Settling Credit Card Accounts with a Collection Agency After Charge Off
Credit card accounts have not been paid for a while and now collection companies are calling. I settled one late bill with my bank and I am now tapped out. Can I settle with collectors after charge off?
How to deal with a debt collector after accounts charge off?
—Pay collections
Short answer
Yes. Settling a credit card debt after charge off, once a collection agency is contacting you, is always an option. Sending the account to a collection agency is the most common thing a creditor does with a newly charged off balance, and that agency can negotiate within the limits your original creditor sets.
Key points on this page
- Charge off comes after the first stage of collection calls from your original creditor, which can last six months.
- Creditors have 3 options when they charge off a defaulted account. Placing it with a collection agency is the most popular one.
- Most of this work is done on contingency, so the agency only gets paid if you pay. Your account may sit with one agency for a limited window.
- The agency can only agree to what your original creditor allows, or to what it can go back and get approved.
- You cannot re-age a charged off account. The credit reporting damage was done by your bank, and the collector has no control over it, whatever they suggest on the phone.
- You will have to pick up the telephone to learn your real options. A debt validation request at this stage is often counterproductive to a settlement goal.
Yes, settling a credit card debt after it has been charged off and a debt collection agency is contacting you for payment is always an option. Below is an edited version of an article we published that explains “Charge Off” and what typically happens with your unpaid accounts after they are considered seriously delinquent and the unpaid balance is assigned to an outside debt collector. Settling the debt may be just the opportunity you need to move on with your finances and restore your credit.
For your unpaid credit card to reach charge off, you will have already been through many collection calls from your original creditor. The first stage of collection calls can last six months.
Creditors have 3 options available when they charge off defaulted credit card debt. The most popular option with newly charged off accounts is to send the debt to a collection agency.
Credit Card Debt Sent to Collection Agencies are Mostly Done on Contingency
The amount of time your account remains with an assignee debt collection agency will vary. Let’s assume that the agency that has your unpaid credit card bill will only have the ability to collect from you for 90 days.
The typical debt collector working for your creditor has two ways they attempt to get you to pay; your phone and your mailbox. There are other ways to collect, such as:
- Collection calls to your job,
- Debt collector calls to family members and friends (this does happen – it sucks and is embarrassing).
Lets focus on the most general efforts used by the debt collector who is collecting on your account just after charge off. When a debt collector gets assigned your account, you will often start getting collection calls (at a high volume). You should also get a collection notice in the mail within a week of the agency having contacted you by phone.
You do not have to pick up the collection calls if you are not ready to negotiate a settlement with the agency. My suggestions for speaking to a third party debt collector are not the same as picking up, or making calls out, to your original credit card lender. And you do not necessarily need to send a debt validation request in response to the collection notices you receive in the mail. That is often counter productive to your settlement goals.
Settling an Account with a Collection Agency
Some important details to consider:
- You will have to pick up the telephone in order to learn about your options with the account. I typically recommend that you not limit yourself to written communications with collection agencies.
- You will be speaking to someone who has been trained to push your buttons using the most effective and proven methods for collecting unpaid debt.
- The agency can only work out arrangements for payments that your original creditor allows them to, or where the debt collector can go back to your creditor and get approval.
- You will not be able to re-age the account when settling charged off accounts with debt collectors (the credit report damage is done by your credit card bank, the debt collector will have no control over that).
- Avoid some of the nut job advice on the internet about handling this stage of collection.
- In some ways, you have more payment term options you can negotiate with a collection agency than you would be able to with your bank.
- The collection agency only gets paid if they can get you to pay them (that may not always be the case, but contingency debt collection is the most common model currently).
Charged Off Debt Get Reported to the Credit Reporting Agencies
When this derogatory credit reporting happens the damage to your credit is done. You do not get to re-age charged off accounts. The credit damage from not paying a charge off account can then only get worse if you are sued, followed by getting a judgment against you. The judgment then shows up in the public record section of your credit report. Also, another debt collection trade line may later show up on your credit reports, and this would be considered additional damage.
A debt collector may comment how you should be concerned with your credit report and credit score after the account they are collecting on gets charged off, but this is just a collection tactic. Collection agencies will have no ability to change how the original credit card issuer reports to Equifax, TransUnion or Experian that your account was charged off.
There are tactics and timing I share on this site, and when you want to work with me one on one, that will better prepare you for dealing with outside debt collectors. You can optimize your results by knowing:
- How to negotiate a settlement deal that is timed with internal goals the collection agency has, and even that an individual debt collector may have.
- When to pass on an offer to settle that is too high without being concerned your particular debt collection agency will sue.
- What your bank will allow the collector to do (how low a settlement can get and what payment terms are common).
- The tricks and tactics that will be used to get you to pay more than you may have needed to.
- Collection abuse tactics.
If you are struggling with several credit card debts that are past the charge off stage, you should learn about your options and identify resources for handling the accounts before they end up in more advanced stages of collection which can include being sued.
