to anyone?
Are you 100% confident you can pay the $225.00 monthly?
Last payment to Citibank was in November of 2014. I’m quite sure I can pay the $225/mo. For $225/mo, they will settle for $10,531. I figured it’s a fair amount since I do owe the money.
They did say I could spread it over longer period and ‘renegotiate’ the balance along the way and there’s not prepayment penalty. I just want it to be over with sooner. Do you think I should start with a lower payment and just pay more when I can? It will make first few years a lot easier on me. I think I will go back and negotiate $130/mo for 77 months. What is your opinion?
Is AFC a reasonably reputable company? BBB has lots of complaints on them.
Again, thank you so much for your time.
I would be looking for any opportunity to save up and offer about 30 to 40 percent of the balance owed as a settlement. That goes for today, or 20 months from now.
Atlantic Credit and Finance is an established collector who I would categorize as one of the easier to work with to resolve debts.
You will be hard pressed to find a legitimate debt collector without BBB complaints. It is the nature of the business.
Calling back to get a longer time frame could impact the structure of the deal. Let me know what they say.
Hi Michael,
I got this today from ACF. I’m ready to proceed with this arrangement if you think there is nothing ‘fishy’. They are pushing for bank information in a way that made me uncomfortable. But it’s probably nothing.
Original Creditor: CITIBANK, N.A.
Original Creditor Account #: xxxxx
Current Creditor: Atlantic Credit & Finance
Special Finance Unit, LLC (‘ACF’)
ACF Account #: xxxxx
Balance: $16,202.33
Settlement Amount: $10,531.51
Dear xxxxx
Atlantic Credit & Finance would like to offer you the arrangement listed on the reverse side of
this letter in order to resolve your account.
Once you have completely fulfilled your payment arrangement, and in the event that Atlantic
Credit & Finance is reporting your account to the credit reporting agencies, we will report to the
credit bureaus that your account has been satisfied and ACF will release you of the obligation.
We are not obligated to renew this offer.
If this is not what you agreed to, please call your representative right away at 1-800-888-9419 to
discuss the best possible alternative.
Thank you for your cooperation in resolving this matter.
OUR OFFICE HOURS ARE 8:30 A.M. to 9 P.M. EST MONDAY – WEDNESDAY, 8:30 A.M.
to 5:30 P.M. EST THURSDAY AND 9 A.M. to 5 P.M. ON FRIDAY
In reference to ACF account # xxxxx, we would like to offer the following payment arrangement:
This arrangement contains 79 payments totaling $10,531.51 to be paid between 07/31/15 and 12/20/22.
07/31/15 $200.00
04/20/16 $130.00
[edited to remove monthly payment duplication]
Sorry to post all the payments. I just wanted to present all of the info that I have. Thank you!
The typical tax discloser about forgiven or canceled debt appears to be missing from the letter, but the content of the letter I could use effectively if any later mistakes were made with my account.
They have refused to put the tax disclosures on the letter (I brought it up several times before). The guy said it’s the risk I had to take. I persisted. He put his ‘supervisor’ on the phone who preceded to tell me that I didn’t know what I was talking about and she would not sign off on it.
So I told her it’s too bad that we negotiated this far and to have this little clause be a deal breaker. Then she put her ‘supervisor’ on the phone with me. This last guy said he would work on putting that clause on the letter. We’ll see.
Update: I call them 3 hours after that last conversation to follow up on the letter they were going to email me, I asked to speak to the last ‘supervisor’, I got his voicemail. Then I asked to speak to the guy I’ve been dealing with, got his voicemail. I left mssg and so far no return calls and no email which is unlike these collectors.
So, did I stir up something they purposely omitted (the report of the discharge amount to IRS). I am anxious to settle this but I now I feel uneasy. I hope I don’t have to renegotiate again because I am ok with the settlement arrangements.
Any thoughts?
Thank you!!
The tax disclosure is not a deal breaker. It is something companies do to cover their own butt, not really yours. The absences of the disclosure is an oddity, and something I pointed out because it is so common, to not see it is noteworthy.
I would not care if it is on there or not, and would not let a deal pass me by over this.
Thank you. Still waiting for them to contact me one way or the other.
I have a trial scheduled with Midland Funding. I negotiated, and received the following as a settlement letter via fax. Would you have time to review this?? Could they still try to collect court/attorney fees if I pay the settlement amount by the due date? The current balance due is the original amount, and the settlement amount is what we agreed upon. I replaced those with x’s below. The wording is real fishy as it says the “settlement amount” may or may not include principal, interest or other charges that may apply to this account.
Thanks so much.
2015/07 /23 12:56:53 2 /3
July 23, 2015
Dear xxx,
Contact Information: Tel.: (866) 300-8750
Facsimile.: (877) 411-6864
P.0.Box2121, WarrenMI48090
Current Owner.: Midland Funding LLC
Original Creditor.: CITIBANK, N.A.
Original Account No.: XXXXXXXXXXXX-8115
Internal Legal Account No.: xxx
Visit Us Online at
http://www.midlandcreditonline.com
This letter confirms the parties’ mutual acceptance of a settlement on the above-referenced account based on the
following terms:
Current Balance DueA as of July 23, 2015: $xxx
Settlement Amount: $xxx Due Date: July 29, 2015
When your account has been paid in full, and if data related to your account is still being furnished to the
consumer reporting agencies, the three major consumer reporting agencies will be notified that the account has
been paid.
The Current Balance Due includes principal, other charges that may apply to this account as of the date of this
letter. The settlement amount may or may not include principal, interest or other charges that may apply to this
account.
By you entering into this settlement arrangement and making the agreed payment, you ackowledge the
existence, justness, and amount of this claim. Please sign this letter and return it with the agreed payment to PO
BOX 939050 SAN DIEGO CA 92193-9050. If you have already established payments by other means, then
please return the letter only.
When your account has been paid, and if data related to the account is still being furnished to the consumer reporting
agencies, a request will be made of the three major consumer reporting agencies to report Midland Funding LLC’s trade line
related to the above referenced account as paid. We will report forgiveness of debt as required by IRS regulations. Reporting
is not required every time a debt is canceled or settled, and might not be required in your case.
Important Disclosure
Federal law prohibits certain methods of debt collection, and requires that we treat you fairly. You can stop us from
contacting you by writing a letter to us that tells us to stop the contact or that you refuse to pay the debt. Sending such a
letter does not make the debt go away if you owe it. Once we receive your letter, we may not contact you again, except to let
you know that there won·t be any more contact or that we intend to take a specific action.
If you have a complaint about the way we are collecting this debt, please write to us at 2365 Northside Drive, Suite 300, San
Diego CA 92108. email us at cu:,iqrnerservice(l>rncm,a.Gqm, or call us toll-free at 800-265-8825 between 9:00 A.M. and
5:00 P.M. Pacific Standard Time, Monday- Friday.
The Federal Trade Commission enforces the Fair Debt Collections Practices Act (FDCPA). If you have a complaint about the
way we are collecting your debt, please contact the FTC online at http://www.ftc.gov; by phone at 1-877-FTC-HELP; or by mail at
600 Pennsylvania Ave., N.W., Washington, D.C. 20580.
The balance listed above includes any charges that may apply to this account as of the date of this letter. In addition, charges
may continue to accrue on this account until the account is satisfied, and We may have incurred additional costs and
connection with lawsuit. Thus, the amount we may be willing to accept in settlement of the lawsuit may be greater than the
total amount above. We are not obligated to renew this or any other settlement offer.
No tricks in there. The reference to may or may not include fees and interest is just CYA stuff. You are agreeing to pay Midland Funding a reduced amount. If that amount is agreeable, it is not contingent upon anything else than your ability to afford it.
Nothing wonky with the legal fee reference at the bottom.
I would take this letter and confidently settle with Midland if the debt were mine.
Hello michael,
I was terminated from my job 2 years ago, i did my best to pay all the credit cards. I will be getting a sum of money that i would like to eliminate my debt with, 2 small bills $76 and $136 have went to collections and 1 $6500 from citi has been charged off, all 5 of my other accounts are current, i have sent letters to most of my creditors asking for a settlement at roughly 50%. I have 2 questions, 1st how long does a response usually take feom the creditors? And the cards im not late on how likely are they to settle? I only told them im unemployed, and can no longer maintain payments,i did not mention the sum im getting. Thank you.
To add to that the sum would not elliminate my entire debt without settlement.
I generally do not advise negotiating or proposing settlements in a letter you send. It is different if you get a settlement offer letter from a creditor or collector, but even then, I encourage you to call in to counter offer.
You often will not get any response to your letters at all.
You often reset the SOL to sue with written acknowledgment of the debt and offer to pay.
It is best to put the deal together on the phone, and then get everything in writing before you make a payment.
The accounts you are current with will tend to have no ability to settle for less. Not until you are behind, and for several months, will settling for less be an option they can discuss.
It would be a good idea if you called me for a consult. I can be reached at 800-939-8357, choose option 2.
Good afternoon Mike,
On a previously website you indicates that you had information “concerning the best time to request a settlement or to negotiate. i am request an settlement with ERC. The debt is $595.00 but they are request that I settlement for 303.00. Is this a good deal? ERC wanted me to provide banking information before receiving a settlement letter, an addition to post dating a check over the phone. Is this illegal? What is the best deal to settle? In a previous blog you stated that I should record the conversation, can this be use in lieu of settlement letter from the collection agency.
Smaller balance debts do not always settle for the best rates. 50 percent is not all that bad a deal on this amount.
If I wanted to get a settlement done, and they simply refuse to document it before the payment is in the system, I would indeed record the call start to finish, hit all the highlights, and fully identify the speaker, etc., before setting up or making payments. I would keep that recording in a safe place (backed up on my computer and one or two additional hard backups).
I would tell them I am recording and why (they refuse to send the deal in writing).
Hello. I have been attempting to settle a debt with First Financial Asset Management. They absolutely refuse to give me a statement in writing detailing our verbal agreement for repayment. I want to pay this debt, have agreed to pay $200 a month over the next 48 months to pay this debt in full, but it is “not their policy” to send out letters, emails, or fax statements showing the agreement. Is there any law that requires them to furnish documentation of a verbal agreement? Thank you in advance for your assistance.
Oh, yes, it is a valid debt! We’ve already verified it. I just want to pay it, set up an allotment to have it paid every month, and move. All I want is something in writing.
There are only a handful of states that require collectors to put agreements in writing. What state are you in?
You can also record the conversation you have with the collector at First Financial Asset. Keep that recording and a copy of very thorough notes of everything that was said, by whom, and on what day and time, leading up to that phone call. It will help if you need to resolve a dispute later.
Mr. Bovee,
I have a question regarding settling an old credit card debt.
I opened a credit card account in 3/2006. The last payment I made was in 6/2013. The account was charged off in 12/2013.
Last week I received a letter from US Bank and Portfolio Recovery Associates that this debt was sold/purchased by PRA. The amount is $5,555.88. This debt is not time barred in my state (not for two more years) but regardless, I’d like to settle with them to just get this over & out!
My question is this…. in your experience and professional opinion, do you think they’d accept a final offer of $2,000? I’m hesitant to contact them until I’m feeling more confident about this offer because it’s the max I can do!
