My Security Clearance is Being Held Up by a Capital One Collection Account with Northland Group Inc
I am trying to get a security clearance at work and my credit report revealed Capital One is in a collection. I contacted Capital One and they longer have my account and state they can't or have no record where it went. Further research revealed Northland Group Inc. has it. I sent several request for validation letters they just keep on sending me settlement offers. This is not scheduled to come off my report until June 2018. I need to show I am taking responsibility for my debt to get this security clearance.
What is my best course of action with Northland Group Inc?
It is a bit strange that Capital One cannot tell you where your account went. I suspect this was an old HSBC account that Capital One acquired when they bought HSBC credit card portfolio. If you are certain it was a Capital One account from the beginning, having it be placed with Northland Group is a bit odd. Northland Group is a subsidiary of Resurgent Capital Management, a debt buyer. Capital One has not been very active in selling off unpaid debt to debt buyers for several years. If you recognize the account as your own, how long ago was it you last made a payment? Were you given a time limit to resolve this for your security clearance to go through?
Resolving debt in order to meet security clearance requirements.
There are a couple of ways to approach this if you are in a hurry. Sending off debt validation requests to Northland Inc is not one of them. If you know the account is yours and you need/want to settle it, your debt validation request will typically trigger certain behavior from a collection agency or debt buyer. Most collection outfits treat validation requests with the seriousness they should, as it triggers legal obligations on their part. If they cannot obtain what they need to validate the debt, they may push your account into a stack of debts to resell, or they may have it pending internal legal review. Both of which will often delay you from reaching your goal of getting a settlement or payment documented, your credit report updated, and the security clearance to go through.
Sending off debt validation makes sense if you do not recognize the debt as your own. If you are certain the debt is not yours, there are further steps you can take to get this off of your credit record.
If your security clearance is related to active duty military there are other ways to approach a collection account.
Calling a debt collector to settle a debt.
If you know the debt is yours, call up Northland Group and negotiate a pay off or payments. If you are going to offer a lump sum settlement, what amount are you prepared to pay? Can you come up with 40 to 50% of the current balance? That is a fair target if this a purchased debt. When calling, do not tip your hand that you are doing this for security clearance or to have the account show as resolved on your credit report. When a debt collector or collection agency knows you are reaching out to them because you need something, they get pretty sticky with wanting full payment. Just stick to explaining the hardship that led to nonpayment in the first place. That you only have xxxx.xx amount to offer if it will settle the matter completely.
If settling with a debt collector for less than the balance owed, you will want to get everything documented. Especially when that document can help push through your security clearance. Here is a breif report on what to look for in a settlement agreement: https://consumerrecoverynetwork.com/debt-settlement-letters-agreements
If you cannot afford a lump sum payment, some form of monthly payment agreement can be arranged and documented to show you are making efforts to, and in fact are, paying the debt. That does not always satisfy security clearance requirements. Sometimes working with a credit counseling agency in a more formal repayment plan can help.
Most of the files I have worked over the years that involved security clearances, or annual employee reviews for series 5 and 7 licenses, benefit more from settling debts than by making payment arrangements when accounts are already out for collection and no longer with the original creditor.
If you (or any other reader), have additional questions about resolving debt for security or employment reasons, with Northland Group, or any collector, post them in the comment section below for feedback.