It is important that your next step to deal with your now charged off debt be the step you take to put the debt to rest before the situation can deteriorate further. If you are serious about resolving unpaid debts and want to develop a workable plan, getting started is easy. Just post more about your situation in the comments below, and lets go from there.
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About Michael BoveeMichael started CRN in 2004 with a mission to provide people in need with detailed debt and credit help and education. Michael has participated as an expert panelist in federal consumer protection rule making, collaborated on state law changes governing debt consolidation, has worked as an expert witness in court matters related to the debt relief industry. He is available to speak with you about your financial struggle and helps people resolve their debt problems daily.
Hi Michael,
I have found this site and this thread in particular very helpful with learning how to settle a charged off account.
My wife and I are in the process of getting pre-approved for the purchase of our first house. When we first started dating I was hitting rock bottom with my credit and finances and had numerous accounts past due and heading to collections. I was able to settle a few and regain control over the rest except for two. One was the remaining balance on an eye surgery (which is now paid) and the other was a Best Buy account. We only need to settle this account to get pre-approved.
The charge-off amount for the BB account was approx $2600 or so in August of 2011. It has since ballooned to around $3350 with interest being tacked on by the debt collector. I believe it has been through two collectors thus far, Asset Recovery Solutions and is now with The Bureaus Incorporated.
I sent them a settlement letter for around $670 (around 20% of the higher total) and got nowhere in negotiations. After doing more research I realize that this amount would not cut it given the age and amount of the account. I am planning on trying to offer them around 40% which would be around $1300 and is close to 50% of the actual charged off amount.
Is it feasible to think this may get us moving towards a settlement? Should I start lower?
Thanks in advance.
Sincerely
Josh
If it were me I would start at about 1k, but would be financially prepared for the 13 to 14 hundred, as that is more realistic.
One thing that could cause Bureaus Inc to hold out for more would be that your credit reports could now reflect someone who has bounced back financially (your other collection agency settlements being updated to show paid and zero balance owed).
Why are you sending the collection agency written settlement offers, as opposed to negotiating the initial details over the phone?
Hi Michael,
Thanks for the response.
In hindsight I’m unsure why I attempted to settle initially via a written letter. I was under the impression that written correspondence might be more effective, this proved to be false.
I have talked to them twice since sending the letter and the first time I ended the conversation frustrated having gotten nowhere. The second time which was tonight proved to be equally as frustrating. I offered $1100 citing that my situation had changed but she essentially scoffed at this. They will not budge from a settlement lower than 90% of the inflated amount. They don’t even try to negotiate, they just want to get off the phone it seems.
In that second conversation I asked if they had purchased the debt or if it was assigned. She indicated they don’t purchase debt. The original creditor does NOT show a zero balance for the original account, which from what I’ve read indicates they are still in possession of the debt? Is that possible?
I’m really at a loss and am frustrated that I don’t seem to be getting anywhere with The Bureaus.
I really appreciate the response and I look forward to anymore advice you can offer.
Thanks again
Josh
It is completely possible. Not all debts get sold. Some creditors, like American Express, have never sold debt (maybe one small portfolio a decade ago); others like Discover Card have an on/off history of selling charged off accounts; while big sellers of debt like BofA and others, do not sell all debt, but retains some for collection through contingency collectors, which is what you have here.
Can you tell approximately how long it is Bureaus Inc has been calling or sending collection notices? If time is not pressing you to get this done, I would try the end of month, or end of assignment negotiation strategies I talk about in this video.
Thanks again for the response, I meant to answer you yesterday but got tied up at work.
I probably first started getting contacted by The Bureaus in late 2011. They have contacted me under the name Asset Recovery Solutions as well. Time is a factor but I was discussing this with my wife last night and we are willing to wait until the end of the month if it means this will be easier to settle.
I also just watched your video and I did get a better understanding of how assignment accounts work.
It says that the account with the bureaus has been opened since September of 2011. I am obviously way past the normal time windows so I don’t really know how to proceed in negotiations. I don’t even know why they still have the account assigned to them.
Would it be worth trying to talk to HSBC directly? (Would they even talk to me?) I was thinking of offering the original charge off amount in return for getting the account deleted. Is it worth a try or would that be a waste of time?
Thanks again.
Sincerely
Josh
HSBC will likely not dishonor any collection contract they have with the debt collector. And you probably have a zero percent chance of HSBC agreeing to remove their reporting. On top of zero probability, raising credit reporting requests and concerns in negotiation with anyone collecting tends to telegraph a need/want on your part. This could lead to their holding out for more money to settle, or holding out in general.
I am not sure why Bureaus Inc would have an account placed with them for that amount of time. Perhaps the “been opened since” is incorrect, or mirroring creditor reporting, or their keeping the account is legitimate (but an oddity).
Once again, thanks for the response.