Thank you,
Carmen
I will leave my reply for any other follow up information you post because of how much we covered in the phone consult.
For the benefit if other readers I will say again that realistic settlement percentages with PRA tend to be around 50%, but a tad lower is possible when conditions are right.
Hi Michael!
I did read a lot of the comments here before posting, and I did watch some videos after we spoke. I’m giving a lot of info you already know in case other readers might be helped.
I called Professional Recovery Associates and they gave me a nice song & dance. The first woman I spoke with (after I told her my story) said they would work with me, and passed me on to her supervisor. Again, I explained my circumstances & my desire to send a certified check via certified mail to settle the $5,555.88 for two grand. I was put on hold…offered a settlement of $4500. Again, I expressed my desire and the amount available…another hold, then an offer of $3,100. What they REALLY wanted is my $2,000 as a don payment and then to make payments for the rest. No, thank you.
Lady #2, (the supervisor) said that, “…before I go to our vice president to see about cutting this further you have to be willing to come up on what you’ll pay.” I told her I could go up $100, maybe two….but that was not enough for her and I could hear her trying to get tough.
I told her I didn’t want to get into a payment plan, I just want to make a one payment in full on a negotiated amount. They really want my bank account number, to make a “…secure payment, that will be insured through my bank and I won’t have to worry about it getting lost in the mail.”
I told her I’d think about it and call back. She warned me I’d have to begin negotiations all over again. I told her that is fine. I asked if should call her, or the first lady, she said no, just call. They told me they only have had my account for two weeks and could tell by the payment history (prior to the default) was excellent so they knew there was an event that occurred.
I will call next week & see what happens.
Thanks again!
Carmen
Our B of A account is in the hands of Couch Conville Blitt. The amount of debt is 18,800. We are fortunate enough to have a family member help us pay off this debt. So we talked to Couch and made a settlement with them for just 11,000. We had to make a first payment of 3800 that week and we asked them for a settlement letter which they said they would mail us one. Its been a week now after making that first payment and the next one is due on july 30 but still no settlement letter in the mail yet. Should we be worried there’s no settlement letter yet? Should we keep bugging them to send one?They seem very professional and hopefully they can be trusted!
I would call and cover the details of the settlement you negotiated and record the phone call. Let them know you are doing so, and then request the letter to be sent again as something may have prevent it from getting to you.
I would also suggest you have good notes at this point of all prior conversations with them, including dates and times of who you spoke with. This is all just in case and while things are more fresh in your mind.
Hello Michael,
I hope you can provide a second opinion and help me sort out my doubts and relieve some of my stress regarding a settlement letter from MCM. The figures used are approximate.
I retained an attorney last month to help me settle one debt collection lawsuit (for about $2500) and settle another collection account (for $30,000) which has not yet gone to a lawsuit. Both accounts are with Midland Credit Management, and are debts that I recognize as valid.( I defaulted in early 2010).
My question is in regards to the $30,000 account.
My attorney, after just a couple days of negotiations, received a faxed settlement letter from MCM and he thinks its fine, but when I looked at it carefully, it makes me very nervous.
The letter has the main bullet points outlined in your article (name, date, account numbers,payment terms, MCM letterhead, and its being sent by a verified account manager at MCM, etc etc) but my question is that I think the wording of the letter and the payment terms is fuzzy and confusing to me , so much that I think the letter is open to misinterpretation, not in my favor.
First, to clarify, I am now able to fully pay a $9000 lump sum to settle the $30,000 balance ( which was originally about 24K , plus interest since 2010 till now) . MCM had been sending me settlement offers by mail on this account for quite a while (which I had ignored), including one for $9000 lump sum, but they stopped sending the offers in March 2015 , about the same time the other smaller account went into legal, and is now in lawsuit. This settlement agreement has already been funded and payment sent to MCM last week, but I am very nervous that I may have been too trusting of my attorney and I am extremely anxious of a possible bad outcome to this.
The pertinent wording on the current settlement offer is as follows:
———————————————————————————————-
“Dear (my name)
Congratulations on taking the first step to resolve this debt. This letter confirms the settlement arrangements on the above reference account, with an exising balance of $30,000.
The settlement terms we have agreed to are as follows:
Agreed-Upon Payment Amount: $9000
Initial Payment Amount: $8000
Initial Payment Due Date: 6-29-2015
Monthly Payment Amount: $1000
Due Date: Last day of each month
This settlement arrangement is made in good faith and is contingent upon payment of the total settlement amount. If the payment instrument is returned “not paid” for any reason, this letter will be null and void. In the event you fail to make all payments on time and as agreed, this agreement will no longer be valid. After receiving your final payment, we will consider the account paid*.
Should you have any questions regarding your payment arrangement or for further information, please don’t hesitate to call me at #####, ext ###.
Sincerely,
(Name), Account Manager
*If you pay your full balance, we will report your account as Paid in Full. If you pay less than your full balance, we will report your account as Paid in Full for less than the full balance. ”
—————————————————————————————————-
At the end is a payment certificate stating Amount Due: $9000 and due date 6-29-2015.
Also, the faxed letter does not show a signature by the Account Manager, although it is confirmed that this Account Manager spoke by phone to my attorney.
My questions and doubts have to do with the fact that I am not sure what this letter is saying!!
The letter uses the term “Agreed Upon Payment Amount” = $9000, but then later uses the wording
” total settlement amount”. So are those two terms interchangeable? Is the “total settlement amount” in fact = $9000??
and I am nervous about the wording of a $1000 monthly payment being due “last day of each month”. I clearly told my attorney I wanted a lump sum payment and funded an escrow account with more than the $9000 lump sum payment, but my attorney said it was written that way
because during negotiations she stated that I only had $8000 on hand and needed to secure an additional $1000 as a negotiation tactic to get them to agree to the $9k amount, and my attorney said something to the affect of “thats the way MCM writes these letters up” or “thats the way they do this”, but absolutely assured me that the “settlement amount” is $9000.
What do you think? I am absolutely nervous and anxious about this, and we have not heard anything back yet from MCM even though the full $9k check was sent on June 23.
I absolutely hope you ultimately tell me there is nothing to worry about.
Thank you so much for your time,
Jorge
Thanks for taking the time to post all of the Jorge. I think you have nothing at all to be worried about. With this letter (keep it in a safe place), and the proof of payment, you could fix any error or omission, should one occur.
If something does go wrong, in any way, post an update and lets go from there. The vast majority of settlements go smoothly, and that goes for Midland Credit too.
Dear Michael,
Thank you very much for your prompt reply and it definitely helps alleviate my fears. I will certainly post what outcome results from this.
Thanks a million.
Michael,
Just to further clarify what my fear is, I am afraid that they will take my $9000 payment as just a payment and not a full settlement payment and will expect me to keep paying $1000 a month until the entire $30,000 balance is paid. Am I being overly paranoid? and if not, why do you think they are so loose and undisciplined with the terminology they use in this letter? Is this kind of stuff typical, I wonder.
Yes, you are being overly paranoid. There reference to the 9k being the agreed upon settlement is in what you shared. The normal disclosures I expect to see in a Midland settlement agreement are there (about credit reporting a settlement).
You are all set, and with a good settlement deal too.
Should I start to worry now?
My debt settlement payment was due June29 and my attorney told me she mailed the payment on June 23, but now I find out she used regular mail only. As of now, MCM says the payment has not posted yet.
I assume “posted” means the check arrived at their office and is logged in as payment on the account. So the deadline has passed and they have not acknowledged receipt of payment, to me this is a disaster because potentially they can cash the check and not honor the agreement since they could say it did not arrive in time.
I have lost sleep over this and this development does not help.
I spoke to my attorney and she says to wait until Monday to see if it posts, and that the MCM accounts manager person emailed her to the effect that she will still honor the settlement. My attorney says if nothing posts on Monday then she will do a stop payment on the check, but of course, my fear is that MCM may have already deposited and cleared the check, hopefully I will find out on Monday.
To me, these kinds of things continue to indicate incompetence on behalf of my attorney and I should not have trusted her…I hope I am wrong.
If the rep at Midland Credit sent an email saying they will honor the agreement than you have little to worry about.
I understand the concerns about debt collectors, and every step should have been taken to get the payment confirmed by the expiration date of the settlement agreement. Was this a situation where you were sued and hired the attorney, or did you enroll in a debt settlement program with an attorney?
Hello Michael,
Thanks for your reply.
For this account, I hired an attorney to settle this particular debt since she was also helping me with a lawsuit on another debt with the same creditor, junk debt buyer, MCM.
This is the latest as of today July 6 morning:
The MCM account manager has informed my attorney that the payment posted on July 2, and has indicated by email to my attorney that the debt is paid and that a “paid letter” will be sent by MCM within 30 days.
My questions and doubts persist. The payment posted outside of the due date , which was June 29. I get the feeling that the paid letter (which I presume is the same as the “letter of satisfaction”) is created by someone else at MCM, not that particular account manager that my attorney has been emailing and communicating with, what if they use the date of posting as an excuse to say that the payment arrived late?
Is this 30 day period a standard, usual, typical amount of time, why do they take so long to send out this letter? that means I have at least another 30 days of worry in my chest ahead of me.
Your opinion would be greatly appreciated.
Given the update you provided, I have no worries at all. You can even use the communication they sent your attorney later on with a regulatory complaint if need be.
The 30 days turn around time on confirmation letters like this is normal.
While you do want to be hyper aware of the details when dealing with debt collectors, try not to take it to the point of losing sleep or other manifestations. If something goes awry I can help you, and just with the details you have provided so far.
Hello Michael,
Thanks for your reply.
To finish properly answering your previous question, on this particular 30K collection account, MCM had not gotten to the point of suing me yet, all they did was stop sending me offer letters in the mail, last one was February 2015. They sent another , smaller debt of $2500 to attorneys and filed a lawsuit on that in small claims court in May 2015..
My question remains, should not my attorney have sent the payment by some sort of registered method so that , as a minimum, we would have proof of when the payment was mailed? Is that not proof of incompetence by failing to do that? My attorney gets very rude and testy when I ask questions, so , like an idiot, I was also afraid to ask her if she did something as basic as sending a 9K payment by registered mail….I fully blame myself for that, but she should know better!
I have another large credit card debt collection account remaining after this one is hopefully cleared up..and I do not want to go thru this attorney for that other account, which is with Cavalry SPV I, LLC.
This one is also for about 30K.
Cavalry has sent this one to the attorneys and they sued in August 2014 but could not find me to serve me so the suit was dismissed in Feb 2015 , without prejudice, so they still have until December of this year (SOL)to refile a lawsuit. I may need your help in settling this one, please advise on what you charge on something like this. Thanks
I would have handled payment differently than she did to insure timely delivery, but she has the back up she needs with her later communications to and from Midland Credit.
As for the Cavalry account, call in for a consultation at 800-939-8357 and choose option 2 so I can get into the details of that account and your ability to deal with it. As far as fees go, they will not be more than 15% of the savings achieved. Actual fees cannot be known until the deal is negotiated and put in front of you in black and white, and then accepted by you.