I can confirm that it has only been The Bureaus and sometimes contact from Asset Recovery reaching out to me since September 2011. I just received another letter from them requesting the inflated amount with a copy of the last Best Buy invoice before it was charged off.
What would you advise me to do at this point? We have the money to settle but I want to get it as low as possible since I don’t see a way to improve my credit score by handing over more money. I’m guessing I look very collectible at this point and they are attempting to get even more than the original charge off amount. Would offering something like $2000 be too high of a starting point? How do I attempt to offer that after having just offered $1100 last week? I don’t want to keep going up to meet them, I feel like I need to find that “magic number” in my next attempt to at least get them talking settlement.
Thank you for all of your insight and help so far.
Sincerely
Josh
I would start back at this with an offer of 35 percent of today’s balance, and be prepared for a counter offer that you can relay how impossible it would be to accept, but will see what you can do. Wait a day or three, call back and offer something in the middle of where you were, and where they countered. Then stick to your amount for a while (if there is nothing overly time sensitive that you have going).
I thank you for all of your responses so far.
It’s unfortunate for me that none of these tactics appear to be working at all.
I followed your guidelines and I just offered $1900 (slightly less than right in the middle of my original and their settlement) and they just won’t budge from the $3015 amount. I just don’t understand why they won’t even try to close this debt out. Apparently time is on their side and settling my particular account is not a high priority.
Is there anything I am missing?
Sincerely
Josh
It could be as simple as they see credit report activity suggesting you are more collectable, like perhaps the applications or credit pulls from know mortgage lenders. That will cause debt collectors to get really sticky with how low they will go in a settlement, and in some instances, whether they will settle at all.
You may just have to wait them out to get to the savings you need. They do have time on their side when you have a goal in mind.
Hi Michael,
I’m on my Early stage of preparation to hopefully buy a house late this year or early spring 2015. Upon checking my credit score, the hard truth of having my salary cut in half almost 2 years ago and plain neglect on contacting my creditors to settle for a lower monthly payment, I just let go on paying them. They are mostly now transferred to a collection agency. I was able to negotiate my kohls and Wal-Mart balances today with a letter of confirmation of my settlement payment of 40%. I still have Macy’s and Amex to settle.
I want to know what and when will it appear on my credit report that I have settled and has a zero balance? And if it doesn’t appear paid in full when I pull up my account in November, what do I need to do to reflect it on my credit report.
Thank you in advance for taking your time to read and hopefully answer my question.
Jennete
Give it a months time after your payments to debt collectors for the settlements have cleared. Check your credit reports to see that each is reflecting a zero balance owed. Post an update if that did not occur, and lets go from there.
If you have not read over the details of getting settlement letters for the debt collectors, or recordings of the verbal agreements etc., read through this article and the comments section too: https://consumerrecoverynetwork.com/debt-settlement-letters-agreements/
Thank you so much for your quick reply. I didn’t make my payments until I received the letter of confirmation that my balance is paid in full with the settlement amount. I also strategically called at the end of the month to renegotiate and stuck with my plan to keep telling them I didn’t want monthly payment because my budget doesn’t allow me. It works!
Thank you again for your quick reply.
I have 3 collections that I need to take card of asap 2 are with Mechants credit I’m guessing some medical bills one for 464.00 and one for 75.00. I also have 1028 with national account services from a Wachovia bank. I am set to close on a house in early july and every penny is tight what is realistic to settle these debts for
Settling smaller balances in collection is not often done with the best savings. See this report: https://consumerrecoverynetwork.com/credit-card-debt-to-include-in-settlement-plan/
You may be able to settle the larger ones for 50% or less, but anything less than a couple hundred it is realistic to prepare to pay the full amount.
Do not mention that you have credit goals, or any goals. Just that you are finally back to work or something, and want to repair the past.
How old are the debts?
awesome posts… thank you for all these useful info.
Problem:
Upaid credit card went from chase to united recovery… chase offered settlement of 3500$ to 8K debt…(delayed it too long and they gave it to united recovery)
Question: how do I proceed with collections to get similar settlement I’d be happy to settle the debt for way lower.
Thank you
You should not have much trouble calling United Recovery and getting them to agree to settle for the same amount Chase offered before. You could perhaps even negotiate a lower payoff (500 to 800).
Are you ready to pay URS the amount they are willing to accept as payment in full in a single lump sum?
Yes I am, but would rather split into 2 payments of $1500 or so, any words of advise as I speak to them ?
My previous experience: they say say pay in full or we will wage garnish, I am not sure how to negotiate …
Thank you again
tom – You would probably benefit from some one on one coaching CRN has always been known for. Call 800-99-8357 for a consult about how you can work with a pro to get this settlement with United Recovery done well.