Michael,
This is company collecting from me https://www.bh-pllc.com/ in regards to a LVNV account that has a judgement against me. I checked my credit report and the judgment number he gave me was what I showed on my credit report. They say they cannot send me a collect agreement until I give them payment method. This scares me but I assumed that I had no other recourse for fear they would garnish. I set payment up for Friday for one time payment. Let me know your thoughts. Thanks
sorry did not mean to double post. My browser did not show my post so I thought it got deleted or didn’t post.
The settings for the comment system are tight. Any comment that includes a link has to be approved before it goes live.
I would not have done it that way, but it will likely be okay. If it were me I would call them and rehash the deal and record the call (letting them know why). I would keep the recording until the written agreement shows up and then I would keep the recording for longer.
You should also take notes of all the calls, what was said by whom, and the not the date, time of day, and the numbers and extensions you called or that called you.
So you would let them know that you are recording the call also? Thank You for your help
Absolutely I would, and even offer an explanation as to why you are recording (they refuse to put the deal in writing).
Thank You
Michael,
On the recording do you think it matters that I didn’t get him to state the company name?
He did say his name as Mr. Green but not company. I forgot to ask him to say it.
Thanks
Ben
With all of the other bread crumbs, you have a trail the size of a city sidewalk that leads to the identity of the debt collector. If it were me I would have no problem with it.
Michael,
I have paid this off and the law office keeps telling me they sent notification to me that it was paid. But I have not seen the letter yet and it has been about 2 months. Do you have a recommendations on what I can do?
Thanks
Ben
I sent a debt settlement letter to a couple of creditors . How long should it take themto reply back if they accept it or not?
Many will not respond to written offers you send. If you are writing to one who has a reputation for responding, it can take a couple weeks.
Who did you write to?
Why have you chosen to send letters instead of negotiating over the phone?
Midland Credit Management sent me an offer to settle a several-years-old $10k credit card debt in IN for $3k, but I did not get the letter until after their stated due date. Then I received a “pre-legal notification” that they had tried to contact me and are now “considering forwarding this account to an attorney for possible litigation.” I called them and asked for a similar offer to be resent to my current address in NC so that this could be finally settled. Now they say my account is in a different department since I did not respond, so the least they can accept is $8600. They would not let me talk to anyone but “my account manager” when I called back in hope of talking to a different person with more options; everyone there seems to sound like the same Hispanic guy with different American-sounding names! (Joe, Daniel, and Scott so far) Obviously, they are “all” looking at a computer screen with the last number I was told.
I have read everything on your excellent website, but am unsure how to proceed. Do I keep calling “Joe” trying to wear him down to the original $3k ? Or does the fact that I called tip him off that I care and surely have less ability to tolerate this business than he does? (I lost my job in 2009 and am just starting on social security as husband got cancer and died last year. I had five credit cards in my name that went unpaid; three ended collection attempts in 2014 and sent me 1099’s for discharged debts, one I settled for about 40% last year, and now these guys show up.) I have no other income but an inherited retirement account that is taxed big-time if I withdraw anything…and it has to support me and disabled son for 30-50 years or so. Your honest advice, please: should I just give “Joe” whatever he wants and worry about our future later, or hang on and try to negotiate further, knowing we need that extra $5k more than Midland does?
Thanks much—Jan
You definitely need that 5k more than Midland does. Something about your account appears to be causing them to be sticky on the amount they will accept. The 3k auto generated offer can be based on different criteria that may be the result of a computer algo, where what is being looked at now is with a more critical view. I can dig a little deeper with you in a consult if you like?
You can email me back at the address you get these comment notifications from.
Hello Michael,
I recently contacted the offices of Kimball Tirey St John in San Diego. I Called to negotiate a settlement of a judgment filled against me. The collections manager I spoke with initially told me that his client would accept no less than 50% of the amount levied against me and two other members of my family. He later agreed to propose a %25 percent payoff to his client and call me back. When that didn’t happen I called once again.
This time the same person told me that 50% was the best that could be done. I offered to pay that amount so long as I could have the agreement to settle in writing. He went on to say that the Attorney’s at his office will not allow him to put anything in writing because the case is now closed and has passed the statute of limitations for collection. I asked to run that by a manager but was denied I was told that The best I can do is “take a leap of faith”, that he’ll do what he says. I don’t think I’m asking for anything out of the ordinary:
-The amount to settle
-Agreement that it will be reported as Paid Collection
-Closure for all individuals effected
He also said that even if I offered to pay the amount in full they would put nothing of our conversation in writing. This issue is really hurting my ability to secure housing but feel I’d be a complete fool to send my money with absolutely no guarantee. So I’m stuck do I have any recourse here?
Regards,
Ricardo C.
Thanks for sharing that information about the Kimball Tirey St John law firm. Never take a leap of faith with a debt collector. Can you tell me the name of this particular debt collector working for the firm?
What is the nature of the debt?
Hi Michael,
Thanks for the reply, his name is Jed when I looked at the employee directory I found Jed Sternberg so I assume that’s him.
I co-signed on an apartment lease 5 years ago. It’s a debt to a property management company in California. I’ve considered trying to make a deal with the management company directly, but since they hired an attorney to collect and the account is now closed. I’m not so sure it would satisfy the judgement against me anyway.
You can negotiate the lump sum payment as conditional for updating the court that the judgment is satisfied.
How close are you to any of the firms physical offices?
I’m in Oregon, all of the offices are back in California. It’s bizarre to me that the firm wont put any of the verbal agreement in writing even if I agreed to pay it in full right away.
This isn’t some kind of collections practice violation?
No, the refusal to reduce an agreement to writing is probably not a violation.
I will send you an email with contact details to a couple of really good consumer law attorneys in Oregon. Both likely offer an initial consult at no charge, and if they can help you, charge fair fees to get this over the goal line.
Thank you Michael, I really appreciate your help and advice on this!
Hi Michael, I’ve recently been served with a lawsuit from the attorneys at Midland Funding on 3-26-2015. With this amazing website, I was able to negotiate a settlement of 1900 vs. original balance of 2600 prior to any court appearances. As per your advice on agreements, I asked for them to send me a settlement letter and they agreed. I’ve made my payment, however, I am concerned as to whether they will dismiss the case in time before my 30 days are up. The account manager on the phone told me it can take up to 45 days. Would you advise that I still send an answer to the court? I do not want a default judgment against me. Thank you so much for your help, this forum has helped me learn so much!
If you have everything in writing, paid on time, and have proof of that, filing an answer may not be necessary. It can take time for the attorney to get the dismissal in. 45 days is not unreasonable.
Does the agreement with Midland or the attorney speak plainly to the dismissal? If so, you will be okay. If there is some error, you will be able to get it corrected quickly.
Thanks for posting, and for your kind words too. Please post an update to this string when everything is updated with the courts, credit reports, etc.
My daughter filed for Bankruptcy. In the process of filing her car loan was given to Consumer Portfolio Services Collection Agency. The car was included in the bankruptcy and my daughter no longer wants it. I called CPS and we reached a verbal settlement agreement. They said the agreement was noted on the account but I have no access to those notes. I secured the funds, then asked them for a written settlement agreement which they refused to provide. When I asked why they told me they don’t do that because of the Bankruptcy and once I sent the funds the title would be released. This sounds very shady and maybe even illegal to me. What should I do?
Get them to send a letter or record the phone call telling them you are and why. Also take notes of the date, time, and person you spoke with.
Consumer Portfolio Services is no stranger to bad debt collection behavior. They appear to be still working off a prior FTC enforcement action. This obviously means you should be careful dealing with them, but can also mean they would prefer to stay out of trouble.
If I need the title, I would proceed with recordings etc., and if things did not go as agreed, I would tell them you will look at your legal rights, and file complaints with the CFPB.
Ask to talk with a supervisor too (maybe even first). Some of the prior issues with Consumer Portfolio Services were apparently based on loose (read terrible) oversight of the collectors.
Great news – I have someone who is going to loan me the full amount I owe. What is my next step? How do I keep a default judgment from happening now? My time is up on Monday, April 13. Also, I now have access to a fax machine.
Call them and let them know you have someone willing to help. They will pay if you get a letter outlining the dismissal. You need it faxed. If they do not send you the letter outlining the dismissal for payment, and were it me, I would file an answer to the complaint denying you owe the amount stated. That will avoid a default judgment and give you the time you need to get everything documented.
I really do not trust Blatt, Hasenmiller, Leibsker & Moore because of the bait and switch I am concerned they were running on you. Even though you will be able to pay this, I would really appreciate it if you could still share the information I asked about in my previous comment. You can email it to me if you like.
Hi Michael,
On the phone I told them I could borrow $1500 to settle and they wanted me to do it over the phone. I asked them to send me a letter agreeing this would settle the debt. She said the amount of $1500 does not settle the debt, but she could send me a letter that would show a payment. I only sent them the one email explaining my situation. I’ve only spoken to them on the phone two or three times. The first lady said they could not settle because I’m being sued. The second one was more open to settling after learning of my situation. She had to go to her supervisor to get the $1500 settlement approved.
I agree this letter they sent me does not show a settlement.
Also, how do I reply to the lawsuit? I thought I was doing that by writing and calling them. April 13 will be the 20 days I have to reply. I sure don’t want a default judgment.
Thank you so much for your help.
Lisa
It sounds like the last collector with Blatt, Hasenmiller, Leibsker & Moore that you spoke with gave you the clear impression that you would be settling the debt for that amount, but then documentation wires got crossed, or they meant to deceive you from the beginning. I have a really big problem with bait and switch intent, if that is what it turns out to be.
I would suggest calling and speaking with the same woman if possible, and speak to the letter referring to a payment only, and not the settlement that was agreed to. See if they will fax you a corrected letter. If you do not have a fax, you can get an efax number in a couple of minutes that will deliver faxes to your email address. I do not want you to wait for mail.
If they refuse, I believe they were deceitful to begin with. Please do me a favor and peg the date and time of when you spoke with the woman who agreed to settle the account for 1500.00. Also jot down her name, phone number and extension if you have it, as well as notes about what each of you said to one another.
I would jump on all of this today if possible.
Answering the complaint in court is much more formal than what you sent in an email or spoke about. You have to file with the court. Your answer can be as simple as denying that the amount alleged as due is inaccurate (not a stretch as the amount sued for will often not resemble the amount you last owed). You should speak to an attorney about how to do that. I know you said you cannot afford one, but try to locate a low income legal aid office that can help you file an answer in order to prevent default judgment.
But first, post an update with the outcome after speaking with Blatt, Hasenmiller, Leibsker & Moore, and let me know if you have been able to jot down the notes with dates and times of prior conversations.
I received a summons last week (3-24-15) that I was being sued by Capital One. I received this from attorneys for Capital One and here's the letter I sent them, which explains my situation. I was able to work out a settlement. They approved $1500. I want to make sure they can't come back and sue me for the rest of it and/or receive a judgment on my credit report, which I'd like to eventually repair over time. My credit report currently reads that this Capital One account has been "Charged Off". I don't have the money to hire an attorney, but I don't want to get "screwed" by them either. Here's the letter I sent them and I'll put my question to you in the box below:
"Hello,
I was delivered a Summons yesterday on March 24, 2015 regarding my Capital One balance. I do not deny this balance is mine and am very interested in reaching a settlement.
I never intended to default on my payments to Capital One. The following is a very brief synopsis of my situation;
I became very ill in January 2011. I was rushed to the emergency room at (Hospital) unable to breathe and within the hour was sent to the ICU where I was intubated and found to have the H1N1 virus and severe pneumonia in 4 of the 5 lobes of my lungs. I spent 36 days in an induced coma and was not expected to live. In fact, two women in my age group did die of this H1N1 virus in one of the (Hospitals). I received a tracheotomy, was on kidney dialysis, ventilator, feeding tube and much more. My second use of a RotoProne bed ultimately saved my life by giving me the oxygen I needed.
I then received physical therapy as my muscles had completely atrophied. I could not move, meaning I had to regain strength to do absolutely everything. To feed myself, to sit up, to walk eventually. Upon finally being released, I had a caregiver and spent all my time in a wheelchair when I wasn’t in bed.
Two months later I had so much trouble moving and breathing that I went back to the same hospital and spent 2 more weeks. It was finally determined that my heart was failing by operating at only 20% capacity. I was told the H1N1 virus left me with cardiomyopathy or congestive heart failure. In 2015 I am still under the care of cardiologist, (name of doctor) and take meds for this condition. I am also under the care of a mental health therapist for chronic depression.
Prior to these events at age 45, I was completely healthy and able to pay my bills. Unfortunately, these life changing events have altered everything.
As a result, I receive Medicaid insurance, am unemployed, I do not own a car, nor any real estate. I am not married, have no children, and stay with an older gentleman at the moment.
I would have paid this balance to Capital One if at all possible. As you can see I did make payments for as long as I could.
I would like to work out a settlement. I believe I can borrow 'some' money from family and friends to settle this debt. I am not a deadbeat, I have fallen on tough times which was not under my control, but I am willing to pay what I can.
I am unsure as to which attorney to address, so I am sending this email message to all the attorneys listed on the Summons I received on Tuesday, March 24, 2015 from Blatt, Hasenmiller, Leibsker & Moore. I am also faxing and mailing a copy as well.
I look forward to speaking with you."
Thank you so much for any light you can shed on my situation. I'm so thankful for this opportunity you have given me and others during this 'scary' time. Lisa
Do I need to get this settlement agreement in writing? What do I specifically need it to say to keep from being sued in the future for the remaining balance and/or receiving a judgment on my credit report? Anything else of importance?
Use the outline in the above article an make sure those elements are met in the settlement agreement. If you like, I can look it over for you. Post an update when you get it and lets go from there.
You are an inspiration Lisa!
I received your email with the attached letter from Blatt, Hasenmiller, Leibsker & Moore. The letter they sent in no way resembles an agreement to settle. The letter only references the 1500 dollars as a payment. It is obvious this letter is a template that they use often enough, and they should have one for agreeing to settle a debt too.
You have a time sensitive issue here, where you need to reply to the lawsuit in order to prevent default judgment. The payment date they gave of April 30th is not the right amount of time to deal with this (filing with the court to prevent default).
Before I call this what it is on first impression, can you post a reply and tell me what the conversations, letters, and emails with the firm contained as to settling this for less than the balance owed?
Hi Michael,
Thank you for your phenomenal forum here! Very educational. I received a verbal agreement to settle a debt yesterday for 60% of the original debt. Originally $5000. It was a tuition bill. They agreed to a “hardship settlement” of 3000. I am hoping to improve my credit as best as possible, so am hoping to negotiate the best credit reporting outcome. However, I do not understand all the various ways they can write this on my credit report. In my negotiating with them I believe I should understand this continuum. From best to worst for me would be as follows: removed from credit, paid in full, paid as agreed. Is this correct?
Additionally, if I get verbal confirmation and am recording the phone conversation, and cannot get written confirmation should I go through with the agreement. A credit adviser told me that these collection agencies are very resistant sometimes to sending a written confirmation. I would imagine they might be especially resistant to sending a written confirmation saying they will remove the debt from my account. Is it legal to agree to remove a debt from your account for a settlement less than the original amount? If so, why would a collection agency not agree to it?
Thank you,
Abbey
How does student loan appear on your credit reports now? When was it you last made a payment on it?
You should do what you can to get the details in writing. One way I know people have used to do that that is to tell them you are borrowing most of the money from a family member, and the only way they will give you the money – so you can pay them – is if you have a letter in hand outlining the deal, and that the payment resolves the debt.
Record the call yourself if they do not release a letter. Tell them you are recording and why.
Getting collectors to delete, or do anything other than update the collection on your credit report as resolved and a zero balance due, is not something I see in writing all that much. It can happen, and is more than likely to be something you hear verbally. It is not illegal for them to remove it per say, but it is not a common practice, as it could impair the furnisher/credit bureau relationship. Your payment is not worth that to most creditors and collectors.
Thank you very much!!!
It appears on my Equifax credit report as follows “Creditor Classification: Educational….Status D – Unpaid….Date of First Delinquency: 10/2011.” I’m not sure how to tell what the last payment on it was. I send a previous debt collection agency (in Cali) a payment of 4,000, however for some reason they did not accept it. And sent it back and said when we spoke on the phone that they never received my check, but I sent it certified mail, so I know they did. Now a company in NY has been calling me. I think the last time I paid it was in 2011, but it’s quite possible that it was later than that. Is there a way to tell from my equifax report?
Why should I tell them I am recording the call? I live in New York State, so I don’t have to (right?). What is the benefit to letting them know?
If I can’t get the debt collection agency to delete it from my report, what’s my next best option in terms of how they report it to the credit bureau? What are the words I should look for in the letter they send me (e.g. “Satisfied in full”)?
I tell people to let collectors know they are recording because I cannot know the state all site readers live in (state law governs whether you can record phone conversations without telling the other party on the line), and also because it should have no impact on getting the deal done.
There really is no “next best” option for credit reporting. You really would only expect the credit report furnisher to meet their legal obligation to report only accurate, current, and complete information. In this case, that there is a zero balance owed. All the satisfied in full, pays as agreed, settled for less stuff is window dressing when the real negative damage is that your loan went into default, credit card charged off, car got repossessed, etc. In other words, the damage is backwards looking and the fact there is a balance still owed. You can fix the balance owed part. The other stuff is really not all that meaningful.
Hi Sir Michael,
I live in florida and i received a Motion for Final Judgment by default. So I hired an attorney to settle an agreement for my Student Loan. From $24,000 that debt collector was asking from me, my attorney got it lower down for $10,000 but unfortunately it was a verbal settlement. It has been 2 weeks and we have not received the written settlement yet. I am worried why its taking a while for them to send the written agreement. What should i do?. I asked my attorney and he told me he left them a couple of voicemail already and no one has called him back yet. I just want to resolve this problem because i can’t concentrate in school anymore. Can the plaintiff changed their mind regarding the verbal agreement? Thank you so much in advance.
Sure they can. The agreement has not progressed past a conversation at this point. Continue to follow up every few days is what I would do, escalating the request to supervisors and managers in some cases.
Did you pay your attorney fees already, or are they tied to the settlement getting funded?
Yes sir, i paid him $1,500 already for a retainer fee
He should not mind taking your anxious calls about getting this closed out.
It is not unusual for things like this to not move at the pace we would like, but it is also okay to be nervous about this taking too long too.
Post an update if you have not gotten this all sealed up in the next couple weeks.
Okay Sir, will do. Thank you. Im just so worried that i can’t even sleep at night anymore
Michael,
I negotiated a $6500 deal for a credit card debt of $10,250 last Friday. I was being sued for the money. I asked they send me a settlement letter first that showed the debt was “paid in full”. The collector said they would send a letter, but that it would say “Negotiated Settlement”. Should I push for certain verbiage in the letter? Thank you!!
There is little to no benefit to negotiating for paid in full or settled/paid less in your agreements. The end result is the same. You get your credit reports updated to show there is no longer any balance owed. The credit damage from the account charging off is done once debts reach this point.
Did this account reach judgment? If not, I would be far more concerned with making sure any court action is dismissed or the lawsuit dropped as a result of my settlement. Is there anything in there about that?
Im waiting for the note tomorrow. I will update you when I get it. Thanks!
The letter included all the needed verbiage. Thanks for the advice!
Hi Micheal, my mortgage company wants me to pay off a collection from midland funding llc before the underwriting process and get a letter stating it was paid in full. I need this asap im closing in 18 days but what if they don’t send me a letter after paying the account in full?
Midland is generally pretty good about sending letters and documentation of payments and agreements. Just call Midland Funding, let them know you would like to remit full payment for the balance owed, and would like a letter that explains any agreement you make with them before hand and/or a letter that speaks to the debt being resolved after the fact.
It is normal for it to take longer than the 18 days you have for your credit reports to update as paid. But the letters and proof of payment will usually get you passed the goal line with the underwriter.
Negotiating with Law firm-debt collector out of Ga on cc debt from major cc company. Law firm agrees to settlement verbally that includes repair of credit and then never sends letter and refuses to return calls. Finally, we call major cc company to get them to intervene and law firm sends the letter but it now just says for the amount they will be “settled” and they will “dismiss” the pending law suit.
If we wanted to go for paying off entirely and get it put right with credit agencies, do we need a new settlement letter and what jeopardy does that put one in when we only have a week left on the letter in hand?
Would it be better to get it settled and then at some subsequent time go directly to the creditor and pay the difference in exchange for changed credit reporting? If so, how long would you wait before doing so, and will the cc company just continue to refer us to the law firm for further resolution? And what EXACT designation would we seek from the cc company / attorney in exchange for the full payout??
The issue is a complete lack of trust with the law firm-debt collector as they reneged on their original promise but, as you say, it wasn’t in writing yet. But isn’t is against the law for them to agree verbally on a recorded line and then subsequently refuse to put it into the letter?
Can you offer more details about what is reporting wrong on your credit reports, or what it is you are seeking from them to adjust the reporting to?
Also, who is the creditor you are dealing with?
I can better respond to your questions with that information.
its more about what they will report under “settlement” as settled versus something better, whatever that would be and what to ask for. And, how much more I’d have to pay to get that better result, like get it completely deleted, or show as just paid and eliminate the chargeoff and collection references there now. under tight time frame as lawsuit has been served and i have the offer but have to go ahead and accept. cc is discover.
do i have to pay it all to get something better than settled?
is it better to pay the settled thing now and then wait ( and how long to wait) to go back to discover and negotiate the removal vs dealing with the law firm-debt collection?
In your situation, the law firm that is working for Discover has zero influence on what Discover will show on your credit reports. And Discover is not going to change anything about charge off, 30 day late pays, etc. That goes for whether you pay less or in full, and whether you pay now, or offer the difference between the settlement amount and the remaining balance later on.
Accepting the settlement now, if it includes the dismissal language on the settlement letter, means you avoid further credit reporting damage because you will be preventing a judgment from appearing on the public record section of your credit reports.
You can expect that Discover will update the information they share with the credit bureaus so that your account shows a zero balance. Whether it got there from paying less than the balance owed, and therefore shows settled/paid less, or you paid the full amount, there is little difference to your credit reports, as the damage is from the charge off, which is going to stay on there for 7 years.
Thanks so much, been at this for awhile now and your voice is the absolute clearest on these issues. Everyone else speculates and tries to convince us that you can do better than settlement but i like your ideas regarding fixing the new credit instead…ie adding authorized user, etc.. Yes, there is dismissal language too.