Hi Michael,
I called in but I couldn’t detail my credit issues enough to get more help. My husband passed away in March. I was unable to work for a couple of years due to caregiving for him. We have approx. 30,000 in debt between Discover, Citibank, and Chase. A couple of the cards were in my husbands name only with me as authorized user. I am left with no money, no job, but I own our condo outright. Discover closed his account and the balance is 6,000. They turned it over to DCM collections and they have called and sent a letter. I told them I have no ability to pay at this time. They said they will check back in 30 days. I am current with monthly payments on the others but probably not for long.
I am very worried about them suing and liens against my home. I am looking for a job and hope to find one soon, but that could be a wait. How long do think it may take before they sue? Any guidance you can offer would be appreciated…I am very overwhelmed.
Sorry for you loss DB. Before I respond with more detailed feedback, it would help to know the following:
Which accounts were just in your husbands name (with you as authorized user)?
What state do you live in?
Thank you for your reply and sympathy…
In husband’s name -Discover 6,000, Chase 3,000 We live in Illinois
I have still been paying on his Chase because they have not contacted me about his passing yet.
I did a free consult with a bankruptcy attorney he said Chapter 7 would not be for me. If needed I could do 13 when I have steady income. Maybe I will consider credit counseling for the others in the future.
( I was having trouble with the reply button- please edit or move as needed..thank you)
It sounds like the attorney you spoke with pointed out the condo you own outright would prevent the chapter 7 route.
Of the 3 creditors you listed, Discover is the most likely to sue. You could settle with them at this stage of collections for maybe 40% of the balance (through the collection agency Discover placed the account with). What possibilities are there for you to pull that amount together?
Are you using the other accounts? Can you afford between 550 and 620 a month for the payments on all accounts?
Posting for DB the response I received via email:
“You are correct, that is exactly what the attorney said. Unfortunately we exhausted our savings, so I don’t have funds for a settlement, although I would like that option. I am afraid I am going to have to wait for employment to commit to any payment plans. Is that what a payment for a credit counseling plan may look like? I feel like my back is against the wall and I do not know what the next step will be.
Thank you so much for your help.”
DB – That is what a payment plan working with a credit counseling agency could look like. The fixed lower monthly payment plans will range between 1.7 and 2.5 percent of your combined balances accepted into the plan. Your situation/hardship is one that would likely have a shot at qualifying for the lowest rate. Have you called an agency to get a quote yet?
I purchased furniture from the room store several years ago but had opened a card to fiance it. I canceled the card but have been getting billed the high interest rates the bill is now over double what I owed initially for the furniture. The roomstore has since gone out of business. I am now getting calls an letters from John C Bonewicz attorney at law. What are my options and will it be easy to give them a target and try and settle at that? I need to get rid of this! Please let me know what are some of the best options
Settling a debt like this is one of your better options. How much is the collection company saying is owed today? What amount of money can you pool together in a single lump sum in order to set a target for settling the debt?
Have you determined whether you can still legitimately be sued by a debt collector? When did you last make a payment on this account? What state are you in?
Hi , i just received a Letter from ARA Collections stating that i owe almost $3,ooo for a credit card that was issued to my name back in 2000, the gentlemen i spoke to told me its not on my Credit report because the Statute of limitations has exceeded and that it will be re-applied to the credit bureaus, im recently trying to buy a Home and this is the last thing i need right now, any feedback on the road i should take would be much appreciated , the Original debt was $1000 and now its $2,894.74….. please help
Frank – Having that collection account reappear on your credit report is the last thing you need right now. The debt collector that threatened that would happen (I assume if you did not pay), is probably full of it. I do not think you have anything to be concerned with. If something does come up, post an update and lets go from there.
Hi. I don’t know where to go to get help but I had opened an account with Maurice’s (Comenity Bank) in August of 2012 and paid the first three months, after a while I just stopped paying, stopped shopping and had a balance of less than 200.oo. Here I am two years later still trying to get ahold of somebody so I can start paying it off. I can’t get through to anyone but I’m pretty sure the account is in delinquency. What do I do? How bad do you think my situation is?
BL – If you only have this one account in collections, you are not in all that bad of shape. The balance is going to have ballooned from late fees and probably default interest.
Have you tried the banks customer service for help locating your account, or at least the last know debt collector for the debt if they sold it off to one?
Is there a debt collection agency showing on your credit reports as a trade line, or as an inquiry?
I am working on buying a home and hired a credit repair person. I have a BofA account that the last payment was made in 4/2009 and then I quit paying on it. It is showing a past due amount of $217 with a balance of $7000. After disputing the charges Transunion and Experian took it off my report but equifax has not. I am hoping Equifax does take it off, but if not should I settle the account and if so how much in a lump sum payment could I settle for? It is showing as charged off. I also have a wells fargo account that is showing a past due of $2100 that was sold to a collection agency. All three bureaus have taken the collection company off my credit reports, but Equifax is the only bureau still showing the account as past due. If this account was already sold to a collection agency but that agency has been removed from my credit reports do I still settle with Wells? And if so for how much? Why is it that two bureaus removed all of these accounts but not Equifax? Thanks in advance for any guidance you can provide.