I recently negotiated a 35% deal with Chase. I was at 199 days late, and about to charge off the next day, Dec. 31. I came here an read everything, then called. I beat around the bush with a flunky from Allied LLC, but they didn’t have the authority, so I told them I’d call back the next day (31st) and try again.
The next day I called, but no one was there! Being New Year’s eve, everyone at Allied was gone. Exasperated, I googled for an Alternative Chase telephone number (their main exchange always forwarded me to their henchmen, Allied LLC.) This time I got thru, and had to explain my case, and by being persistent, was moved up two levels of management. I finally spoke with someone in authority, and we quickly were able to get a settlement nailed down. Allied wasn’t going to go for less than half, or at least that was my impression, and I was prepared for that. However, by dealing directly with Chase,
I was able to drag my feet, and finally admitted I could do 30% with the help of family. She quickly replied that she couldn’t do this, but that we were close. When she came back with a number that I quickly calculated to be 35% of the outstanding, I was pleased, but told her it would take a week or more for me to get. She then offered a 4payment, 3 month installment, with a nominal amount immediately required. This satisfied me, as I didn’t need to commit a large sum before receiving my settlement letter, which came a few days later. Thank you very much for a wonderful website. If my situation was more complex, I definitely would have retained your services. Particularly helpful was/is your forum where up-to-date policies of Banks and collectors is shared and disseminated. That is what gave me the most confidence in the negotiation. Because Chase always uses Allied LLC in communicating with late customers (after about 60-90 day for me), I found this difficult. If Allied LLC is closed for a holiday, then it is possible to contact Chase directly, and get better results. Something to keep in mind, hope it helps someone.
I am really glad you were able to work all of that out with Chase at the last minute HJ, and thanks much for sharing how you resolved the account.
Dear Michael,
I live in the state of New York and had a medical procedure done in May 2012. I received an anesthesiology bill for $1750 that I thought would be covered by my insurance, and I spent lots and lots of time trying to work this out over the phone with the insurance company and the doctor’s office, but was repeatedly denied by the insurance. After many months of arguing, I started receiving correspondence from collections agencies last Summer. In September 2014, I spoke with the collections agency over the phone – I was very foolish, and regrettably had not researched enough about these situations and did not know my rights. I received threats of being sued. I was also told that they were led to believe that my insurance company had mailed me a reimbursement check for my claim that I’d never sent to the doctor’s office, and said I could be sued for insurance fraud if I didn’t work that out. I was horrified, as I’d never received a check or any indication that a claim was approved, and feared it was lost in the mail. I called my insurance company and was told that this was incorrect information and a check was never sent to me.
While on the phone with the debt collector, I unfortunately made a verbal agreement to make four payments of $437.50 every 30 days to pay my debt in full. I am very embarrassed to say that I did not request this agreement in writing before making payments (with debit and credit cards.) The only proof I have of making these payments is on my bank statements.
My father, whose insurance plan I was covered on during the time I had the medical treatment, recently spoke with an official for the insurance network through his work. It was confirmed that the doctor’s office had been sending the bills to the wrong location for the insurance company, which is why the insurance was not paying the bill in the first place. They said they’re willing to work with me to submit a new claim and cut a reimbursement check even though years have passed.
My final debt payment is due on January 14th. I spoke with the debt collector today to confirm the final due date and ask for a copy of our agreement in writing, which they, of course refused. I explained my insurance situation calmly, and reminded them that I am working with the insurance company, as I have every intention to ensure that the debt is paid, and the insurance company will likely be willing to split the check between the debtors for the amount I still owe, and to me for what I have already paid. Of course, they don’t care about this and just want me to pay and work it out with the insurance afterwards. The billing person for the doctor’s office is on vacation this week , so I have no hope of having a claim processed before my payment due date. I also requested receipts for the payments I have already made from the debt collector, and they refused as well. They claim they will put in a request for receipts, but that at this point, they say they do not have any obligation to send me a copy of our payment agreement in writing, and will not send me one until I make my final payment, at which point they will send me documentation in the mail that the debt has been settled.
Is it true that there is no obligation to send me a copy of written agreement once I have already started paying? Do I have no leverage in witholding payment until I receive a written agreement and/or receipts now that I’ve begun paying and made a verbal agreement on a recorded call? I have lot of regret for not doing further research and requesting this beforehand, but I was naive and let them scare me with the idea of being sued. My greatest fear is that they’ll never send me any proof of payments or agreement once I’ve made my payments, and I’ll never be able to get a reimbursement from the insurance company. I am unsure if the record in my bank statements will be enough.
Thank you.
It is rather amazing that one of the most complained about industries in the history of this country has generally been allowed to get away with not sending out billing statements, or been required to provide itemized accounting upon request. But debt collectors have, for the most part, been able to get away with providing little to no documentation for… it seems like ever.
There are a couple of states that have passed laws that now require some form of accounting and agreement letters. New York is one with very good new debt collector documentation laws set to take affect in a couple of months. And I believe the CFPB, who is currently fully involved in rule making for the debt collection industry, is developing a better documentation requirement for debt collectors nationally.
If it were me, I would either withhold the payment, and let this run its course now that you identified the problem, or pay it if I were highly confident I was going to be reimbursed. If the debt collector raises any objections about your withholding payment, tell them to take it up with the company that placed the account with them. If the collector is overly pushy, file a thorough collection complaint with all of the above details (and any you may have left out)with the CFPB here.
Michael,
Thank you so much for your quick and generous response. Does this mean that, at this time, the company can claim they’ll send me proof of payment after I pay all that they want, but if they never send it, there’s no way to force them to, legally, and they can get away with never sending it?
If I withhold payment while trying to get a reimbursement, can they sue me based on our recorded, verbal agreement to pay by January 14th? I’m afraid that the last payment is the only leverage I have left, though they’ve refused to speak with the company that placed the account with them about encouraging them to send the new claim to the insurance company so they can get paid.
Thank you again for your help.
Yes, it pretty much means that. Unless there is a state law that requires they send you your payment agreement in writing, and accounting of payments/charges/fees, or the requirement to send you something showing you completed all payments and the account is resolved… you are left with filing complaints at the state and federal level. You could of course sue them, but that could easily be cost prohibitive.
You filing your complaint with the CFPB will be sent along to someone at the collection agency who cares about what they receive from regulators, and not the typical debt collector dialing for dollars. I believe you will get the help you need from the complaint process, and I also know that this is the best time to send in debt collection complaints to the agency, and perhaps medical debt even more so, because of where they are at with deb collection rule making.
Thank you, Michael!
Do you believe it would be worthwhile for me to file a complaint with the CFPB with the angle of demanding receipts of payment and proof of paid debt? I am confident I can be reimbursed in full after paying in full if I have those documents. I’m concerned I have very little leverage in witholding payment at this point in the process due to the mistakes I have made.
Dear Michael,
We were finally able to get Resurgent to produce a letter that was acceptable. We submitted complaints to the BBB, South Carolina Department Consumer Protection, The Consumer Protection bureau. I also sent an email to the executive officers of the company. What we found is the collectors did not understand what a release of lien means. We were finally able to get someone who had some understanding. Resurgent did not seem to have all of the lien information found on the title in their data files. With the letter they produced my client can sue them if they do not release the lien in 90 days. Thank you for your help
Excellent! Sometimes it is those complaints that reach higher up the executive ladder that get the right eyeballs on completely resolvable issues. The CFPB complaint portal has proven particularly useful for businesses and consumers alike.
Hello Michael,
My husband and I had a mom and pop business, it was very seasonal and often times we would get behind on bills and then play catch up in the summer when the business would pick up. In the 18yrs of business our home went into foreclosure 3 times then bu summer I would get it out. Needless to say some accounts could not be caught up if I was getting home out of foreclosure that came first. We had one company that was unreasonable working with us The name was Direct Merchants,I had a master card thru them and used it often to pay bills for the business such as yellow page ads etc. about 2003 when we were behind on our $14,000 credit card payment I advised the credit card company I could send the original monthly payment but could not catch the full amount and late fees up until the other debts were taken care of. (our House) They insisted on the full payment owed rightly to them. I do not ague that fact I was behind but again advised them I could not come up with that amount and I sent them what I could equal to 3 months payments but no late fees included. They returned my check and was demanding the account be paid in full. I had to laugh….but in reality I cried… I could not even pay the original payment they had wanted to bring my account up current and now they want the full 14 grand. What rock do they think i will find this under? They had to know they were not the only ones we were behind with all they had to do was look at our credit score…It was horrible.We couldn’t go to a bank to get a loan. They began harassing me by phone to the point I would no longer answer the phone and that hurt our business. In the midst of all this my husband the only person working the business suffered a stroke. He worked 2 jobs our business and was also a paid volunteer fire fighter. We found from him having the stroke and all the tests they ran to try to figure out why a man 51 yr old would have a stroke that young that he needing a Heart valve replacement. Which we had known nothing about a heart valve problem. In 2005 some company filed a judgement pr lien in another name other than direct merchant. I had no idea who they were butt my attitude was pick a number. You aren’t the only one wanting money. We still received calls some how they had found out my cell number and were now calling that number also. any Message left did not say who they were calling for like Direct Merchants only they were a debt collector and it as important they talk to me. I had 4 or 5 of these messages a day. And half the time the full number was not even left. They would start talking before the recording started or recording stopped before they left the full number. I also received mailings and I will be honest I lost track of everyone we were behind so much of the time. I was put on anti-depressants. It did not help I could not answer my phones. We shut down our business and were fortunate enough to be hired on with a local hospital. We now got our house payment caught up and kept in good standing for 6 yrs. We needed to do some major home improvements both decks are falling apart. and I had fallen thru the back deck. So I decided to check into a refinance and borrow on our equity to replace the decks, upgrade our heating to gas, install new carpets for the carpets are over 25 yrs old and possibly pave our driveway. Nothing foolish. Well all was going fantastic we were getting a loan the interest rate was a locked in one at 2.5 and we were paying 10.75 on a variable loan on our house because it had been in foreclosure so we were ecstatic. Our credit report was almost squeaky clean no mention of judgments which I had totally forgotten about and then when it came to the things that would be paid off at closing it had an amount of 64,000.00 we were borrowing 50 grand for the remodel but no mention of that and when I asked the lender what the 64 grand was for he said it was for a Bennett Law Firm that had a Lien on the title. I had no idea who the heck this was but the brakes were put on till I could find out. I also received a letter from Bennett law about this same time so there must be something that tells them when a client they have a lien on is trying to get a loan. I sent a requesting letter to the law firm on what this acct was for. I was not aware of owing anyone this much money and found out that they represented Galaxy Portfolio who represented someone else that represented Direct Merchants Bank. The original bill for 14 grand. I obtained a lawyer that cost over 13 grand and I am still paying on the account and he was only able to negotiate the fee down to $40,045.90. We then went back to the finance company and started the refinance over we paid the 3 liens (2 small ones and Bennett Law Firms) that were on our home and we were not able to borrow money to do any repairs in our home. My back deck is literally condemned. Once we pay the lawyer off we will work on saving to repair the back deck.
My question to you is how can a company charge that amount with out sending some kind of a monthly statement advising me how how the interest was getting. We had not received any mail on the accts for years. and why would it not show up on our credit reports even the credit report the lender had on us shows nothing of the liens. We were even ale to get an auto loan in 2012 and nothing was mentioned at that time. I do not understand how a 14 thousand dollar bill can turn into over 70 thousand which was the last statement my lawyer received urging us to accept the offer to pay the 40 some grnad. No one earned that amount of money trying to collect it. I was thinking more in the range of 20 grand then when I looked into other things I found that Bennett Law had been taken to court and had to pay back money to residences in Virginia. Not sure why but my question is do I have anything to stand on to dispute this fee they charged. What type of action can I take if any. Again I never disputed owing the original amount. My dispute is never being advised monthly of the increasing amount and that it had not shown on our credit report. If it had we could have done something much sooner instead of it getting so out of hand.
Respectfully Linda
Thank you for sharing your story Linda. I do have some feedback and suggestions to offer you, but first, what state are you in?
Mr Michael Bovee,
I reside in the state of Washington
I want you to contact the attorney in Spokane I am sending you an email about. It does not matter if you are on the other side of the mountains. Kirk handles cases across Washington. He offers no cost initial consults. Run your entire scenario by him. Ask him what your legitimate options are to pursue anything this far down the line.
11/7/2014 we got a copy of a settlement letter with the wrong address and some other persons name on the letter. I sent a copy of the letter, copy of email correspondence and a copy of a phone call made of the lien holder’s representative to the president of the company. I cc the representative. In the conversation the representative admits that they have been paid, but cannot give a time when the lien letter will be sent. The company corrected the settlement letter but still will not issue a release of lien. We are going to file a complaint with the BBB and the Department of Consumer Affairs. Can you suggest any other action.
You can file complaints against Resurgent Mortgage with the BBB and the CFPB as well. But I have to think there is an existing reasonableness standard for follow through filings of this nature in your state.
Have you talked this scenario over with a long standing title agent? Perhaps they have seen a reasonableness standard that would apply to your issue.
No, the letter was sent out 11/4/2014, They received payment 10/28/2014, they acknowledged the payment 10/30/2014
I would give that settlement letter a chance to show up by next week before I do anything more.
Dear Michael,
I am a real estate agent that is working with a client to sell their house. During the title search phase of the sale a lien was found on the house. The lien holder was contacted and after a very difficult negotiation an amount was reached. My client wired the money to the lien holder Resurgent Mortgage, but did not get a settlement letter before the money was sent. I have spoken to a person, the supervisor, at Resurgent Mortgage and they said the account has been paid in full, but they have to mail us a copy of the settlement letter.
We asked them to fax a copy of the settlement letter. They said any other letter would have to be approved by their legal department. They said that this was in the works and that it would be sent several days ago. When my client called to see if there legal department had sent their approved letter the supervisor said that they have sent the settlement letter as certified mail.
The people at this company have lied so much that we do not know what to do. Do you have any suggestions?
Has it been more than 7 days since they said they sent the letter?
Hi Michael,
First of all – great website. I have learned a lot from just reading the posts. My question is about a judgment. I have a judgment from 2009. The original creditor was Washington Mutual but Arrow Financial Systems LLC is the one who sued me and got a judgment for 3871.38 before fees, interest, etc. I had no money and no job so the multiple times they tried to enforce the judgment was in vain. I guess they just gave up. In June 2011 apparently the debt was sold to Jefferson Capital Systems. I never received anything regarding this sale just started receiving letters from another collection agency stating they were collecting for Jefferson Capital Systems LLC. The last letter I received from the attorney that handled the lawsuit and judgment stated I owed $6947.86 as of January 5 2011. Most recently I have been receiving letters from Mercantile Adjustment Bureau trying to collect the debt. They are showing I owe the original amount of $3871.36 and offer a 50% settlement of $1935.69. I would like to counter offer 30% and will go up to 40%. My issue is since the debt has been sold and no longer owned by the original creditor, I am unsure that Jefferson Capital LLC or Mercantile Adjustment Bureau are aware that this is a judgment. My feeling is that it was purchased as a part of a large portfolio of debt. How do I go about getting a satisfaction of judgment without waking the dog so to speak?
They will be aware that your account is a judgment. You can settle judgments, and the older and longer without any payment, the better, as is the case here. But be ready for 50% if need be, while negotiating for your target amounts.
Demand the satisfaction filing with the court as part of your agreement, and get that written in.
In the end, as long as you have documentation of the agreements and payments, you can also file with the court, and even a complaint with the bar about someones half ass law practice not updating the court appropriately as an officer of said court. I am not trying to make any of that sound complicated, because it isn’t, and you can get local legal help.
Michael,
Thanks for the help. I think I will offer 30% first and see if they bite. I will let you know what happens.
Hello, it looks like you guys are very helpful with this stuff, I’m hoping you can help me too. I’m trying to have a debt settled with an account I had cosigned on with dish network. They set a debt of 186 to Rpm collections. I have been working with dish, and they assure me that if I pay the debt I will receive a ‘zero balance letter’ via email. I feel like putting this at a zero balance doesn’t necessarily mean it will be removed from my credit report. They refuse to send me any letter stating that they will remove it from my credit report, which is really all I want. Do you have any advice on what I can do here?
Creditors and debt collectors that are reporting valid and completely correct information on your credit reports are not obligated to delete that from your credit reports in return for payment or settlement. It is not common that any will.
Dish Network would have to report the account as paid, because that is accurate information once you follow through with that. But its not like they are doing you any favors by updating the credit reports with the truth. They are obligated to do it.
You could hold your ground with demanding the credit report deletion, but you may be standing there a while.
You could pay, wait to see what they update the account with, and send a good will letter requesting they cease reporting.
You could make sure Dish shows up as paid on your credit, and not sweat it much from there.
If Dish is the only negative on your report, amongst many positive and pays on time entries, it will not be much of a smudge after little while, and some scoring models now no longer factor paid collection in the score.
I am writing on behalf of my daughter, who received a phone call from Regional Acquistion out of New York yesterday afternoon. After using all the normal threats these types of representatives are trained to use, my daughter, who has never encountered the likes and scared beyond reason of “losing everything’, gave her debit card information to settle a $1900 Best Buy credit card account for $768. I am very proud of my daughter, who is in recovery; clean 2.5 years, and is now in school full-time and working part-time. However, she can not afford to pay a lump-sum of $768, but was scared and too naive to know she had options. My concern is to the legitmacy of Regional Acquistion. Are you familiar with this company, who claimed to be hired by Best Buy to collect a charged off account? Does my daughter have any recourse, or furthermore protection, since she did not have a settlement letter in hand prior to paying the settlement amount over the phone? Can she now sign an affadavit with her bank to dispute the charge, so that she can work out a payment plan? By the way, she was told by the Regional Acquistion rep that a payment plan could not be worked out at this point due to the amount of time the account was in default and that court papers were to be filed within 24 hours, followed immediately by a judgement to freeze her assets. I cannot stand that this company took advantage of a naive young woman, who used part of a student loan to pay off this debt and placed herself in a financial situation she has fought hard to overcome, not to mention the threat to her recovery because i huge part of it is making it on her own. I’m just sick over it all. Please help her and know any advice you can offer will be greatly appreciated.
An additional note, my daughter did receive a confirmation number and case number and was told she would be receiving something stating the account had been paid in full by mail.
Which does not change my take on the situation.
I would do whatever is necessary to stop that payment. Debt collectors that threaten lawsuits and asset freezes inside of 24 hours are liars a scams, or extremely poorly trained.
See what she can do to get the payment backed out. If she runs into trouble, post an update.
Have her look on her credit report to see what is showing for that old Best Buy account, and any collection agencies reporting it now. Post those details and I can help her identify some options from there.
hello micheal
They want settlement payment as of thursday.Does that mean that the remaining balance will reported as income with a 1099c
For this calendar year, yes, it would typically mean that. I cover the tax implications of settling debt more thoroughly here: https://consumerrecoverynetwork.com/debt-forgiveness-taxes-settled-credit-card/
Micheal Bovee
First American Acceptance Co
Law Office Hayt,Hayt & Landau,LLC
My husband requesed that the letter stae be satisfied paid in full,and we thought we receive a letter worded a different way.we just want to know how that is going to be reported to the IRS. we dont know if the firat american acceptance co. is a debtit buyer because it was a wachovia /wellsfargo credit card
First American Acceptance CO is a debt buyer.
Paid in full compared to full satisfaction is roughly the same thing. It protects you from someone later saying there is still a portion that is collectable.
Creditors and debt owners should be notifying the IRS about any forgiven debt that exceeds 600 hundred dollars. But I know they do not always do that, and certainly the following January after the settlement is paid.
Hello Micheal Bovee.
We received a settlement letter this morning by fax.In the letter it states that ,this will confirm that we will ACCEPT $XXXXXX IN FUL SATISFACTION OF YOUR OBLIGATION ON THIS ACCOUNT,PROVIDED THAT PAYMENT IS RECEIVED IN THIS OFFICE BY THE DATE SHOWN ABOVE. FOLLOWING OUR RECEIPT OF THE SETTLEMENT FUNDS AS PROVIDED HEREIN,WE WILL ISSUE ANY AND ALL REQUISTE CLOSING DOCUMENTS.
I appologise for the caps,didnt realze it was locked.But i need your advise on this matter asap.if this letter is good or not wored as we had requested last friday
The wording you shared is fairly standard. What is the name of the debt collector you are settling with?
What is it you meant in your comment about requesting last Friday?
I recently (and unsuccessfully) tried to settle a debt with Midland Credit Management (MCM). This company had already sued and successfully garnished my wages for another account (these are the only collection accounts I’ve had). This garnishment will end with my next paycheck.
I have repeatedly written the company, requesting debt validation, with no response. In August I sent them a letter via certified/registered mail, agreeing to pay the settlement account (offered by them), if they agreed to remove all information around the debt from my credit report (essentially a pay-for-delete). They refused.
I crossed my fingers and sent them another letter, this time including a money order for the requested settlement amount, stating the following:
“Upon receipt of this correspondence and payment, please verify in writing that this debt has been reported to the major credit bureaus as “disputed” by myself, the consumer. In addition, please return a copy of the enclosed Agreement to Compromise Debt, signed by an authorized agent of your company.”
Yesterday I received a letter, with my returned check, stating “please be advised that MCM does not accept the conditions set forth in your recent correspondence, therefore I am returning your cashier’s check.”
I am concerned about a few things. The first being that they will just sue me again. I am also concerned that they will come after me for more money after I’ve paid the agreed-upon amount. In the settlement offer they sent, it says on the one hand that upon receiving payment, they will consider the account paid, then they state that the account may still be reported as unpaid on my credit report.
I am trying to resolve this last debt and start to rebuild my credit, and I don’t want to fall into limbo with this company. I am not sure what my next steps should be.
You are making unrealistic conditions on settling with Midland Credit. Why have you gone about your efforts the way that you have? Was it something you read about?
Midland Credit Management will update your credit report with any new information after you meet the agreement. It can take 30 days, and I recommend waiting 60 days to check your credit reports. If they do not follow through, you dispute it with your proof. But they are generally pretty good about it.
Midland will not try to get you to pay more or sell off the unpaid portion to another debt collector.