JB – A general target for settling BofA and Wells Fargo credit card debts with debt collectors this far along is roughly 40%. If you can tell me which agency is collecting now, I may be able to better target settlement amounts using current trends. Also, what state are you in?
As far as the credit reporting disputes, there are a few possibilities for why you see what you do. Did you send disputes only to the bureaus, or the them and the furnishers (debt collection companies)?
Hi,
I have a medical bill that just went to collections with Focus Fin. Services for $1500. The creditor called me yesterday and said I have to pay it off in full by the end of the month. I can’t afford that. I asked if I can make payments and they said they can take a payment but I still have to have it paid off by the end of the month. what do I do?
You can only do what you can afford to do. DO NOT succumb to the typical debt collector pressure tactics.
How much money can you pool together immediately?
How much can you confidently budget for monthly (you know for sure you have that much you can pay every month without fail)?
Hi,
I am trying to clean up my credit. I didn’t do research before hand and may have messed up. I had dish network that went into collections with Afni. My debt is 313.00. They offered a settlement of 3 pmts of 74.00. I made one payment but didn’t realize i should have negotiated to have it removed. Is there anything I can do now? I have more debt to clean up but have not tried to negotiate anything yet.
I would not get hung up on it Carrie. The account being updated as paid, or zero balance owed after the settlement payments are complete, is going to work in your favor. Maybe not as much as a deletion, which is unlikely to happen anyway, but necessary.
How many collection accounts do you have on your credit reports right now? How old are the debts?
I am curious if the New York State 5 year purge rule would apply for my husband. We have an unpaid collection account with First Premier Credit Card. We were first delinquent in 8/2010. For some inexplicable reason they did not charge it off until January 2014. They also reported 90 days late. This dropped our score by 35 points. It was originally only 300, but it is now showing 550. They are willing to settle it for 350. They are not willing to delete it. However, I read that charged off accounts are purged in New York State after 5 years if they are paid. I am confused however if it is 5 years after the account was charged off, or 5 years from first delinquency?
Based on what you shared, it would appear that the 5 year credit reporting on paid collection accounts for New York residents would apply. Are there late pays showing up in 2010 and beyond?
Michael, I have a very strange situation with my AMEX Platinum Account. Back in 2012, I asked to be placed on their hardship program, which lowered the interest rate to zero for 6 months and then a different rate for 6 more, with the understanding if I paid off the balance the card would get reinstated. This was by automatic draft each month of approx. $1000. At the end of 12 months the automatic drafts stopped, and I received no statements from AMEX. I still could not pay the full balance remaining of $26k and AMEX set up a minimum payment of $250 monthly. The last payment I made was in December of 2013 over the phone. I called to make the January payment over the phone and was told the account had been transferred to Nationwide Credit and to call them. It was after hours and no answer – and no letters from AMEX or NCI. Now, NCI is calling me to work out a payment plan saying that AMEX cannot report payment, or non-payment to credit bureaus due to the age of the debt. I subscribe to Experian and pulled all three reports and AMEX is noted as closed with -0- balance, paid as agreed on two bureaus, and the others says no reporting. All three of my scores are in the 720-735 range. NCI says if I pay the balance in full over time that AMEX will reinstate the card, or they are offering a reduced settlement, that if worked out, I will have to pay income tax on the discounted balance. My question – what should I do? There is nothing negative on my credit report at all. Can NCI or AMEX move forward and get a judgement, and if I am able to work out a settlement, either one sum or over time, will that payment trigger something on credit reporting? HELP!!
Trey – The credit reporting that is happening now does not sound accurate. Whether you decide to save money and settle the AMEX account with the Nationwide Credit, pay in full over time, or do nothing, I think it likely the credit report will get updated. My focus, were I in your shoes, would be to weigh the dollar benefit with my credit goals over the next 12 to 24 months. What financing goals do you have in the near term?
I have a credit debt that was sent into collections over 7 years ago. However the collection agency informed me that everytime the account is transferred to a new collection agency the Statues of Limitations restarts. Is there anyway besides paying the debt that I can fix this?
Jasmine – What is the name of the debt collection agency and specific collector working there that told you this? It is not true. Reselling a debt does not reset the clock.
NTL RECOVERY AGENCY
2491 PAXTON STREET
HARRISBURG, PA 17111
Phone#: 8007734503
Account Number
There is no specific collector both times I called I got a diffeerent represenative. How can I fix this? i would like to clear up my credit by the end of the year.
So National Recovery is showing up on your credit report? Who was the original creditor, and when was the last payment made on this account? The reporting time line can go 7.5 years.
Are there other accounts that are negative on your credit reports?
What state are you in?
Do you have the day and approximate time the call took place where you were told every time the debt moves somewhere else the SOL starts over?
Yes National Recovery is Showinrb up on all of my credit reports.