1. Midland Credit Management is a debt collector under the same umbrella of companies like debt buyer Midland Funding, and their parent Encore Capital Group. They, and companies like them, are currently under the highest amount of regulatory scrutiny they ever have been.
2. Midland is not generally a reseller of debt.
If something were to happen with your file after the settlement, it would either be a mistake, and easily fixed, or the result of something weird happening to your file because of these validations and accord and satisfaction, or restricted endorsements you have tried.
Hi Michael, I have an 8 year old title loan debt and I recently called the title loan company to ask for a settlement offer. The clerk looked up my account and said she would discuss it with her supervisor and call me back. She called back and said her supervisor said she would agree to a $500 settlement to give me my title back (I was told my original $500 loan was now $1900 with interest). I agreed and asked if I could get that mailed to me in writing as I’m living in another state and can not walk in to trade the $500 for my title. The clerk told me No, she doesn’t know anything about sending letters in writing and they don’t have any form like that. She would only give me her supervisor’s first name and no number because she said it was her job to settle with me after her supervisor made the offer. My question is what should I do now? I want my title back and I know I’m dealing with a shady company!
What is the name of the title loan company?
What state are they in, and what state are you in now?
The date of the first check is the 20th of this month. I last paid the original in July. Should I stop payment on checks? I have nothing on paper from them about this agreement. I have no lump sum to pull together. They won’t tell me how much I’m going to pay all together I spoke to them only after they called me almost hourly during work. Its really concerning.thanks.
Also it’s Allied Interstate Inc.
Saw this post after the one I just replied with. I will have better feedback once I know the answers to the other questions.
Hi Michael,
I have an outstanding $1,500.00 balance at a large retail store. A third party collection agency contacted me by mail and phone. I agreed to make 6 pre-dated check payments that would cover about $500.00. I feel so stupid. They now have my checking account number. I asked how much my payments will be after the six months and they said they couldn’t tell me. They didn’t know. I know it’s a real collection agency but I’m freaking out that I will have to pay outrageous fees and waaaay more than I owe. What should I do? Any advice would be very much appreciated.
How long has it been since your original creditor payments stopped?
What is the name of the collection agency?
How much could you pull together quickly in order to settle for less than what you owe, as opposed to making monthly payments?
What is the date for the first payment to be drafted from your bank?
Hi Michael,
I have been searching online looking for an answer regarding credit card debts and debt collector since hiring a lawyer is very impossible for me to get with the high cost of consultation fees. Anyway I hope you can help me with my problem. I have 3 accounts with MCM and I asked them validate the debt which they did. Knowing that the cost of the 3 accounts will total almost $2,500 and I can’t afford to make a full payment so I sent them a settlement letter that I can only afford to pay a certain amount on those account. Its been awhile but I havent recieve any reply from them. What should I do?
Please help and Im looking forward to hear from you
Thank you
MJ
How much are you offering Midland Credit Management in your settlement letter?
My only question now that I have settled with CareCredit (yuk lol) is how does a settlement affect my credit score? And let me just say this was a hassle I literally had to stop making payments and let it almost get charged off before they were willing to do anything. The lady told me that I inquired about settlement a few times and because I was in good standing they couldn’t do anything but I know my income and expenses were changing and didn’t want delinquent on my account but I had to take the hit just to get them to work with me. I mean when I paid early it never counted towards the future payment which I thought it did so that was one problem. I always got hit with a late fee even if I was a day late. I got my account caught up through tax season but then was told I had to make another payment within weeks. But anyway all has been resolved and just waiting on the letter to come to me. Which they tried to say will take 72 hours but I stated that because they wanted to money and needed the money before the 200 day charge off then I would assume that they would send the letter to me before then as well. The specialist was very helpful and went and asked the lady if she could get it out today. But the customer service people at Carecredit are horrible I was literally on hold for 20.03 seconds until I put them on hold and called back. Word of advice to anyone STAY AWAY FROM CARE CREDIT!!!! if you need medical procedure just work it out with the physician office.
Is the Care Credit account you are settling the only collection, or negative item on your credit reports?
How many other open and positive accounts do you have reporting today?
What are your credit scores as of today (without the settlement having updated to them yet)?
Hi Michael,
My name is Brittany. I have two medical bills that went into collections 11/2013. I just found out about them when I checked my credit about 6 months ago. I have been going back and forth with the debt collector CAC Financial. I finally got them to tell me who the original creditor was so that I could get the name of the doctor’s. I was trying to see if the doctor’s would refile the claims to my new insurance (medicaid). The debt collectors did send me a letter 8/29/14 saying I owed the debt and to respond within 30 days. I sent a letter 9/11/2014 after speaking with a representative who said I needed to pay the whole debt by 9/22/2014 in order to get the accounts deleted from my credit reports. I wanted it in writing so I sent them a letter saying that I would pay based upon the conversation with the representative along with a written letter from them stating the agreement. I just received a letter on Saturday (past the 22nd) saying I am disputing the debt and that they will notify the credit bureau that I am doing so. I called the representative again and at first she said there was no record of the conversation agreement and that they do not send out written agreements. Then she said there was a note saying they would delete in by the 22nd but the 22nd had past. I told her Ii didn’t pay it because I was waiting on their written agreement to me. I am not sure how to continue. I want to pay the debt, but I want to actually have proof that I am paying it and proof that they are agreeing to what they say. How should I proceed? These are medical bills. I am still trying to see if Ii can get the doctor’s to refile the claims in the meantime, but if that doesn’t work I would like to know your advice. I am in the state of Florida.
Also does it hurt people’s credit to have accounts in collections for a long time? Or does time not matter?
First: the provider cannot file Medicaid retro-actively. If you did not have Medicaid at the time of the claim then that care is not covered. The second reason they cannot file is because even if you did have Medicaid there is a time limit to file the claim and once that expires the government won’t pay. That time limit is 180 days so you missed it by several months.
The older the debt the less it hurts on your credit reports. If the provider or the collection agency will not send a written agreement that does not prevent you from drawing up your own. You simply include all the terms such as they agree to delete the trade lines from all 3 credit reports within 14 business days of being paid and you agree to pay via money order within 14 business days of receiving their signed settlement agreement back. You enclose 2 signed copies of it and ask that they return one.
Keep in mind you cannot force a provider to do PFD. Some will not no matter what. If you choose not to pay them without PFD the debt will remain on your credit reports until 2020 and it is possible that they could still sue you as most statute of limitations on this kind of debt is at least 4 years.
please help a debt recovery agency has contacted me about a settlement and I told them what I could afford and so on they said they would phone back which they did and told me that it had been agreed and now they have phoned me stating that they made a mistake and in fact it was not agreed it had been rejected is there anything I can do about this ?? if they made the mistake shorly they hav to honer the agreement ??
Who is the collection agency? Who are they collecting for? How long ago was it that you last paid on the debt? What state are you in? What was the amount you offered as settlement, and what is the total amount they say you owe?
Those answers will help me to better answer what to consider next.
Michael,
I am about to close on refinancing my house and discovered a lien on it via a debt collection company that represents Capital One. I called and negotiated a settlement of $6,588.00, but never told them I was refinancing. They sent me a settlement offer letter via fax, with terms and agreement with the stated amount. However, today they’ve stated that the letter is null and void because they can see where the title company has done a search and they now want the full amount of $10,000. My question to you is: is the settlement letter a legal and binding document? If I make the payment before the due date that we agreed on, do they have to honor it? I have a strong feeling that it is, because during the conversation this morning with the collector, when I stated that this is a binding document and he legally has to take the money that we initially agreed upon, he got extremely quiet for about ten seconds and hung the phone up. Can you give me quick advice, since I’ll need to make payment by Friday. Thanks!
This type of thing would have to ultimately be decided by the court. And if there are similar cases that have been decided in your state already, you could use the outcome of those prior scenarios to help you make this decision.
What state are you in?
I’m in Louisiana and would think that the settle offer is a binding agreement.
I would want to run this by an attorney of your own, with what you have pending.
I sent you an email with three different attorneys who know collections and settlements in Louisiana front to back. Call one of them and ask for some feedback.
Michael,
Thanks for your help with my issue. I walked into their office on Friday, which was Couch, Colville, & Britt, LLC. I had the settlement letter in hand, along with a cerified check, which stated $6,588.00 on a $10,116.64 balance. They tried to argue with me on that the settlement offer was void and that I owed the total amount, since I didn’t relate to them that I was refinancing my house. It was obvious they wanted more money once they knew I was refinancing. However, when I mentioned I would contact the licensing board, along with Consumer Protection, they immediately took the check and released the lien on my house. I’m sure my settlement letter would have stood up in any court. I now have a settlement in full letter, along with a satisfaction of judgement letter. I close on my loan tomorrow. Thanks!
Congratulation Alvin!
Dear Michael,
Thank you very much for your incredibly informative website, and for all the help you give to consumers. I live in Virginia and had a Judgment of $20,200 entered in a hearing which I attended/contested on July 24, 2014. I subsequently filed a timely appeal in the General District Court in order to buy time to continue to pursue my credit identity theft/credit fraud concerns. The credit card was through Bank of America (BoA), and the last payment of $500 was made in August 2012 (after spending hours on your site learning I realize that I shouldn’t have made this payment in response to letters/calls from BoA). BoA/FIA Card Serivices charged off the account one month later on September 29, 2014. Portfolio Recovery Associates (PRA) now has the debt and brought the suit through the Virginia Law Firm of Glasser & Glasser. In preparing to defend my claim under the Fair Credit Reporting Act (FCRA), I contacted BoA directly and asked them for the original signed credit application from March 2004 and for the monthly statements, so I would be able to see where all the charges came from. BoA responded by sending a copy of the online application made with my personal information (i.e. SSN, DOB, my Mother’s Maiden Name etc…) but with no signature to prove that I applied for the card. In a separate form letter from BoA, also including the disclaimer that this was “the best documentation possible” BoA enclosed copies of the monthly statements from November 2011 forward, but none from 2004-2011. So I called BoA again, got referred to the Fraud Unit, and again asked for copies of the monthly statements from 2004-2011 generally, but more specifically, for any statement that contained Balance Transfers (BT) onto the card, since I never made a balance transfer onto this card, or onto any other credit card. I learned of the BTs when I reviewed line-by-line the copies of the post-2011 statements BoA sent. However, by 2011, the BT(s) were already made, and I need to know:
1) Is it my right under the FCRA to have copies of ALL the statements, especially those that show a BT since more than half of the judgment stems from one or more BTs?
2) Do I have a right (under FCRA) to demand that any further collection efforts under the Judgment be stalled until BoA provides the relevant documentation (statements from 2004-2011). When I made this request in the General District Court, the Judge said that “he didn’t have a copy of the FCRA on his bench – and asked me if I had one with me?” I didn’t have a copy with me, since I read it on the FTC’s Identity Theft website when I filed an Identity Theft Affadavit. So the Judge and then ruled in favor of PRA.
Thank you so much for any information or assistance you can provide.
Your questions are best answered by an experienced debt collections defense consumer law attorney in your state. Post the name of a nearby city and I will email you contact information to any I know of that are closest.
I am not aware of anything that entitles you to all of your credit card statements from the beginning of your account. If something like that can be pushed for in your case, it would most likely not pertain to a right found in the Fair Credit Reporting Act.