The original creditor was Chase Bank it is for a credit card. The account was open in 2006 closed in 2006 and was reopened in 2009 due to a payment that was received.
I am currently deployed but I am station in Georgia but the credit was established in Wisconsin. If I am correct I believe the Statues of Limitations are 6 years.
Yes I have 8 negative accounts using on my Tranunion credit report but 6 of the 8are paid and closed. The other one I am literally paying tomorrow and then there is this one.
I called today prior to posting this question.
Jasmine – The payment made in 2009 may have reaged the SOL for the purposes of filing a legitimate collection lawsuit (NOT the fact that an account moves from one debt collector to another). But that is a state law concern you can raise with an experienced consumer law attorney – the type you would find here.
The account originally went negative in 2006, and I suppose if that was October or later, their could be a few weeks to a couple months left for when National Recovery will be removed from your credit reports. But my impression is that they are telling you whatever they want (even if its not true), so perhaps they just do whatever they want too. Can you verify when your credit reports say that the entry from National will age off? Would you be willing to pursue a complaint against them, consult with a consumer attorney about any FDCPA violations, etc? Are you just looking to resolve this account and move on?
Yes one of my reports state that it is expected to be removed from my credit 09/2015. Which would be correct but I was curious because National Recovery stated it starts over from the day they received the account.
I am more than willing to pursue a complaint against them, it’s not fair that they blatantly lie.
Quick Question: Is there any way to remove closed negative accounts off your credit report?
Jasmine – Removing negatives regarding closed credit cards, or collection agency entries, that are showing accurate, complete, and current info, is not all that likely. Some would suggest repeated disputes with the credit bureaus, but that is not all that effective. Can you identify any problems with the credit reporting entries from the debt collectors?
Post the name of a nearby larger city and I will email you contact info to an experienced consumer law attorney you can consult with.
I just want a clean credit report. I have paid off all of the negative and collection entries with the exception of National Recovery. My ultimate goal is to achieve a higher credit score.
Jasmine – You will achieve a higher credit score incrementally. Do you have good trade lines established too? Check out the credit report card at credit.com for great tips and tools to improve your credit profile.
Hi Michael,
I tried to read some of the above postings to see if I could get some advise without having to bother you with another question….
Well I applied and received a credit card with NY & Company back around July/August of 2013…. I had a limit of $200 which I used in probably the first 2 months. I had attempted to make a payment, but for some reason they declined my check. Since then I had lost my job and didn’t hear from them up until about 6 months ago. They constantly call, but I have not answered because I simply do not have the funds to pay. Now my once $200 credit card bill is now almost trippled.. I received a call today and the lady with Comenity said for me to contact her before the end of the day, with my attorney’s information. I fear being sued and this going to court, but I have no other option because I do not have any money comming in currently. I know this is my fault. But you do you think that they are mentioning lawyers just to scare me? I do not know what to do.
Ashley – It is not all that unusual for collection accounts with this small a balance to wind up in court. That said, I would not expect that to happen here, at least not yet. So, I do think the reference to wanting to contact “your” attorney is more a collection ploy at this stage. What state do you live in?
Hi Michael,
Thank you for what you’re doing, this has been very helpful. Can you help me out?
I incured $3000 to car insurance company for property damage ( It’s her car and I am 22 yrs. old in Texas, i was uninsured but my mom thought I did) .
I was afraid and was offered $2000 settlement,signed in writing faxed to me, by assigned collection agency. But I changed mine and offered $1200 faxed to this case worker. She called and said it is not acceptable. My questions are:
1. Is it my advantage to send for validate letter, however, i know i do woe this debt ?
2. I heard that I can offer $500 and settle for $750. Is this realistic target?
3. When she calls me these days,better talk or ignore calls for a while?
4. since debt is only 3 months. old, should I ignore calls and wait a month and offer her $500?
5. Mychanging minds to offer lower every time work againest me ?
6. How to ask what is creditor’s acceptance limit?
Thanks again.
Susan
1. A validation letter is not all that useful here in my opinion.
2. Not sure where you heard that, but while negotiating a debt is very real and happens every day, offers that low getting approved are not that common.
3. I cannot comment on whether to take the calls without knowing more.
4. I would need to know more to qualify my feedback, but waiting a month to make another offer is strategically sound in many settlement strategies. That said, it is also a way to pass up a workable deal and have the account passed off to more aggressive collectors, or for it to land in court with the current creditor/collector.
5. Changing your mind to offer lower will indeed work against you in many negotiations. I do not know if that is the case here, but suspect it might be.
6. Who is the creditor?
Hi Michael,
I am working very hard on cleaning up my credit as I have a baby on the way and would like to provide a stable home for him/her. My credit is an absolute mess since I have neglected it for many years (due to a combination of irresponsibility and financial hardship). I have a number of accounts in collections most are school loans and medical bills listed on my credit report so I must thank you in advance for taking the time to look through this. I’ve since applied with the US Dept of Education to consolidate my loans in which my application is still being processed.
AES/SUNTRUST
Account type: Installment
Balance: $7374
Status: Past due
Action taken: Sent a goodwill letter to AES asking them to remove or change the status of the loan.
AES/SUNTRUST
Account type: Installment
Balance: $7158
Status: Past due
Action taken: Sent a goodwill letter to AES asking them to remove or change the status of the loan.
AES/SUNTRUST
Account type: Installment
Balance: $6881
Status: Past due
Action taken: Sent a goodwill letter to AES asking them to remove or change the status of the loan.
CENTRAL FINANCIAL CONTROL
Account type: Collection – Medical
Balance: $673
Status: Closed- placed for collection
Action taken: The collection agency has closed down due to a number of lawsuits and has been transferred to another agency. I filed a dispute with all 3 credit bureaus to remove this from my account.
CENTRAL FINANCIAL CONTROL
Account type: Collection – Medical
Balance: $1172
Status: Closed- placed for collection
Action taken: The collection agency has closed down due to a number of lawsuits and has been transferred to another agency. I filed a dispute with all 3 credit bureaus to remove this from my account.
CMRE
Account type: Collection – Medical
Balance: $3311
Status: open
Action taken: I’m working with them to pay off the balance. The balance listed is the total but on my credit reports there are 10 separate accounts for various amounts. I am paying the smaller accounts ($50-60) first and I have yet to discuss a payment plan or settled amount after these have smaller bills have been paid. No agreement has been made as to weather they will be deleting this off my report or not.
DEPT OF ED/SALLIE MAE
Account type: Installment
Balance: $1219
Status: transferred
Action taken: Consolidated but was wondering if this can be removed from my account with a GW letter?
FINANCIAL DEBT RECOVERY
Account type: Collection – Medical
Balance: $454
Status: Placed for collection
Action taken: I have no idea what this is? I tried to call the number listed on the credit report but it is disconnected so I sent a letter asking them for verification of the debt and have yet to receive a response.
SEQUOIA FINANCIAL SERVICES
Account type: Collection
Balance: $362
Status: Placed for collection
Action taken: I was unaware of this debt until I called and found out that it is from an old gym membership which said that I did not properly cancel my membership and had to pay a balance of $270 which has turned into $362 from interest. I have never received a letter or bill from them. The gym has since been sold to another gym and no longer exists. I asked the collection agency over the phone to send me a verification of the debt and have not heard from them. I also sent a letter asking them to verify the debt but have yet to receive a response.
WEST ASSET MANAGEMENT
Account type: Collection – Medical
Balance: $5667
Status: Placed for collection
Action taken: I recently agreed to an income-based payment plan that consists of $269 for my first payment and $100 thereafter. My account will be re-assessed in 6 months in which I can either negotiate a settlement or continue with a payment plan. I have not received any agreement terms of weather this will being my account to current standing or not.
ACS/CA B&T
Account type: School loan
Balance: $6936
Status: transferred
Action taken: This is another school loan collection agency and has since been transferred. I called and asked if they can change the status of my account but they denied my request. Do you think sending a goodwill will help?
Thanks again for taking the time to take a look at my scenario. I really hope to get on track in the next few years.
Jenni – Because your stated goal is to improve your credit reports, it would help me to know how long it has been since all of these accounts were last paid. Also, settling the collections and getting the credit reporting to show a resolved account, and zero balance owed, can be done one at a time, or with a rapid fire approach. Assume all of your non student loan debts can be negotiated for 50% of the balance owed today. Over what period of time would it take to come up with that money? The answer here is also going to impact my feedback.
Hi Michael,
Thank you for your response. I honestly have not started making payments on any of the medical bills until this month. These medical collections cases were opened anywhere between 2008-2013. I paid off a few of the small ones and I will start paying for the larger ones in considerable monthly payments. If I were to come up with the money with a negotiated 50% of the balance owed on those bills, I would be able to come up with the money in the next 10 months.
Jenni – Before you make any more headway I would urge you to call in for a consult with a settlement specialist. Jumping at payment options today could be setting you up to pay more, or be unable to maximize savings later. Call 800 939-8357 when you have some time to talk all of this over.
Hi Michael,
I am finally in a position to tackle my debt but would like to achieve saving some money on the interest that has accrued over a couple of years. I’m not exactly sure how to go about this process as there seems to be a couple of options out there. Below is a list of debt I have on my credit report and their current standing. Please let me know tactic you think is best:
[EDITED FOR DUPLICATION]
I also have a few tax liens on my report one of which state as being “released.” Do you know if this can be removed from my report and if so how?
William – I can offer some solid feedback about settling for the best savings on those accounts you listed. It would really help if I knew how long it has been since you last paid on them, and also who it is you last heard from about collecting (debt collection agency, or debt buyer name). The age of a debt, and who is collecting, can often impact the savings and options.