You will want to talk with that attorney about your options to stall any collections, or to address the judgment that appears to have been entered against you. There are options, and some are limited by time, so do not waste any consulting with an experienced attorney of your own.
Dear Michael,
Thank you for your response–I live in Vienna, Virginia right outside Washington DC. I look forward to hearing the names of experienced debt collections defense consumer law attorneys in my area.
You may be interested to learn that when I filed a fraud alert with the 3 Credit Bureaus, their acknowledgment letters stated that, under the FCRA, “You have the right to obtain documents relating to the fraudulent transactions made or accounts opened using your personal information. A creditor or other business must give you copied of applications and other business records relating to transactions and accounts that resulted from the theft of your identity, if you ask for them in writing. ” Having read this information from Experian, I asserted my right with BoA, and informed the General District Court Judge of BoA’s failure to provide me with this information.
Thank you again for your continuing assistance.
I sent you an email with contact details to 4 experienced consumer collection law attorneys in your area. All of them are likely to offer a no cost initial consultation.
Please do post updates with how you progress.
Hi there..Michael..great work and thanks for the support – nothing beats its.
We did all our settlements via phone with a lawyer ‘supposedly assisting us’. However, this lawyer did nothing to get any documentation. We may ‘owe’ $$ depending on the pre-negotiating agreement of the legal fees, but in return – we got nothing..not a letter, not a write off amount paid in full. Bottom-line, nothing. Everything – all about, everything, 6 credit cards have been paid off in full without any documentation as you suggest and highly recommend. Also, I even had to play a role and settle some of one of my accounts because the lawyer or his assistant was not taking a role in negotiation. Any suggestions? thanks much, Faith
Have you looked at your credit reports to see if the accounts that were settled are showing that fact? Are you see debt collectors reporting with balances still owed that you know are not?
Was the debt settlement attorney service you signed on with part of a nationwide sales and servicing effort, or was this a local attorney you worked with? If part of a national service, sometimes the settlement work is done by non attorneys in offices not related to the attorney directly. The documentation may be stored in a CMS that you can get your hands on still.
Post about what you find on your credit reports for the settled accounts in question and lets go from there.
Hi Michael,
I live in Texas and have a charged off account that is now with Cache and is represented by Joe Pezzuto Attorney. I sent them a letter asking for a verification letter and one year later they finally sent it to me. From my past experience, I asked if I could have the settlement in writing, but they refused. They said that I will get a letter once I pay it off. That’s one of the main reason why I requested a verification of my account because this agency was giving me a red flag. What other measures can I take? Have you heard any “success” story from this agency?
There are many success stories settling with the Joe Pezzuto law firm.
If they will not send the letter outlining what you negotiated, and they agreed to, call them back and record it. Start the call by telling them you are recording and why. Go over all the pertinent details of the agreement. Save the recording along with the written agreement they later send to you.
Once you are done, and get the letter from them in the mail, post an update here.
What happens if they use the scare tactic? If I call, would I now be under radar and I’m afraid they won’t take my settlement offer and will make me pay for the full amount (which I can’t afford right now). What would happen next?
I read your first comment to mean you spoke with a collector at Pezzuto’s office recently. Did you speak to a debt collector at that office prior to sending your debt validation letter? Was that conversation what causes concern with calling now, or was it a conversation with a different debt collector (not that most of them are not abrupt and a bit pushy)?
What is the amount of the debt now?
When was it you last made a payment on this account?
So basically, i have had 4 charge off accounts. The three of the agencies that I have worked with were particularly nice and never had a problem. Now, with the Joe Pezzuto’s office I was expecting the same thing. I wanted to make monthly payments, but they were so rude to me. They said they don’t do monthly payments and that it was an attorney’s office. I was so shocked and didn’t know what to do so I told them I would call back. So the same lady I talked to said she can lower the settlement, but it was for that day only. I told her I would call her back because I was still new at this. This happen probably around last November of 2013. I wanted to pay for it, but then I asked if I could have it it writing and she said no and that I can only receive it once I paid the debt. Then I thought that was odd because the other agencies were very nice about sending me agreements and I didn’t think it was a problem to ask. Therefore, I didn’t like the way the agency was handling things so I mailed them a letter saying I wanted my debt to be validated and then I just received it yesterday. I admit I am afraid to call them. They are the epitome of what you would think of as a collecting agency. My debt with them is currently around $1600 (give or take). And my last payment to this account with the original lender was in 3/2012. Since the call of November 2013…I haven’t talked to them. I just wanted to ask you for advice so I can prepare myself when I do make the call (which will probably be in a couple of days).
Okay, thanks for the back story.
I would suggest having at least 50% of the balance at the ready before you call to negotiate. You may end up a bit higher if your credit reports are updated to show all of the other collections are now paid, or if you look more collectable for other reasons.
You will go about negotiating the same way you did the other accounts. You now know you may need thicker skin to negotiated with Joe Pezzuto’s collection crew. They are going to try to collect the most, but you will want to wear them down with comments like “I cannot possibly afford that”, or “a payment plan when I live pay check to pay check is not something I can commit to”.
You do not have to get the deal done in one phone call. It is okay to hang up with the debt collector, letting them know you will make a few calls and see if you can pull together some additional money, or something like that.
When it comes time to tell them you need something in writing – if they are just not going to release the letter – let them know you are going to record the important details of what you are agreeing to, and then record.
Please do post an update as you make progress. I may be able to offer some additional feedback along the way. I especially want to know about the difficulty in getting documentation.
One more thing….I’m afraid on top of them not sending me the letter and that they will make me pay right on the spot with a debit card. Is this a normal procedure? I’m just remembering from my last encounter with these people and she said that I had to pay that day or else she is taking the offer off the table. I just want to have like a proof of a check or cashier’s check being sent to them. I guess my bank statement can also be proof as well?
Abby – You would benefit from some coaching to complete your settlements. Call in and consult with a specialist about that at 800-939-8357. The consult is free, and the coaching is very affordable if you want one on one support.
Let me know what you decide to do after that, and I can continue to offer feedback here in the comments.
sorry I did not post this as a reply, I messed up, and don’t know how to fix it
I removed your prior post.
Michael,
Thanks for your help with theinformation you provide. I live in Tn, where I was sued on behalf of MBNA over a credit card debt. The judgement and lien filed against is 19k. I have heard nothing for 7 years, since judgement filed in 2007. Last week I began to recieve mail that a new law firm took over case, and among others I recieved a list in interrogatories from lawyer repping Sacor Financial. I called Sacor, and made a offer of $3500 to settle acct. BTW, my only income is SSI Disability, and disabilty income from a private insurance policy I had thru my employer. I permanently disabled in a 2002 auto accident, which is what started my financial problems. I also have heart disease, and had open heart surgery last year, and now have a aortic aneurysm, pending surgery. Im 46 y/o male. Anyway, sorry, when I made the offer, the man at Sacor, said he would have to submit a hardship letter, and he would need my SSID award letter, AND a most recent bank statement. This judgement is against me alone, and my bank account is joint with wife, and she says NO WAY to bank statements. I agree. The Sacor rep asked where the 3500 was coming from, I explained that my mother was lending a large portion of it, which is true. I think this is why he asked for statements. If I tell him NO to the bank statement, I fear the talks will tank. SACOR claims with interest and penalties, my orig. 19k judgment is now over 30k. I HAVE NEVER, heard from anyone in reference to this debt since 2007, when prior to the judgement, I tried very hard to work a settlement with them. I actually offered 9k, 50% payment in one sum, back then, and was told no. We have no other income, other than my disabilty, and other than my home, have no assets, other than a 1500 dollar old truck, and our furniture. The bank accounts he wants statements to have way too much personal info, as I pay everything with that acct. Sorry for the long post. Thank you again.
If you are uncollectable you have time on your side. The home you own may be what they are thinking they will get paid from at some point, as Tennessee does not have great exemptions there. How much do you owe on the home if any? Is there a judgment lien filed with the county? What would you estimate your equity position to be?
Tennessee has a combined 10k judgment creditor exemption that can wrap the value of a car, household goods, and a bank account together. I am with you regarding not sharing bank statements. If for some reason that is something you decide to do in order to clear settlement hurdle, think about how they would look at your statements and the wild card judgment creditor exemptions before you do.
Settlements at the rate you are asking for are rare, and the judgment in place would make success rarer still. That said, when I do see that much of a reduction negotiated, it is with long term fixed income and health situations. Who was the named plaintiff and attorney collection firm originally? Who is the collection attorney firm now?
“That is precisely the process I encourage most for making payments on settlements – using a special account set up just for this purpose. Keep copies of settlement agreements and print out payment proofs in anticipation of needing them, and keep them in a safe place.”.
Question: what happens if a debt settlement lawyer on your behalf doesn’t do what your recommendations are: (i.e. letters of settlement, agreed payment, etc.)? Thanks so much for your continued support
Michael,
I have a Credit Card that was charged off nearly 5 years ago. This Visa account was picked up by a 3rd party collection agency who sent me a thorough debt validation letter about 8 months ago. The account now after interest is around 6,500 dollars and the collector told me the original creditor would not accept anything less than the original 3,600 in principal. Unfortunately I made payments for about 6 months around 2 years ago which probably reset the statue of limitations. Would this be a good settlement if I could get a deal in writing? Your suggestions are appreciated.
Post the name of the original creditor and debt collector you are dealing with and I would be better able to reply with a different target to aim for in negotiating the debt.
Generally speaking, a good settlement is one you can afford. No sense leaving money on the table though.
The OC is Eastman Credit Union and the 3rd party collector is CU Recovery. The card was opened in TN and I currently live in MI. They seem pretty reputable for a CA but the only thing I question is that this account has been handled by CU for years and don’t OC’s usually take accounts back after a few months of unsuccessful attempts?
That is a pretty good offer from a credit union. I typically target 50% negotiated settlements with smaller local and regional credit unions like yours. The bigger ones can go lower on some accounts, some of the time. It is not impossible to get lower deals, but they are fewer and further between these days, compared to policies just a couple years ago.
Large national credit card issuers tend to do contingency collections with an agency every 3 to 6 months, like you refer to. Credit unions do not have the volume to churn, and may use assignment collections with more longevity built in to the relationships.
Thank you Michael. Also after I receive a debt settlement letter would a debit card be a safe method of payment provided I open a separate checking account specifically for collections? It seems like I would be able to print and save proper documentation of the transaction from the banks website.
That is precisely the process I encourage most for making payments on settlements – using a special account set up just for this purpose. Keep copies of settlement agreements and print out payment proofs in anticipation of needing them, and keep them in a safe place.
Michael,
I received an Agreement to Compromise Debt letter from a collection agency relative to a few old medical bills totaling $6K. All of the bullet points mentioned in your piece are contained in the letter notably “full and complete payment for all outstanding charges”. My concern is this agreement can still be used to lower my credit rating so is there any benefit in settling? Although the Agency claims, once paid in full, they will communicate with the credit bureaus and have any references removed. Please note that the debt is considered time-barred so they they have no legal recourse in collecting it.
How old is the debt? Look on your credit reports for the date the collections are scheduled to drop from your credit.
It is not common to get a written agreement to delete collections from credit reports. If they do not follow through, but you do, you have different actions you can take.