The tax liens are state or federal?
Michael ,
Please see updated info below:
CAPITAL ONE
Condition: Derogatory
Current Balance: $1408
Original Balance: $1000
Status: Collection/Charge-off as bad debt
Last payment: 09/19/2012
Collector: unknown- I have not received a letter from a collector for this debt. It may be because I moved within the last year or so.
CITI
Condition: Derogatory
Current Balance: $9585
Original Balance: $6000
Status: Collection/Charge-off as bad debt
Last payment:10/12/2012
Collector: United Collection Bureau- offering a settlement of $4026 in full which I cannot afford. Do these types of collectors offer reduced settlements with payment options?
DISCOVER
Condition: Derogatory
Current Balance: $2278
Original Balance: $5789
Status: Collection/Charge-off as bad debt
Last payment: 02/01/2013
Collector: CIR, Law Offices- settlement offer of $1252 paid in full which I cannot afford.
CAPITAL ONE
Condition: Derogatory
Current Balance: $2393
Original Balance: $2000
Status: Collection/Charge-off as bad debt
Last payment: 09/18/2012
Collector: Portfolio Recovery Associates offering 3 payment options: to settle for $1650 paid in full (savings of $707), 6 month payment plan @ $295/mo (savings of $589) OR 12 month payment plan @ $157 (savings of $471)
TAX LIENS
Type: State tax
Date filed: 03/03/2008
For tax year: 2006
Status: weekly wage garnishment of $60 with a total of $240/mo. being paid every month + state tax refund garnishment since 2011. This should have been released by now but status on CR still says FILED.
Type: tax lien (as stated on my CR)
Date filed: 01/22/2009
Date released: 04/23/2010
For tax year: 2006-07
Status: weekly wage garnishment of $60 with $240/mo. being paid every month + state tax refund garnishment since 2011. CR states that this has been released but is still shows on my CR. Is there a way to remove this?
Type: Federal tax (there are 3 of these filed for various amounts)
Date filed: 03/04/2010
For tax year: 2009
Status: trying to work out a payment plan + federal tax return garnishment since 2011. Trying to find updated record of balance due but have not received anything from the IRS for a while.
Thanks William. I am going to edit the prior post as it is duplicate.
I would target the Capital One settlement at 50% of today’s balance. If not settling for a lower balance pay off, you may be able to set up affordable monthly payments, but likely with nor reduction of fees and interest.
The Citibank account now with UCB I would counter offer 3k-ish if in a position to settle. If not settling, what does it look like to pay 60% over 12 months?
The Capital One account with PRA represents the flexibility Portfolio Recovery has, but will the 12 month plan work into your budget? You can counter with a lower amount, and perhaps longer terms, but can then expect the savings to diminish too.
I would encourage you to settle the Discover account in a lump sum if at all possible, and would prioritize the credit card debts for settling this one first.
You have referenced the offers made to date as being unaffordable. I am not a huge fan of starting monthly payments for full balances on debts this old, but understand why you would want to do that. What room is there in your monthly budget to tackle the aggregate amounts of the collection debts?
I cannot offer the feedback you will want on the tax debts. But removing them is not all that likely, while having them reflect paid and released is the norm once you have completed them. Did you work with a tax professional at all on these?
I am attempting to settle a number of charge offs. The collection agencies are horrible. Have you delt with Global?
Global who? More background and details will help too. What is the original debt from? When was this last paid? What approach are you taking with debt collectors when you speak with them?
Hello,
I have 2 accounts from the same company that were charged-off last year…I believe it was around October. The accounts went into collections shortly after that. I’m now dealing with 2 separate collection agencies. Neither company calls me. I think I have only heard from them via phone once our twice and only received one letter from each. I owe a little over $1000 on one and a little under $2000 on the other. I’m concerned about these accounts because I have no way of paying them off or settling them because I have been unemployed since September of last year. I had made the last payment to the original creditor in September when I still had funds to spare. So I guess my questions are…what do you recommend? Can an account that shows in my credit report as being charged-off also be shown as in collections? I’m just sort of lost at this point because I know I owe the money but I have no way to pay it and I have no one to help me out nor do I want someone else paying off my debt. Thank you for any help you can provide!
Melissa – You can end up with a charge off on your credit report from your original lender, AND another collection account being reported for the same account too. It is a crappy system really. If you do end up with another collection item showing up, and it is the result of your lender selling the debt off, then the creditor should show a zero balance owed to them from that point forward. That does not always happen correctly, so keep an eye on that.
As far as what to do? Probably nothing. At least that is what I would do if I were in your shoes. Offering a debt collection agency any payment when you cannot afford to is just a waste. I would wait until you have a plan in place to settle with the debt collector, or your income situation improves to the point you can budget a payment. When you are ready to deal with the collections, post an update with the names of the debt collectors you last heard from, or who sent notices in the mail, and lets go from there.